Stock-Based Benefit Plans

6 Months Ended

Apr. 30, 2011

Stock-Based Benefit Plans [Abstract]

Stock-Based Benefit Plans

8. Stock-Based Benefit Plans

Stock Options:

The fair value of each option award is estimated on the date of grant using a lattice-based option valuation model that uses assumptions noted in the following table. The lattice-based option valuation model incorporates ranges of assumptions for inputs, which are disclosed in the table below. Expected volatilities were based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other factors. The expected lives of options granted were derived from the historical exercise patterns and anticipated future patterns and represent the period of time that options granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different behaviors. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The weighted-average assumptions and the fair value used for stock option grants in fiscal 2011 and 2010 were as follows:

	2011	2010
Expected volatility	45.38% - 49.46%	46.74% - 51.41%
Weighted-average volatility	47.73%	49.51%
Risk-free interest rate	1.64% - 3.09%	2.15% - 3.47%
Expected life (years)	4.29 - 8.75	4.44 - 8.69
Dividends	none	none
Weighted-average grant date fair value per share of options granted	$7.94	$7.63

Stock compensation expense and related income tax benefits related to stock options recognized for the six-month and three-month periods ended April 30, 2011 and 2010, for the twelve months ended October 31, 2010 and estimated amounts for the twelve months ended October 31, 2011 are as follows (amounts in thousands):

	2011			2010
Six months ended April 30:
Stock-compensation expense recognized	$	5,905		$	6,284
Income tax benefit related to stock option grants		—		$	2,513
Three months ended April 30:
Stock-compensation expense recognized	$	1,317		$	1,375
Income tax benefit related to stock option grants		—		$	561
Twelve months ended October 31:
Stock-compensation expense recognized	$	8,560	(a)	$	9,332
Income tax benefit related to stock option grants		—	(a)	$	3,266

(a) Estimated

Performance Based Restricted Stock Units:

In December 2010 and 2009, the Executive Compensation Committee of the Company’s Board of Directors approved awards of performance-based restricted stock units (“Performance-Based RSUs”) relating to shares of the Company’s common stock. The Performance-Based RSUs will vest and the recipients will be entitled to receive the underlying shares if the average closing price of the Company’s common stock on the New York Stock Exchange (“NYSE”), measured over any 20 consecutive trading days ending on or prior to five years from date of issuance of the Performance-Based RSUs increases 30% or more over the closing price of the Company’s common stock on the NYSE on the date of issuance (“Target Price”); provided the recipients continue to be employed by the Company or serve on the board of directors of the Company (as applicable) as stipulated in the award document. The Company determined the aggregate value of the Performance-Based RSUs using a lattice-based option pricing model.

Information regarding the issuance, valuation assumptions, amortization and unamortized balances of the Company’s Performance-Based RSUs in and at the relevant periods and dates in fiscal 2011 and 2010 is as follows:

	2011			2010
Performance-Based RSUs issued:
Number issued		306,000			200,000
Closing price of the Company’s common stock on date of issuance	$	19.32		$	18.38
Target price	$	25.12		$	23.89
Volatility		48.22	%		49.92	%
Risk-free interest rate		1.99	%		2.43	%
Expected life	3.0 years			3.0 years
Aggregate fair value of Performance-Based RSUs issued (in thousands)	$	4,994		$	3,160
Performance-Based RSU expense recognized (in thousands):
Six months ended April 30,	$	1,735		$	987
Three months ended April 30,	$	983		$	567

	2011		2010
At April 30:
Aggregate outstanding Performance-Based RSUs		706,000		400,000
Cumulative unamortized value of Performance-Based RSUs (in thousands)	$	6,895	$	4,769

Non-Performance Based Restricted Stock Units:

In December 2010 and 2009, the Company issued restricted stock units (“RSUs”) relating to shares of the Company’s common stock to several employees. These RSUs generally vest in annual installments over a four-year period. The value of the RSUs was determined to be equal to the number of shares of the Company’s common stock to be issued pursuant to the RSUs, multiplied by the closing price of the Company’s common stock on the NYSE on the date the RSUs were awarded. Information regarding these RSUs in the six-month and three-month periods ended April 30, 2011 and 2010 is as follows:

	2011		2010
RSUs issued:
Number issued		15,497		19,663
Closing price of the Company’s common stock on date of issuance	$	19.32	$	18.38
Aggregate fair value of RSUs issued (in thousands)	$	299	$	361
RSU expense recognized (in thousands):
Six months ended April 30,	$	66	$	33
Three months ended April 30,	$	39	$	23
At April 30:
Aggregate outstanding RSUs		35,160		19,663
Cumulative unamortized value of RSUs (in thousands)	$	457	$	329