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 us to expense share-based payment ("SBP") awards with compensation cost for SBP transactions measured at fair value. For stock options, we have 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 our historical experience. For restricted stock and restricted stock units, we are 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

Long-Term / Annual Incentives

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 our 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 following table summarizes the Company’s Incentive Plan activity for the nine months ended July 31, 2017 and 2016:



	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)	Weighted Average Remaining Contractual Life



November 1, 2015	90,666		$9.70	4.10	124,255		$13.77	2.28	—		—
Granted	—		—		312,251		4.30		21,539		$4.17
Options exercised or restricted stock vested	—		—		(25,959	)	16.53		—		—
Forfeited or expired	(1,000	)	12.04		(5,817	)	5.71		—		—
July 31, 2016	89,666		$9.67	3.34	404,730		$6.40	2.00	21,539		$4.17	1.84

November 1, 2016	89,666		$9.67	3.04	376,340		$6.11	1.83	21,539		$4.17
Granted	—		—		245,932		7.93		29,253		8.62
Options exercised or restricted stock vested	(8,000	)	9.79		(158,512	)	5.71		(13,574	)	4.17
Forfeited or expired	(23,500	)	13.38		(4,893	)	9.20		—		—
July 31, 2017	58,166		$8.16	2.78	458,867		$7.19	1.78	37,218		$7.67	2.10

(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 nine months ended July 31, 2017 and 2016 as follows:



	Three Months Ended July 31,				Nine Months Ended July 31,
	2017		2016		2017		2016
Restricted stock (1)	$	505	$	319	$	1,286	$	761
Restricted stock units	33		14		86		23
Total	$	538	$	333	$	1,372	$	784

(1) Includes $76 of additional expense from the impact of early adopting ASU 2016-09 for the three and nine months ended July 31, 2017.

Stock Options - The exercise price of each stock option equals the market price of our common stock on the grant date. Compensation expense is recorded at the grant date fair value, adjusted for forfeitures as they occur, and is recognized over the applicable vesting periods. Our stock options generally vest over three years, with a maximum term of ten years. Incentive stock options were not granted during the three and nine months ended July 31, 2017 and 2016.

Stock options were exercised during the three and nine months ended July 31, 2017. Options that have an exercise price greater than the market price are excluded from the intrinsic value computation. At both July 31, 2017 and July 31, 2016, the exercise price of some of our stock option grants were higher than the market value of the our stock. At July 31, 2016, the exercise price of some of our stock option grants were higher than the market value of the Company's stock. At July 31, 2017 and July 31, 2016, the options outstanding and exercisable had an intrinsic value of $81 and $183, respectively.

Restricted Stock Awards - The grant date fair value of each restricted stock award equals the fair value of our 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, adjusted for forfeitures as they occur, and is recognized over the applicable vesting periods. The vesting periods range between one to four years. As of July 31, 2017, there was approximately $2,489 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 our common stock based on a 20 day EMA as of the close of business on the Friday preceding the award date. Compensation expense is recorded at the grant date fair value, adjusted for forfeitures as they occur, and is recognized over the applicable vesting periods. The vesting periods range between one to three years. As of July 31, 2017, there was approximately $221 of total unrecognized compensation expense related to these restricted stock units that is expected to be recognized over the next three fiscal years.

Cash Incentive Award Agreements - Under the provisions of the 2016 Plan, we granted certain awards pursuant to Cash Incentive Award Agreements to approximately 12 executives on March 10, 2016. Additional awards were granted on December 14, 2016 to approximately 70 executives and director level employees. These awards were designed to provide the individuals with an incentive to participate in the long-term success and growth of the Company. The Cash Incentive Award Agreements provide for cash-based awards that vest upon payment. The awards granted on March 10, 2016 will be paid after October 31, 2019 if certain performance goals are achieved. The awards granted on December 14, 2016 will be paid after October 31, 2020 if certain performance goals are achieved. These awards are also subject to payment upon a change in control or termination of employment, if certain performance goals are achieved. One half of the awards will be based on 3-year return on capital employed and 3-year adjusted EBITDA goals, which could range from 0% to 200% based on the achievement of performance goals. These awards represent unfunded, unsecured obligations of the Company.

During the three and nine months ended July 31, 2017, we recorded expense related to these awards of $203 and $485, respectively. At July 31, 2017, we had a liability of $485 related to these awards and is presented as other non-current liabilities in the condensed consolidated balance sheets.

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 restricted stock awards, restricted stock units and stock options outstanding under the 2016 Plan are included in the diluted earnings per share calculation to the extent they are dilutive. For the nine months ended July 31, 2017 and 2016, approximately 7,000 and 481,000 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 (loss) per share:



(Shares in thousands)	Three Months Ended July 31,						Nine Months Ended July 31,
	2017			2016			2017		2016
Net income (loss) available to common stockholders	$	(1,982	)	$	(678	)	$	229	$	(1,596	)
Basic weighted average shares	18,559			17,614			18,048		17,614
Effect of dilutive securities:
Restricted share units and stock options (1)	—			—			25		—
Diluted weighted average shares	18,559			17,614			18,073		17,614
Basic income (loss) per share	$	(0.11	)	$	(0.04	)	$	0.01	$	(0.09	)
Diluted income (loss) per share	$	(0.11	)	$	(0.04	)	$	0.01	$	(0.09	)

(1) Due to a loss for the for the three months ended July 31, 2017 and the three and nine months ended July 31, 2016, no restricted share awards and units are included because the effect would be anti-dilutive.