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, including directors, 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 three months and four years. Incentive stock options were not granted in fiscal 2014 or during first six months of fiscal 2015. During fiscal 2014, 89,500 shares of restricted stock were granted to several employees as incentives for future performance. The market value of the Company's stock on the date of awards ranged between $14.97 and $20.64. During the first six months of fiscal 2015, 22,504 shares of restricted stock with a three month vesting were issued to the members of the Company's Board of Directors as part of their director compensation. The market value of the Company's stock on the date of the award was $14.22. At April 30, 2015, 85,132 shares of restricted stock were outstanding. During the fiscal quarter ended April 30, 2015, 10,000 shares of restricted stock vested and 3,750 shares were forfeited. During the first six months of fiscal 2015, 45,876 shares of restricted stock vested and 7,000 shares were forfeited.

Activity in the Company’s incentive plan for the six months ended April 30, 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	(86,468	)	$9.92
Canceled	(12,333	)	$7.19
Outstanding at April 30, 2014	137,333		$9.73	5.76	$976
Options exercisable at April 30, 2014	127,666		$9.86	5.61	$890

Options outstanding at November 1, 2014	123,333		$9.69
Options:
Granted	—		$0.00
Exercised	(18,650	)	$8.30
Canceled	(11,350	)	$11.58
Outstanding at April 30, 2015	93,333		$9.74	4.51	$244
Options exercisable at April 30, 2015	93,333		$9.74	4.51	$244

At both April 30, 2015 and April 30, 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.

All compensation related to stock options was recognized in the first quarter of fiscal year 2015 as all stock options are fully vested. For the six months ended April 30, 2015, compensation expense related to stock options effectively reduced income before taxes by $15. For the three and six months ended April 30, 2014, the Company recorded compensation expense related to stock options currently vesting, effectively reducing income before taxes by $22 and $106. For both the three and six months ended April 30, 2015 and April 30, 2014, there was no impact on earnings per share basic and diluted related to the stock option compensation expense because all compensation expense has been recognized. For the six months ended April 30, 2015 and 2014, the total compensation cost related to the restricted stock currently vested was $527 and $183, respectively. The total estimated compensation cost related to the non-vested restricted stock is $1,313, 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 six months ended April 30, 2015 and 2014, approximately 85,000 and 129,000 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 April 30,				Six Months Ended April 30,
	2015		2014		2015		2014
	(As Restated)				(As Restated)
Net income available to common stockholders	$	6,353	$	8,129	$	8,796	$	13,068
Basic weighted average shares	17,211		17,081		17,217		17,063
Effect of dilutive securities:
Stock options	25		77		31		85
Diluted weighted average shares	17,236		17,158		17,248		17,148
Basic income per share	$	0.37	$	0.48	$	0.51	$	0.77
Diluted income per share	$	0.37	$	0.47	$	0.51	$	0.76