Share-Based Compensation Plans

6 Months Ended

Apr. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation Plans

Share-Based Compensation Plans

We have shareholder approved equity incentive plans and a shareholder approved Section 423 Stock Purchase Plan (the “ESPP”). We account for stock awards to employees and non-employee directors under the fair value method. We determine the fair value of stock options at the grant date using the Black-Scholes valuation model. The model requires us to make estimates and assumptions regarding the expected life of the award, the risk-free interest rate, the expected volatility of our common stock price and the expected dividend yield. The fair value of restricted stock units ("RSU") and restricted stock awards (“RSA”) is based on the common stock price on the date of grant. The fair value of stock awards is amortized to expense over the vesting period, generally four years.

Share-based compensation reflected in the consolidated statements of operations were as follows:

	Three Months Ended April 30,				Six Months Ended April 30,
	2013		2012		2013		2012
Costs of revenues	$	149	$	93	$	281	$	253
General and administrative expenses	282		160		597		457
Research and development expenses	79		49		139		132
Total share-based compensation	$	510	$	302	$	1,017	$	842

The following table summarizes stock option activity for the six months ended April 30, 2013:

	Number of options		Weighted average option  price ($)
Outstanding at October 31, 2012	3,120,456		6.96
Granted	279,746		0.94
Canceled	(178,663	)	6.32
Outstanding at April 30, 2013	3,221,539		6.47

As of April 30, 2013, there were 5,127,626 RSA's and RSU's outstanding with a weighted average per share fair value of $1.19. There were 905,645 RSA's and RSU's granted during the six months ended April 30, 2013 and forfeitures totaled 1,850 during this period. During the second quarter of fiscal year 2013, the Company established an international award program to include RSU's for the benefit of certain employees outside the United States.

For the six months ended April 30, 2013, 108,008 shares were issued under the ESPP at a per share cost of $0.79. There were 666,365 shares of common stock reserved for issuance under the ESPP as of April 30, 2013.