Stock Incentive Compensation falls under the scope of FASB ASC Topic 718 "Compensation – Stock Compensation" and affects the stock awards 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. For stock options, the Company has elected to use the simplified method of calculating the expected term 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. For restricted stock and restricted stock units, the Company is computing fair value based on a twenty day Exponential Moving Average ("EMA") as of the close of business the Friday preceding the award date.

2016 Equity and Incentive Compensation Plan

On March 9, 2016, stockholders approved and adopted the 2016 Equity and Incentive Compensation Plan ("2016 Plan") which replaced the Amended and Restated 1993 Key Employee Stock Incentive Program. The 2016 Plan authorizes the Compensation Committee of the Board of Directors of the Company to grant to officers and other key employees, including directors, of the Company and its subsidiaries (i) option rights, (ii) appreciation rights, (iii) restricted shares, (iv) restricted stock units, (v) cash incentive awards, performance shares and performance units and (vi) other awards. An aggregate of 1,500,000 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 option and / or appreciation rights is limited to 500,000 shares during any calendar year. Also, an individual's award of restricted shares, restricted share units and performance based awards is limited to 350,000 shares during any calendar year.

The Compensation Committee of our Board of Directors approved the grant of restricted stock and restricted stock units under the 2016 Plan shown in the table below during the six months ended April 30, 2016:



	Granted	20 Day EMA
Restricted Stock	276,856	$4.17
Restricted Stock Units	21,539	$4.17

The following table summarizes the Company’s Incentive Plan activity for the six months ended April 30, 2016 and 2015:



	Stock Options				Restricted Stock				Restricted Stock Units
Outstanding at:	Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life	Restricted Shares		20 Day EMA (1)	Weighted Average Remaining Contractual Life	Restricted Share Units	20 Day EMA (1)



November 1, 2014	123,333		$9.69	5.15	116,882		$16.81	2.58	—	—
Granted	—		—		22,504		$14.22		—	—
Options exercised or restricted stock vested	(18,650	)	$8.30		(25,000	)	$18.87		—	—
Forfeited or expired	(11,350	)	$11.58		(6,750	)	$20.64		—	—
April 30, 2015	93,333		$9.74	4.51	107,636		$15.55	1.68	—	—

November 1, 2015	90,666		$9.70	4.10	124,255		$13.77	2.28	—	—
Granted	—		—		309,251		$4.28		21,539	$4.17
Options exercised or restricted stock vested	—		—		(21,458	)	$16.64		—	—
Forfeited or expired	(1,000	)	$12.04		(1,500	)	$10.13		—	—
April 30, 2016	89,666		$9.67	3.59	410,548		$6.48	2.25	21,539	$4.17

(1) 20 day EMA effective with commencement of the 2016 Plan on March 9, 2016.

The Company recorded stock compensation expense related to stock options, restricted stock and restricted stock units during the three and six months ended April 30, 2016 and 2015 as follows:



	Three Months Ended April 30,				Six Months Ended April 30,
	2016		2015		2016		2015
Stock options	$	—	$	—	$	—	$	15
Restricted stock	253		344		442		527
Restricted stock units	9		—		9		—
Total	$	262	$	344	$	451	$	542

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 and six months ended April 30, 2016 and 2015.

Stock options were not exercised during the three and six months ended April 30, 2016. Options that have an exercise price greater than the market price are excluded from the intrinsic value computation. At both April 30, 2016 and April 30, 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 April 30, 2016 and April 30, 2015, the options outstanding and exercisable had an intrinsic value of $64 and $244, respectively.

Restricted Stock Awards

The grant date fair value of each restricted stock award equals the fair value of the Company's common stock based on a 20 day exponential moving average as of the close of business on the Friday preceding the award date. 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 one to four years. As of April 30, 2016, there was approximately $2,009 of total unrecognized compensation expense related to non-vested restricted stock that is expected to be recognized over the next three fiscal years.

Restricted Stock Units

The grant date fair value of each restricted stock unit equals the fair value of the Company's common stock based on a 20 day exponential moving average as of the close of business on the Friday preceding the award date. 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 one to three years. As of April 30, 2016, there was approximately $76 of total unrecognized compensation expense related to these restricted stock units that is expected to be recognized over the next three fiscal 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 six months ended April 30, 2016 and 2015, approximately 481 and 85 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,
	2016		2015		2016			2015
Net income (loss) available to common stockholders	$	3,057	$	6,353	$	(2,002	)	$	8,796
Basic weighted average shares	17,615		17,211		17,615			17,217
Effect of dilutive securities:
Stock options	5		25		—			31
Diluted weighted average shares	17,620		17,236		17,615			17,248
Basic income (loss) per share	$	0.17	$	0.37	$	(0.11	)	$	0.51
Diluted income (loss) per share	$	0.17	$	0.37	$	(0.11	)	$	0.51