STOCK-BASED COMPENSATION

12 Months Ended

Oct. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-based compensation is accounted for in accordance with ASC 718, “Compensation – Stock Compensation,” which requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model.

The Company's stock-based compensation plans include the Long-Term Incentive Plan, which is comprised of the 2020 Long-Term Incentive Plan (the “2020 LTIP”) and the 2006 Amended and Restated Long-Term Incentive Plan (the “2006 LTIP”); the 2005 Outside Directors Equity Award Plan (the “2005 Directors Plan”); and the 2001 Management Equity Incentive and Compensation Plan (the “2001 Plan”). The total stock compensation expense (income) recorded under these plans was $34.1 million, $(1.2) million and $12.7 million for periods ended October 31, 2021, 2020 and 2019 respectively.

The Long-Term Incentive Plan is intended to focus management on the key measures that drive superior performance over the longer term. The Long-Term Incentive Plan provides key employees with incentive compensation based upon consecutive and overlapping three-year performance periods that commence at the start of every year. For each three-year performance period, the performance goals are based on performance criteria as determined by the Compensation Committee.

2020 Long-Term Incentive Plan

For the three-year performance periods ending after fiscal 2021, awards were or will be made under the 2020 LTIP. Participants may be granted restricted stock units (“RSUs”) or performance stock units (“PSUs”) or a combination thereof.

The Company grants RSUs based on a three-year vesting period on the basis of service only. The RSUs are an equity-classified plan measured at fair value on the grant date recognized ratably over the service period. Dividend-equivalent rights may be granted in connection with an RSU award and are recognized in conjunction with the Company's dividend issuance and settled upon vesting of the award. Upon vesting, the RSUs are to be awarded in shares of Class A Common Stock.

The Company has made the following grants of RSUs under the 2020 LTIP:

Issuance Date

December 17, 2020

February 25, 2020

Service Period

11/1/2020 - 10/31/2023

11/1/2019 - 10/31/2022

RSUs Granted

139,360

147,325

Weighted Average Fair Value of RSUs

$48.50

$37.42

The Company grants PSUs for a three-year performance period based upon service, performance criteria and market conditions. The performance criteria are based on targeted levels of adjusted earnings before interest, taxes, depreciation, depletion and amortization and total shareholder return as determined by the Compensation Committee. The PSUs are a liability-classified plan wherein the fair value of the PSUs awarded is determined at each reporting period using a Monte Carlo simulation. A Monte Carlo simulation uses assumptions including the risk-free interest rate, expected volatility of the Company’s stock price and expected life of the awards to determine a fair value of the market condition throughout the vesting period. If earned, the PSUs are to be awarded in shares of Class A Common Stock.

The following table summarizes the key assumptions used in estimating the value of PSUs:


Issuance Date	December 17, 2020	February 25, 2020
Performance Period	11/1/2020 - 10/31/2023	11/1/2019 - 10/31/2022
PSUs Issued	253,102	258,519
Weighted Average Fair Value of PSUs at Issuance Date	$47.26	$35.58
Weighted Average Fair Value of PSUs at Valuation Date	$67.97	$73.50
Valuation Date Stock Price	$64.94	$64.94
Risk-Free Rate	0.5%	0.1%
Estimated Volatility	40.2%	31.0%

2006 Amended and Restated Long-Term Incentive Plan

For each of the three-year performance periods ending in fiscal 2021, 2020 and 2019, awards were made under the 2006 LTIP, with the performance goals based on targeted levels of adjusted earnings before interest, taxes, depreciation, depletion and amortization. For each of these periods, awards are to be paid 50% in cash and 50% in restricted stock. All restricted stock awards under the 2006 LTIP are fully vested at the date of award. Under the 2006 LTIP, the Company granted 80,252 shares of restricted Class A Common Stock with a grant date fair value of $50.08 for 2021 and 153,275 shares of restricted Class A Common Stock with a grant date fair value of $34.50 for 2020.

The total stock compensation expense (income) recorded under the 2020 and 2006 LTIP was $32.8 million, $(2.4) million and $11.6 million for the periods ended October 31, 2021, 2020 and 2019, respectively.

2005 Directors Plan

Under the 2005 Directors Plan, the Company granted 25,686 shares of restricted Class A Common Stock with a grant date fair value of $47.29 in 2021 and 27,768 shares of restricted Class A Common Stock with a grant date fair value of $38.89 in 2020. The total expense recorded under the 2005 Directors Plan was $1.2 million, $1.1 million and $1.1 million for the periods ended October 31, 2021, 2020 and 2019, respectively. All restricted stock awards under the 2005 Directors Plan are fully vested at the date of award.

For the 2005 Directors Plan, no stock options were granted in 2021, 2020 or 2019 and no shares were forfeited in 2021, 2020 or 2019.

2001 Plan

During 2019, the Company awarded an officer, as part of the terms of the officer's initial employment arrangement, 9,000 shares of Class A Common Stock under the 2001 Plan. These shares were issued subject to vesting and post-vesting restrictions on the sale or transfer until November 5, 2023. These shares vested in equal installments of 3,000 on November 5, 2019, 2020 and 2021. Share-based compensation expense was $0.1 million for each the period ended October 31, 2021, 2020 and 2019.

For the 2001 Plan, no stock options were granted in 2021, 2020 or 2019 and no shares were forfeited in 2021, 2020 or 2019.