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.

The following table summarizes the Company’s Incentive Plan activity for the three months ended January 31, 2016 and 2015:



	Options			Restricted Stock Awards
Outstanding at:	Options		Weighted Average Exercise Price	Restricted Shares		Weighted Average Grant Date Fair Value



November 1, 2014	123,333		$9.69	116,882		$16.81
Options exercised or restricted stock vested	(6,000	)	$8.67	(15,000	)	$20.64
Forfeited or expired	—		—	(3,000	)	$20.64
January 31, 2015	117,333		$9.74	98,882		$16.11

November 1, 2015	90,666		$9.70	124,255		$13.77
Granted	—		—	32,394		$5.22
Options exercised or restricted stock vested	—		—	(15,564	)	$19.36
January 31, 2016	90,666		$9.70	141,085		$11.19

Restricted Stock Awards

The grant date fair value of each restricted stock award equals the market price of the Company's common stock on its date of grant. Compensation expense is recorded at the grant date fair value, less an estimated forfeiture amount, and is recognized over the applicable vesting periods. The vesting periods range between three months and four years. During the three months ended January 31, 2016 and 2015, the Company recorded compensation expense related to the restricted stock awards of $189 and $184, respectively. As of January 31, 2016, there was approximately $1,320 of total unrecognized compensation costs related to these restricted stock awards to be recognized over the next three fiscal years.

Stock Options

The exercise price of each stock option equals the market price of the Company's common stock on its grant date. Compensation expense is recorded at the grant date fair value, less an estimated forfeiture amount, and is recognized on a straight-line basis over the applicable vesting period. The Company's stock options generally vest over three years, with a maximum term of ten years. Incentive stock options were not granted during the three months ended January 31, 2016 and 2015.

For the three months ended January 31, 2016 and 2015, the Company recorded compensation expense related to the stock options that vested during the period, effectively reducing pretax income by $0 and $15, respectively.

Stock options were not exercised during the three months ended January 31, 2016. For the three months ended January 31, 2015, cash received from the exercise of stock options was $52. Options that have an exercise price greater than the market price are excluded from the intrinsic value computation. At both January 31, 2016 and January 31, 2015, the exercise price of some of the Company's stock option grants were higher than the market value of the Company's stock. At January 31, 2016 and January 31, 2015, the options outstanding and exercisable had an intrinsic value of $16 and $337, respectively. The weighted average remaining contractual life for the options outstanding and exercisable at January 31, 2016 was 3.85 years.

Earnings per Share

Basic earnings per share is computed by dividing net income (loss) 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, 2016 approximately 467 stock awards were excluded from the computation of loss per common share due to the Company's net loss for the period. For the three months ended January 31, 2015, approximately 100 stock awards 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,
	2016			2015
Net income (loss) available to common stockholders	$	(5,059	)	$	2,443
Basic weighted average shares	17,342			17,215
Effect of dilutive securities:
Stock options	—			40
Diluted weighted average shares	17,342			17,255
Basic income (loss) per share	$	(0.29	)	$	0.14
Diluted income (loss) per share	$	(0.29	)	$	0.14