STOCK COMPENSATION PLANS

Refer to Note 9 of the Company’s October 31, 2014 audited financial statements in the Company's 2014 Annual Report on Form 10-K for further information on our employee benefit plans and stock based compensation plans. Total stock based compensation expense during the three and nine months ended July 31, 2015 was $3,095,000 and $13,004,000, respectively, as compared to total stock based compensation expense of $2,820,000 and $9,937,000 for the three and nine months ended July 31, 2014.

During the nine months ended July 31, 2015, participants in the Company’s Management Share Purchase Plan (MSPP) elected to receive a total of 11,869 shares of restricted stock at an average price of $81.49 per share instead of a specified percentage of their cash compensation, and the Company issued 2,881 matching restricted shares. During the three and nine months ended July 31, 2015, the Company recorded compensation cost for the MSPP shares, included in the total stock based compensation expense above, of $57,000 and $245,000, respectively, as compared to $51,000 and $147,000, respectively, during the three and nine months ended July 31, 2014.

On November 1, 2014, the Company entered into performance share agreements that grant certain officers and key employees the right to receive a target number of 54,600 shares of the Company’s common stock, subject to the Company’s achievement of certain performance measures. As of July 31, 2015, the Company could not determine that achievement of the applicable performance based criteria is probable due to the uncertainties discussed below, and therefore recorded no compensation expense related to those shares. The Company also has performance share agreements in place with certain officers and key employees that were entered into on November 1, 2013 and November 1, 2012. Each cycle of performance shares is subject to a two-year performance period and an additional one-year service-based vesting period. During the three months ended January 31, 2015, the Company determined that achievement of the applicable performance based criteria for the November 1, 2013 agreement was probable at a level between the target and maximum levels, and during the three months ended April 30, 2015, the Company determined that achievement of the applicable performance based criteria for that agreement is probable at the maximum level. Accordingly, the three and nine months ended July 31, 2015 include compensation expense of $787,000 and $5,625,000, respectively, included in the total stock based compensation expense above, related to the performance share agreements entered into on November 1, 2013. As of July 31, 2015, the aggregate number of shares estimated to be awarded related to the November 1, 2013 performance share agreements totaled 146,918 shares. The actual number of shares that can be awarded for those agreements could change materially from that estimate due to the Company’s actual performance during the remaining three months of the performance period ending October 31, 2015, and due to potential forfeitures. During the three and nine months ended July 31, 2015, the Company recorded compensation expense of $709,000 and $2,165,000, respectively, included in the total stock based compensation expense above, related to the performance share agreements entered into on November 1, 2012, as compared to $1,070,000 and $5,120,000, respectively, related to that grant during the three and nine months ended July 31, 2014. As of July 31, 2015, the aggregate number of shares estimated to be awarded related to the November 1, 2012 performance share agreement totaled 186,951 shares. Since the performance period for those agreements has ended, the actual number of shares that will be awarded can change only due to potential forfeitures during the remaining three months of the service period ending October 31, 2015. In estimating the compensation expense to record in a period for any outstanding performance share grants, the Company considers, among other factors, current and projected grain costs and chicken volumes and pricing, as well as the amount of the Company’s commitments to procure grain at a fixed price throughout the performance period. Due to the high level of volatility of these commodity prices and the impact that the change in pricing can have on the Company’s results, the Company’s assessment of probability can change from period to period and can result in a significant revision to the amounts accrued related to the arrangements. The accounting for these arrangements requires the Company to accrue over the three-year service period the estimated amounts of the shares that will be earned with changes made during the service period adjusted using the cumulative catch up method. Had the Company determined that it was probable that the maximum amount of those outstanding awards from the fiscal 2015 agreements would be earned, an additional $2.3 million would have been accrued as of July 31, 2015.

The Company's compensation cost related to performance share agreements is summarized as follows (in thousands):



	Three months ended				Nine months ended
Date of Performance Share Agreement	July 31, 2015		July 31, 2014		July 31, 2015		July 31, 2014
November 1, 2011	$	—	$	393	$	—	$	1,134
November 1, 2012	709		1,070		2,165		5,120
November 1, 2013	787		—		5,625		—
November 1, 2014	—		—		—		—
Total compensation cost	$	1,496	$	1,463	$	7,790	$	6,254

On November 1, 2014, the Company granted 54,600 shares of restricted stock to certain officers and key management employees. The restricted stock had a grant date fair value of $84.77 per share and will vest on November 1, 2018. On February 12, 2015, the Company granted an aggregate of 23,000 shares of restricted stock to all of its non-employee directors. The restricted stock had a grant date fair value of $77.97 per share and vests one, two or three years from the date of grant. The Company has unvested restricted stock grants outstanding that were granted during prior fiscal years to its officers, key employees and outside directors. The aggregate number of shares outstanding at July 31, 2015, related to all unvested restricted stock grants totaled 314,300. During the three and nine months ended July 31, 2015, the Company recorded compensation cost, included in the total stock based compensation expense above, of $1,542,000 and $4,969,000, respectively, related to restricted stock grants, as compared to $1,306,000 and $3,536,000, respectively, during the three and nine months ended July 31, 2014. The Company had $9.4 million in unrecognized share-based compensation costs as of July 31, 2015, that will be recognized over a weighted average remaining vesting period of 1.6 years.