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Stock Plans | 12 Months Ended
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Oct. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Stock Plans | Note 9. Stock Plans 2007 Long-Term Incentive Plan (2007 Plan) In March 2007, we received stockholder approval of the 2007 Plan. The 2007 Plan was subsequently amended and restated, and granted stockholder approval in March 2009, March 2011, and March 2016. The Third Amended and Restated 2007 Plan is designed to increase our stockholder value by attracting, retaining and motivating key employees and consultants who directly influence our profitability. The Third Amended and Restated 2007 Plan authorizes either our Board of Directors, or a designated committee thereof composed of two or more Non-Employee Directors, to grant to eligible individuals during the period ending December 31, 2026, up to 6,930,000 shares in the form of specified equity awards including stock options, restricted stock units and performance share awards, subject to adjustment for future stock splits, stock dividends, expirations, forfeitures and similar events. RSUs have no dividend or voting rights prior to vesting. As of October 31, 2022, 690,596 shares remained available under the Third Amended and Restated 2007 Plan for future grants. The amount of available shares includes shares which may be distributed under performance share awards. Share-Based Compensation Compensation expense and the related tax benefit recognized in our Consolidated Statements of Income for share-based awards, including the Employee Stock Purchase Plan, were as follows:
October 31, |  |  |
(In millions) | 2022 |  | 2021 |  | 2020
Selling, general and administrative expense | $ | 46.7 |  |  | $ | 38.4 |  |  | $ | 32.2 |
Cost of sales | 4.5 |  |  | 3.9 |  |  | 4.0 |
Research and development expense | 3.0 |  |  | 2.4 |  |  | 2.4 |
Total compensation expense | $ | 54.2 |  |  | $ | 44.7 |  |  | $ | 38.6 |
Related income tax benefit | $ | 5.0 |  |  | $ | 5.6 |  |  | $ | 4.8 |
Stock Options The fair value of each stock option award granted is estimated on the date of grant using the Black-Scholes option valuation model and assumptions noted in the following table.
Years Ended October 31, | 2022 |  | 2021 |  | 2020
Expected life | 4.1 years |  | 4.0 years |  | 4.4 years
Expected volatility | 25.8 | % |  | 30.3 | % |  | 24.5 | %
Risk-free interest rate | 1.1 | % |  | 0.3 | % |  | 1.6 | %
Dividend yield | 0.02 | % |  | 0.02 | % |  | 0.02 | %
The activity and status of our stock option plans are summarized below:
| Number of Shares |  | Weighted- Average Exercise Price Per Share |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value
Outstanding at October 31, 2021 | 972,692 |  |  | $ | 245.09 |  |  |  |  |
Granted | 122,760 |  |  | $ | 403.44 |  |  |  |  |
Exercised | (26,866) |  |  | $ | 171.87 |  |  |  |  |
Forfeited or expired | (4,743) |  |  | $ | 325.21 |  |  |  |  |
Outstanding at October 31, 2022 | 1,063,843 |  |  | $ | 264.85 |  |  | 5.75 |  |
Vested and expected to vest at October 31, 2022 | 1,038,594 |  |  | $ | 262.91 |  |  | 5.70 |  | $ | 38,806,329 |
Vested and exercisable at October 31, 2022 | 624,512 |  |  | $ | 223.45 |  |  | 4.57 |  | $ | 35,586,767 |
The weighted-average fair value of options granted during fiscal 2022, 2021 and 2020, estimated as of the grant date using the Black-Scholes option pricing model, for the 2007 Plan was $90.41, $84.10 and $70.45, respectively. The total intrinsic value of options exercised during the fiscal years ended October 31, 2022, 2021 and 2020 was $6.6 million, $64.7 million and $22.6 million, respectively. Stock options outstanding under our current plans have been granted at prices which are either equal to or above the market value of the common stock on the date of grant. Options granted under the 2007 Plan generally vest over a range of three to five years based on service conditions and expire no later than ten years after the grant date. Options granted under the 2020 Directors' Plan generally vest in one year and expire no later than ten years after the grant date. We generally recognize compensation expense ratably over the vesting period. As of October 31, 2022, there was $21.0 million of total unrecognized compensation cost related to nonvested options, which is expected to be recognized over a remaining weighted-average vesting period of 2.3 years. Restricted Stock Units RSUs granted under the 2007 Plan generally vest over three to five years. The grant-date fair value of RSUs is estimated based on the market price of our common stock. We recognize compensation expense ratably over the vesting period. As of October 31, 2022, there was $64.4 million of total unrecognized compensation cost related to nonvested RSUs, which is expected to be recognized over a remaining weighted-average vesting period of 2.5 years. The status of our non-vested RSUs is summarized below:
| Number of Shares |  | Weighted- Average Grant Date Fair Value Per Share
Non-vested RSUs at October 31, 2021 | 317,335 |  |  | $ | 293.80 |
Granted | 113,079 |  |  | $ | 399.21 |
Vested and issued | (113,301) |  |  | $ | 271.74 |
Forfeited or expired | (27,875) |  |  | $ | 324.67 |
Non-vested RSUs at October 31, 2022 | 289,238 |  |  | $ | 340.68 |
Performance Units Performance units may be granted to selected key employees with vesting contingent upon meeting future reported earnings per share goals over a defined performance cycle, usually three years. Performance units, if earned, may be paid in cash or shares of common stock. We granted performance unit awards on December 8, 2020 under the 2007 Plan. The performance shares actually earned will range from zero to 200% of the target number of performance shares for performance periods ending in fiscal 2021 through fiscal 2024. Subject to limited exceptions set forth in the performance share plan, any shares earned will be distributed in the subsequent fiscal year after the performance period. The fair value of performance unit awards is estimated on the date of grant based on the current market price of our common stock and the estimate of probability of award achievement. This estimate is reviewed each fiscal quarter and adjustments are recorded if it is determined that the estimate of probability of award achievement has changed. We recognize compensation expense ratably over the vesting period. As of October 31, 2022, there was $11.2 million of total unrecognized compensation cost related to non-vested performance units, which is expected to be recognized over a remaining weighted-average vesting period of 1.8 years. Employee Stock Purchase Plan On March 18, 2019, the Company received stockholder approval for the Employee Stock Purchase Plan (ESPP). The first offering period began on November 4, 2019 and offerings are generally made on a quarterly basis. The purpose of the ESPP is to provide eligible employees of the Company with the opportunity to acquire shares of common stock at 85% of the market price on the last business day of each offering period by means of accumulated payroll deductions. The ESPP initially authorized the issuance of 1,000,000 shares of common stock. These shares will be made available from shares of common stock reacquired by the Company as Treasury Stock. During fiscal 2022 and 2021, we issued 22,695 and 17,575 shares to our employees under the ESPP, respectively. At October 31, 2022, the number of shares remaining available for future issuance under the ESPP was 948,090 shares. Total ESPP share-based compensation recognized during fiscal 2022 and 2021 was $1.1 million and $1.0 million, respectively.

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