11. Stockholders' Equity

Stock Incentive Plans

On June 3, 2004, we adopted the 2004 Stock Incentive Plan, or the 2004 Incentive Plan, and in October 2011, we adopted an Amended and Restated 2004 Stock Incentive Plan, or the Restated Plan, to update it with respect to certain provisions and changes in the tax code since its original adoption. Under the Restated Plan, the number of shares authorized for issuance is 6,825,000 shares of common stock. After the adoption of the Restated Plan in October 2011, we will no longer grant awards pursuant to the 2004 Incentive Plan; however, it remains in effect for awards outstanding as of the adoption of the Restated Plan. Under the Restated Plan, grants may be made to employees, officers, directors and consultants under a variety of awards based upon underlying equity, including, but not limited to, stock options, restricted common stock, restricted stock units or performance shares. The Restated Plan limits the number of shares that can be awarded to any employee in one year to 1,250,000. The exercise price for incentive options may not be less than the fair market value of our common stock on the date of grant and the exercise period may not exceed ten years. Vesting periods, terms and types of awards are determined by the Board of Directors and/or our Compensation and Stock Option Committee, or Compensation Committee. The Restated Plan includes a provision for the acceleration of vesting of all awards upon a change of control as well as a provision that allows forfeited or unexercised awards that have expired to be available again for future issuance. Since fiscal 2008, we have issued both restricted common stock and restricted common stock units, or RSUs, to our officers, directors and employees pursuant to our various plans. The RSUs represent the right to receive one share of common stock for each unit on the vesting date provided that the employee continues to be employed by us. On the vesting date of the RSUs, we expect to issue the shares of common stock to each participant upon vesting and expect to withhold an equivalent number of shares at fair market value on the vesting date to fulfill tax withholding obligations. Any RSUs withheld or forfeited will be shares available for issuance in accordance with the terms of the Restated Plan.

The shares of common stock issued upon exercise of a previously granted stock option or a grant of restricted common stock or RSUs are considered new issuances from shares reserved for issuance in connection with the adoption of the various plans. We require that the option holder provide a written notice of exercise in accordance with the option agreement and plan to the stock plan administrator and full payment for the shares be made prior to issuance. All issuances are made under the terms and conditions set forth in the applicable plan. As of November 30, 2014, 3,085,935 shares remained available for issuance under the Restated Plan.

For all stock compensation awards that contain graded vesting with time-based service conditions, we have elected to apply a straight-line recognition method to account for all of these awards. For existing grants that were not fully vested at November 30, 2013 and grants made in fiscal 2014, there was a total of $1,284,000 of stock based compensation expense recognized during fiscal 2014.

The following summarizes option grants, restricted common stock and RSUs issued to members of our Board of Directors for the fiscal years 2002 through fiscal 2014 (in actual amounts) for service as a member:

	November 30, 2014
Granted as of:	Number of options		Exercise price
2002		40,000	$	1.00
2002		31,496	$	1.27
2003		30,768	$	1.30
2004		320,000	$	1.58
2005		300,000	$	5.91
2006		450,000	$	1.02

	Number of restricted shares issued
2007		320,000
2008		473,455
2009		371,436
2010		131,828
2011		—
2012		617,449
2013		—
2014		219,678

Stock option activity in the aggregate for the periods indicated are as follows (in actual amounts):

	Options			Weighted average exercise price		Weighted average remaining contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at November 30, 2013		775,000		$	4.03
Granted		—			—
Exercised		—			—
Expired		(225,000	)		1.62
Forfeited		—			—		—		—

Outstanding and exercisable at November, 2014		550,000		$	5.02		0.7	$	—


Weighted average per option fair value of options granted during the year					N/A
Outstanding at November 30, 2012		796,794		$	3.96
Granted		—			—
Exercised		(21,794	)		1.30
Expired		—			—
Forfeited		—			—		—		—

Outstanding and exercisable at November, 2013		775,000		$	4.03		1.4	$	18,000


Weighted average per option fair value of options granted during the year					N/A

	Options			Weighted average exercise price		Weighted average remaining contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at November 30, 2011		868,290		$	3.73
Granted		—			—
Exercised		(20,000	)		1.00
Expired		(51,496	)		1.17
Forfeited		—			—		—		—

Outstanding and exercisable at November, 2012		796,794		$	3.96		2.3	$	—


Weighted average per option fair value of options granted during the year					N/A

The total intrinsic value of options exercised during the fiscal years ended November 30, 2013 and 2012 was $10,948 and $7,600, respectively. There were no options exercised during the year ended November 30, 2014.

Exercise prices for options outstanding and exercisable as of November 30, 2014 are as follows:

		Options Outstanding and Exercisable
Exercise Price		Number of shares		Weighted-Average Remaining Contractual Life
$	1.02		100,000		1.3
$	5.91		450,000		0.5

			550,000		0.7

The following table summarizes stock option activity by plan. There are no stock options outstanding under our Restated Plan.

	Total Number of Shares			2004 Incentive Plan			2000 Director Plan
Outstanding at November 30, 2013		775,000			775,000			—
Granted		—			—			—
Exercised								—
Forfeited / Expired		(225,000	)		(225,000	)		—

Outstanding and exercisable at November 30, 2014		550,000			550,000			—


Outstanding at November 30, 2012		796,794			775,000			21,794
Granted		—			—			—
Exercised		(21,794	)		—			(21,794	)
Forfeited / Expired		—			—			—

Outstanding and exercisable at November 30, 2013		775,000			775,000			—


Outstanding at November 30, 2011		868,290			775,000			93,290
Granted		—			—			—
Exercised		(20,000	)		—			(20,000	)
Forfeited / Expired		(51,496	)		—			(51,496	)

Outstanding and exercisable at November 30, 2012		796,794			775,000			21,794

A summary of the status of restricted common stock and RSUs as of November 30, 2014, and changes during the year, are presented below:

										Weighted-Average Grant-Date Fair Value
	Restricted Shares			Restricted Stock Units			Total Shares			Restricted Shares		Restricted Stock Units
Outstanding at November 30, 2013		954,798			1,661,330			2,616,128		$	0.90	$	0.93
Granted		288,121			362,242			650,363			1.49		1.49
Issued		(450,616	)		(655,384	)		(1,106,000	)		0.95		1.11
Cancelled		—			(312,792	)		(312,792	)		—		0.97
Forfeited		—			(21,545	)		(21,545	)		—		0.72

Outstanding at November 30, 2014		792,303			1,033,851			1,826,154		$	1.08	$	1.00


Outstanding at November 30, 2012		844,236			2,713,605			3,557,841		$	0.85	$	0.87
Granted		420,882			631,059			1,051,941			1.02		1.02
Issued		(310,320	)		(1,140,709	)		(1,451,029	)		0.92		0.89
Cancelled		—			(426,749	)		(426,749	)		—		0.89
Forfeited		—			(115,876	)		(115,876	)		—		0.95

Outstanding at November 30, 2013		954,798			1,661,330			2,616,128		$	0.90	$	0.93


Outstanding at November 30, 2011		464,610			2,542,728			3,007,338		$	1.30	$	0.98
Granted		670,781			1,871,539			2,542,320			0.66		0.75
Issued		(291,155	)		(1,126,519	)		(1,417,674	)		1.09		0.84
Cancelled		—			(533,955	)		(533,955	)		—		0.88
Forfeited		—			(40,188	)		(40,188	)		—		0.77

Outstanding at November 30, 2012		844,236			2,713,605			3,557,841		$	0.85	$	0.87

As of November 30, 2014, there was $1,281,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Restated Plan. The unrecognized compensation cost is expected to be recognized over a weighted-average of 1.8 years. In fiscal 2014, there were no options granted, 362,242 RSUs and 288,121 shares of restricted stock granted. In fiscal 2014, we issued 655,384 shares of our common stock to holders of RSUs, 450,616 shares of restricted stock and withheld, cancelled or forfeited 334,337 RSUs or restricted stock.

Convertible Notes

In connection with the acquisition of Hudson, we issued the sellers convertible notes. See "Note 8—Debt" for a further discussion of the convertible notes.

Earnings Per Share

Earnings per share are computed using weighted average common shares and dilutive common equivalent shares outstanding. Potentially dilutive securities consist of outstanding options and warrants. A reconciliation of the numerator and denominator of basic earnings per share and diluted earnings per share is as follows:

	Year Ended
	November 30, 2014			November 30, 2013			November 30, 2012
	(in thousands, except per share data)
Basic (loss) earnings per share computation:
Numerator:
Net (loss) income	$	(27,716	)	$	(7,314	)	$	5,565


Denominator:
Weighted average common shares outstanding		68,226			67,163			65,496
(Loss) income per common share—basic
Net (loss) income	$	(0.41	)	$	(0.11	)	$	0.08


Diluted (loss) earnings per share computation:
Numerator:
Net (loss) income	$	(27,716	)	$	(7,314	)	$	5,565


Denominator:
Weighted average common shares outstanding		68,226			67,163			65,496
Effect of dilutive securities:
Restricted shares, RSU's, convertible securities and options		—			—			1,353

Dilutive potential common shares		68,226			67,163			66,849


(Loss) income per common share—dilutive
Net (loss) income	$	(0.41	)	$	(0.11	)	$	0.08

For fiscal 2014 and fiscal 2013, currently exercisable options, convertible notes, unvested restricted shares and unvested RSUs in the aggregate of 20,970,505 and 21,618,876, respectively, have been excluded from the calculation of the diluted loss per share as their effect would have been anti-dilutive. For fiscal 2012, currently exercisable options and warrants in the aggregate of 1,058,970 have been excluded from the calculation of diluted income per share because the exercise prices of such options and warrants were out-of-the-money.

Shares Reserved for Future Issuance

As of November 30, 2014, shares reserved for future issuance include (i) 550,000 shares of common stock issuable upon the exercise of stock options granted under the incentive plans; (ii) 1,033,851 shares of common stock issuable upon the vesting of RSUs; (iii) an aggregate of 3,085,935 shares of common stock available for future issuance under the Restated Plan as of November 30, 2014; and (iv) 18,719,094 shares of common stock issuable pursuant to the convertible notes.