Stock-Based Benefit Plans

The Company grants stock options, restricted stock and various types of restricted stock units to its employees and its non-employee directors. Additionally, the Company has an employee stock purchase plan that allows employees to purchase Company stock at a discount.

Beginning in fiscal 2012, the Company changed the mix of stock-based compensation to its employees (other than certain senior executives) by reducing the number of stock options it grants and, in their place, issued non-performance based restricted stock units ("RSUs") as a form of compensation. The Company also replaced its stock price-based restricted stock unit ("Stock Price-Based RSUs") awards for certain senior executives with a performance-based restricted stock (“Performance-Based RSUs”) award program.

Information regarding the amount of total stock-based compensation expense and tax benefit recognized by the Company, for the periods indicated, is as follows (amounts in thousands):



	Three months ended January 31,
	2014		2013
Total stock-based compensation expense recognized	$	7,669	$	5,684
Income tax benefit recognized	$	2,972	$	2,079

At January 31, 2014 and October 31, 2013, the aggregate unamortized value of outstanding stock-based compensation awards was approximately $37.8 million and $19.9 million, respectively.

Information about the Company’s more significant stock-based compensation programs is outlined below.

Stock Options

The fair value of each option award is estimated on the date of grant using a lattice-based option valuation model that uses assumptions noted in the following table. The lattice-based option valuation model incorporates ranges of assumptions for inputs, which are disclosed in the table below. Expected volatilities were based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other factors. The expected lives of options granted were derived from the historical exercise patterns and anticipated future patterns and represent the period of time that options granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different behaviors. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The weighted-average assumptions and the fair value used for stock option grants in fiscal 2014 and 2013 were as follows:



	2014	2013
Expected volatility	36.44% - 44.71%	44.04% - 48.13%
Weighted-average volatility	42.71%	46.70%
Risk-free interest rate	1.45% - 2.71%	0.64% - 1.56%
Expected life (years)	4.55 - 9.02	4.48 - 8.88
Dividends	none	none
Weighted-average grant date fair value per share of options granted	$14.26	$13.05

Stock compensation expense, related to stock options, for the periods indicated, was as follows (amounts in thousands):



	2014		2013
Three months ended January 31,	$	4,030	$	3,475

Performance-Based Restricted Stock Units

The Executive Compensation Committee of the Company’s Board of Directors ("Executive Compensation Committee") approved awards of Performance-Based RSUs relating to shares of the Company’s common stock to certain of its senior management. The Performance-Based RSUs are based on the attainment of certain performance metrics of the Company in the fiscal year of grant if the performance targets are met. The number of shares underlying the Performance-Based RSUs that will be issued to the recipients may range from 90% to 110% of the base award depending on actual performance as compared to the target performance goals. The Performance-Based RSUs vest over a four-year period provided the recipients continue to be employed by the Company or serve on the board of directors of the Company (as applicable) as specified in the award document.

The value of the Performance-Based RSUs was determined to be equal to the estimated number of shares of the Company’s common stock to be issued multiplied by the closing price of the Company’s common stock on the New York Stock Exchange ("NYSE") on the later of the date the performance goals were approved by the Executive Compensation Committee, or on the date the Performance-Based RSUs were granted ("Valuation Date"). The Company evaluates the performance goals quarterly and estimates the number of shares underlying the Performance-Based RSUs that are probable of being issued. Information regarding the issuance, valuation assumptions and amortization of the Company’s Performance-Based RSUs issued in fiscal 2014 and 2013 is provided below.



	2014		2013
Number of shares underlying Performance-Based RSUs to be issued	288,667		302,511
Closing price of the Company’s common stock on Valuation Date	$	35.16	$	37.78
Aggregate fair value of Performance-Based RSUs to be issued (in thousands)	$	10,150	$	11,429
Performance-Based RSU expense recognized in the three months ended January 31, (in thousands)	$	2,071	$	514

Note: The fiscal 2014 number of shares underlying Performance-Based RSUs to be issued and their aggregate fair value is estimated.

Information regarding the aggregate number of outstanding Performance-Based RSUs and the aggregate unamortized value of the outstanding Performance-Based RSUs, as of the date indicated, is provided below.



	January 31, 2014		October 31, 2013
Aggregate outstanding Performance-Based RSUs	961,354		672,687
Cumulative unamortized value of Performance-Based RSUs (in thousands)	$	16,198	$	8,120

Stock Price-Based Restricted Stock Units

Information regarding the amortization of the Company’s Stock Price-Based RSUs, for the periods indicated, is provided below (amounts in thousands):



	2014		2013
Three months ended January 31,	$	231	$	562

Information regarding the aggregate number of outstanding Stock Price-Based RSUs and aggregate unamortized value of the outstanding Stock Price-Based RSUs, as of the date indicated, is provided below:



	January 31, 2014		October 31, 2013
Aggregate outstanding Stock Price-Based RSUs	—		306,000
Cumulative unamortized value of Stock Price-Based RSUs (in thousands)	$	—	$	231

In December 2013 and 2012, the Company distributed 306,000 and 200,000 shares, respectively, of stock pursuant to a Stock Price-Based RSU award.

Non-Performance Based Restricted Stock Units

The Company issued RSUs to various officers, employees and non-employee directors. The value of the RSUs was determined to be equal to the number of shares of the Company’s common stock to be issued pursuant to the RSUs, multiplied by the closing price of the Company’s common stock on the NYSE on the date the RSUs were awarded. Information regarding these RSUs issued in the three months ended January 31, 2014 and 2013 is as follows:



	2014		2013
Number of RSUs issued	99,336		94,080
Closing price of the Company’s common stock on date of issuance	$	35.16	$	32.22
Aggregate fair value of RSUs issued (in thousands)	$	3,493	$	3,031

Information regarding the amortization of the Company’s RSUs, for the periods indicated, is as follows (amounts in thousands):



	2014		2013
Three months ended January 31,	$	1,311	$	1,112

Information regarding the aggregate number of outstanding RSUs and aggregate unamortized value of the outstanding RSUs, as of the date indicated, is as follows:



	January 31, 2014		October 31, 2013
Aggregate outstanding RSUs	307,798		225,252
Cumulative unamortized value of RSUs (in thousands)	$	3,852	$	1,706