For the Company, FASB ASC Topic 718 “Compensation – Stock Compensation” affects the stock options that have been granted and requires the Company to expense share-based payment (“SBP”) awards with compensation cost for SBP transactions measured at fair value. The Company has elected to use the simplified method of calculating the expected term of the stock options and historical volatility to compute fair value under the Black-Scholes option-pricing model. The risk-free rate for periods within the contractual life of the option is based on the U.S. zero coupon Treasury yield in effect at the time of grant. Forfeitures have been estimated based upon the Company’s historical experience.

1993 Key Employee Stock Incentive Plan

The Company maintains the Amended and Restated 1993 Key Employee Stock Incentive Program (the "Incentive Plan"), which authorizes grants to officers and other key employees of the Company and its subsidiaries of (i) stock options that are intended to qualify as incentive stock options, (ii) nonqualified stock options and (iii) restricted stock awards. An aggregate of 2,700,000 shares of Common Stock, subject to adjustment upon occurrence of certain events to prevent dilution or expansion of the rights of participants that might otherwise result from the occurrence of such events, was reserved for issuance pursuant to the Incentive Plan. An individual’s award of stock options is limited to 500,000 shares in a five-year period.

Non-qualified stock options, incentive stock options and restricted stock awards have been granted to date and all options have been granted at the market price at the date of grant. Options expire over a period not to exceed ten years from the date of grant and vest ratably over a three year period. The vesting period of the restricted stock awards range between six months and four years. Incentive stock options were not granted in fiscal 2014 or during the first three months of fiscal 2015. During fiscal 2014, 89,500 shares of restricted stock were granted to several employees as incentives for future performance. Restricted stock was not granted during the first three months of fiscal 2015. The market value of the Company's stock on the date of awards ranged between $14.97 and $20.64. At January 31, 2015, 98,882 shares of restricted stock were outstanding. During the fiscal quarter ended January 31, 2015, 15,000 shares of restricted stock vested and 3,000 shares were forfeited.

Activity in the Company’s incentive plan for the three months ended January 31, 2015 and 2014 was as follows:



	Number of Shares		Weighted Average Exercise Price Per Share	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Options outstanding at November 1, 2013	236,134		$9.93
Options:
Granted	—		$0.00
Exercised	(33,468	)	$9.18
Canceled	(8,333	)	$8.10
Outstanding at January 31, 2014	194,333		$10.13	5.68	$962
Options exercisable at January 31, 2014	184,666		$10.24	5.56	$894

Options outstanding at November 1, 2014	123,333		$9.69
Options:
Granted	—		$0.00
Exercised	(6,000	)	$8.67
Canceled	—		$0.00
Outstanding at January 31, 2015	117,333		$9.74	4.88	$337
Options exercisable at January 31, 2015	117,333		$9.74	4.88	$337

At both January 31, 2015 and January 31, 2014, the exercise price of some of the Company’s stock option grants was higher than the market value of the Company’s stock. The stock option grants whose exercise price is higher that the market value of the Company's stock are excluded from the computation of aggregate intrinsic value of the Company’s outstanding and exercisable stock options.

For the three months ended January 31, 2015 the Company recorded compensation expense related to stock options currently vesting, effectively reducing income before taxes by $15. For the three months ended January 31, 2014, the Company recorded compensation expense related to stock options currently vesting, effectively reducing income before taxes by $83. For the three months ended January 31, 2015 and for the three months ended January 31, 2014, there was no impact on earnings per share basic and diluted related to the stock option compensation expense. All compensation cost related to stock options has been recognized as all stock options are fully vested. For the three months ended January 31, 2015 and 2014, the total compensation cost related to the restricted stock currently vested was $184 and $67, respectively. The total estimated compensation cost related to the non-vested restricted stock is $1,337, which will be expensed through June of 2018.

Earnings per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period. In addition, the shares of Common Stock issuable pursuant to stock options outstanding under the Amended and Restated 1993 Key Employee Stock Incentive Program are included in the diluted earnings per share calculation to the extent they are dilutive. For the three months ended January 31, 2015 and 2014, approximately 100,000 and 119,000 stock awards, respectively, were excluded from the computation of diluted earnings per share because they were anti-dilutive. The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for net income per share:



(Shares in thousands)	Three Months Ended January 31,
	2015		2014
	(As Restated)
Net income available to common stockholders	$	2,443	$	4,939
Basic weighted average shares	17,215		17,113
Effect of dilutive securities:
Stock options	40		95
Diluted weighted average shares	17,255		17,208
Basic income per share	$	0.14	$	0.29
Diluted income per share	$	0.14	$	0.29