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Stock-Based Benefit Plans | 12 Months Ended
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Oct. 31, 2017
Stock-Based Benefit Plans [Abstract] |
Stock-Based Benefit Plans | Stock-Based Benefit Plans We grant stock options, restricted stock, and various types of restricted stock units to our employees and our nonemployee directors under our stock incentive plans. We have two active stock incentive plans, one for employees (including officers) and one for nonemployee directors. Our active stock incentive plans provide for the granting of incentive stock options (solely to employees) and nonqualified stock options with a term of up to 10 years at a price not less than the market price of the stock at the date of grant. Our active stock incentive plans also provide for the issuance of stock appreciation rights and restricted and unrestricted stock awards and stock units, which may be performance-based. At October 31, 2017, 2016, and 2015, we had 5.8 million; 6.8 million; and 7.5 million shares, respectively, available for grant under our stock incentive plans. We have two additional stock incentive plans for employees, officers, and directors that are inactive except for outstanding stock option awards at October 31, 2017. No additional options may be granted under these plans. Stock options granted under these plans were made with a term of up to 10 years at a price not less than the market price of the stock at the date of grant and generally vested over a four-year period for employees and a two-year period for nonemployee directors. The following table provides information regarding the amount of total stock-based compensation expense recognized by us for fiscal 2017, 2016, and 2015 (amounts in thousands):
| 2017 |  | 2016 |  | 2015
Total stock-based compensation expense recognized | $ | 28,466 |  |  | $ | 26,679 |  |  | $ | 22,903 |
Income tax benefit recognized | $ | 11,125 |  |  | $ | 10,450 |  |  | $ | 8,767 |
At October 31, 2017, 2016, and 2015, the aggregate unamortized value of outstanding stock-based compensation awards was approximately $24.2 million, $27.0 million, and $25.2 million, respectively. Information about our more significant stock-based compensation programs is outlined below. Stock Options: Stock options granted to employees generally vest over a four-year period, although certain grants may vest over a longer or shorter period. Stock options granted to nonemployee directors generally vest over a two-year period. Shares issued upon the exercise of a stock option are either from shares held in treasury or newly issued shares. 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 our stock, historical volatility of our 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 following table summarizes the weighted-average assumptions and fair value used for stock option grants in each of the fiscal years ended October 31, 2017, 2016, and 2015:
| 2017 |  | 2016 |  | 2015
Expected volatility | 29.93% - 41.05% |  | 32.03% - 42.31% |  | 32.69% - 42.58%
Weighted-average volatility | 34.72% |  | 34.69% |  | 36.36%
Risk-free interest rate | 1.96% - 2.52% |  | 1.58% - 2.14% |  | 1.53% - 2.11%
Expected life (years) | 4.60 - 9.24 |  | 4.56 - 9.17 |  | 4.54 - 9.12
Dividends | none |  | none |  | none
Weighted-average fair value per share of options granted | $12.16 |  | $11.24 |  | $11.67
The fair value of stock option grants is recognized evenly over the vesting period of the options or over the period between the grant date and the time the option becomes nonforfeitable by the employee, whichever is shorter. Information regarding the stock compensation expense, related to stock options, for fiscal 2017, 2016 and 2015 was as follows (amounts in thousands):
| 2017 |  | 2016 |  | 2015
Stock compensation expense recognized - options | $ | 10,337 |  |  | $ | 10,986 |  |  | $ | 9,610 |
At October 31, 2017, total compensation cost related to nonvested stock option awards not yet recognized was approximately $10.6 million, and the weighted-average period over which we expect to recognize such compensation costs was approximately 2.2 years. The following table summarizes stock option activity for our plans during each of the fiscal years ended October 31, 2017, 2016, and 2015 (amounts in thousands, except per share amounts):
| 2017 |  | 2016 |  | 2015
| Number of options |  | Weighted- average exercise price |  | Number of options |  | Weighted- average exercise price |  | Number of options |  | Weighted- average exercise price
Balance, beginning | 8,514 |  |  | $ | 26.36 |  |  | 8,025 |  |  | $ | 25.75 |  |  | 9,358 |  |  | $ | 25.94 |
Granted | 595 |  |  | 31.61 |  |  | 965 |  |  | 32.85 |  |  | 870 |  |  | 32.49 |
Exercised | (2,863 | ) |  | 24.54 |  |  | (255 | ) |  | 24.04 |  |  | (1,441 | ) |  | 27.52 |
Canceled | (126 | ) |  | 32.10 |  |  | (221 | ) |  | 35.23 |  |  | (762 | ) |  | 32.48 |
Balance, ending | 6,120 |  |  | $ | 27.60 |  |  | 8,514 |  |  | $ | 26.36 |  |  | 8,025 |  |  | $ | 25.75 |
Options exercisable, at October 31, | 4,266 |  |  | $ | 25.42 |  |  | 6,407 |  |  | $ | 24.14 |  |  | 6,098 |  |  | $ | 23.67 |
The weighted average remaining contractual life (in years) for options outstanding and exercisable at October 31, 2017, was 5.3 and 4.2, respectively. The intrinsic value of options outstanding and exercisable is the difference between the fair market value of our common stock on the applicable date (“Measurement Value”) and the exercise price of those options that had an exercise price that was less than the Measurement Value. The intrinsic value of options exercised is the difference between the fair market value of our common stock on the date of exercise and the exercise price. The following table provides information pertaining to the intrinsic value of options outstanding and exercisable at October 31, 2017, 2016, and 2015 (amounts in thousands):
| 2017 |  | 2016 |  | 2015
Intrinsic value of options outstanding | $ | 112,886 |  |  | $ | 31,852 |  |  | $ | 82,058 |
Intrinsic value of options exercisable | $ | 87,978 |  |  | $ | 31,852 |  |  | $ | 75,034 |
Information pertaining to the intrinsic value of options exercised and the fair market value of options that became vested or modified in each of the fiscal years ended October 31, 2017, 2016, and 2015, is provided below (amounts in thousands):
| 2017 |  | 2016 |  | 2015
Intrinsic value of options exercised | $ | 32,951 |  |  | $ | 2,337 |  |  | $ | 12,923 |
Fair market value of options vested | $ | 10,897 |  |  | $ | 9,690 |  |  | $ | 9,183 |
Our stock option plans permit optionees to exercise stock options using a “net exercise” method at the discretion of the Executive Compensation Committee of the Board of Directors (“Executive Compensation Committee”). In a net exercise, we withhold from the total number of shares that otherwise would be issued to an optionee upon exercise of the stock option that number of shares having a fair market value at the time of exercise equal to the option exercise price and applicable minimum income tax withholdings and remit the remaining shares to the optionee. The following table provides information regarding the use of the net exercise method for fiscal 2017, 2016, and 2015:
| 2017 |  | 2016 |  | 2015
Options exercised | 15,000 |  |  | 5,000 |  |  | 30,000 |
Shares withheld | 14,472 |  |  | 3,547 |  |  | 29,917 |
Shares issued | 528 |  |  | 1,453 |  |  | 83 |
Average fair market value per share withheld | $ | 32.98 |  |  | $ | 32.85 |  |  | $ | 32.64 |
Aggregate fair market value of shares withheld (in thousands) | $ | 477 |  |  | $ | 117 |  |  | $ | 976 |
Performance-Based Restricted Stock Units: In fiscal 2017, 2016, and 2015, the Executive Compensation Committee approved awards of performance-based restricted stock units (“Performance-Based RSUs”) relating to shares of our common stock to certain members of our senior management. The Performance-Based RSUs are based on the attainment of certain performance metrics by the Company in the year of grant. 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 metrics as compared to the target performance metrics. The Performance-Based RSUs vest over a four-year period provided the recipients continue to be employed by us or serve on our Board of Directors (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 our common stock to be issued multiplied by the closing price of our common stock on the New York Stock Exchange (“NYSE”) on the date the Performance-Based RSU awards were approved by the Executive Compensation Committee (“Valuation Date”). We evaluate the performance goals quarterly and estimate the number of shares underlying the Performance-Based RSUs that are probable of being issued. The following table provides information regarding the issuance, valuation assumptions, and amortization of the Performance-Based RSUs issued in fiscal 2017, 2016, and 2015:
| 2017 |  | 2016 |  | 2015
Number of shares underlying Performance-Based RSUs to be issued | 168,417 |  |  | 182,854 |  |  | 300,042 |
Aggregate number of Performance-Based RSUs outstanding at October 31 | 940,117 |  |  | 1,074,222 |  |  | 1,261,545 |
Closing price of our common stock on Valuation Date | $ | 31.61 |  |  | $ | 32.85 |  |  | $ | 32.49 |
Aggregate fair value of Performance-Based RSUs issued (in thousands) | $ | 5,324 |  |  | $ | 6,007 |  |  | $ | 10,155 |
Performance-Based RSU expense recognized (in thousands) | $ | 7,031 |  |  | $ | 8,301 |  |  | $ | 9,863 |
Unamortized value of Performance-Based RSUs at October 31 (in thousands) | $ | 4,599 |  |  | $ | 6,556 |  |  | $ | 8,850 |
Performance-Based RSUs issued in December 2011 and 2012 were paid in fiscal 2016 and 2017, respectively. The recipients of these Performance-Based RSUs elected to use a portion of the shares underlying the Performance-Based RSUs to pay the required income withholding taxes on the payout. In fiscal 2017, the gross value of the payout was $9.6 million (302,514 shares), the minimum income tax withholding was $4.2 million (133,098 shares) and the net value of the shares delivered was $5.4 million (169,416 shares). In fiscal 2016, the gross value of the payout was $12.2 million (370,171 shares), the minimum income tax withholding was $5.4 million (164,090 shares) and the net value of the shares delivered was $6.8 million (206,081 shares). Total Shareholder Return Restricted Stock Units: In fiscal 2017 and 2016, the Executive Compensation Committee approved awards of total shareholder return restricted stock units (“TSR RSUs”) relating to 46,361 and 171,705 shares, respectively, of our common stock to certain members of our senior management. The TSR RSUs granted are earned by comparing our total shareholder return during specified performance periods to the respective total shareholder returns of companies in a performance peer group as defined in the award document. The specified performance periods are as follows:
|  | Performance Period |  | Initial Number of TSR RSUs issued
Fiscal 2017 |  | November 1, 2016 to October 31, 2019 |  | 46,361 |
Fiscal 2016 |  |  |  |
Tranche 1 |  | November 1, 2015 to October 31, 2016 |  | 61,796 |
Tranche 2 |  | November 1, 2015 to October 31, 2017 |  | 57,230 |
Tranche 3 |  | November 1, 2015 to October 31, 2018 |  | 52,679 |
The TSR RSUs vest over a three-year period provided the recipients continue to be employed by us or serve on our Board of Directors (as applicable) as specified in the award document. Based upon our ranking in the performance peer group, the recipient of the TSR RSUs may earn a total award ranging from 0% to 200% of the initial number of TSR RSUs granted. In fiscal 2017, recipients of Tranche 2 TSR RSUs earned 83.05% of the grants based upon our total shareholder return ranking in the performance peer group during the two-year period ended October 31, 2017. In fiscal 2016, recipients of Tranche 1 TSR RSUs earned 0% of the grants based upon our total shareholder return ranking in the performance peer group during the one-year period ended October 31, 2016. We estimated the fair value of the TSR RSUs at the grant date using a Monte Carlo simulation. The following table summarizes the assumptions used in the Monte Carlo simulation and the fair value per share of the TSR RSUs granted in in each of the fiscal years ended October 31, 2017 and 2016:
| 2017 |  | 2016
Weighted-average volatility | 26.91% |  | 28.66%
Risk-free interest rate | 1.52% |  | 1.23%
Dividends | none |  | none
Weighted-average fair value per share of options granted | $39.21 |  | $41.16
The length of each performance period was used as the expected term in the simulation for each respective tranche. In fiscal 2017 and 2016, we recognized $3.4 million and $3.3 million, respectively, of expense related to TSR RSUs. At October 31, 2017 and 2016, the unamortized value of the TSR RSUs was $2.2 million and $3.8 million, respectively. Nonperformance-Based Restricted Stock Units: In fiscal 2017, 2016, and 2015, we issued nonperformance-based restricted stock units (“RSUs”) to various officers, employees, and nonemployee directors. These RSUs generally vest in annual installments over a two- to four-year period. The value of the RSUs was determined to be equal to the number of shares of our common stock to be issued pursuant to the RSUs multiplied by the closing price of our common stock on the NYSE on the date the RSUs were awarded. The following table provides information regarding these RSUs for fiscal 2017, 2016, and 2015:
| 2017 |  | 2016 |  | 2015
Nonperformance-Based RSUs issued: |  |  |  |  |
Number of RSUs issued | 377,564 |  |  | 139,684 |  |  | 124,568 |
Weighted average closing price of our common stock on date of issuance | $ | 31.61 |  |  | $ | 32.85 |  |  | $ | 32.74 |
Aggregate fair value of RSUs issued (in thousands) | $ | 11,935 |  |  | $ | 4,589 |  |  | $ | 4,078 |
Nonperformance-Based RSU expense recognized (in thousands): | $ | 7,572 |  |  | $ | 3,958 |  |  | $ | 3,317 |
| 2017 |  | 2016 |  | 2015
At October 31: |  |  |  |  |
Aggregate Nonperformance-Based RSUs outstanding | 673,224 |  |  | 396,716 |  |  | 380,548 |
Cumulative unamortized value of Nonperformance-Based RSUs (in thousands) | $ | 6,783 |  |  | $ | 2,956 |  |  | $ | 2,542 |
Our stock incentive plans permit us to withhold from the total number of shares that otherwise would be issued to a restricted stock unit recipient upon distribution that number of shares having a fair value at the time of distribution equal to the applicable income tax withholdings due and remit the remaining shares to the restricted stock unit recipient. The following table provides information regarding the number of shares withheld, the income tax withholding due, and the remaining shares issued to the recipients for fiscal 2017, 2016, and 2015:
| 2017 |  | 2016 |  | 2015
Number of shares withheld | 20,400 |  |  | 25,340 |  |  | 4,221 |
Income tax withholdings due | $ | 664,300 |  |  | $ | 827,800 |  |  | $ | 146,500 |
Remaining shares issued to the recipients | 52,757 |  |  | 70,627 |  |  | 10,049 |
Employee Stock Purchase Plan Our employee stock purchase plan enables substantially all employees to purchase our common stock at 95% of the market price of the stock on specified offering dates without restriction or at 85% of the market price of the stock on specified offering dates subject to restrictions. The plan, which terminates in December 2027, provides that 500,000 shares be reserved for purchase. At October 31, 2017, 484,000 shares were available for issuance. The following table provides information regarding our employee stock purchase plan for fiscal 2017, 2016, and 2015:
| 2017 |  | 2016 |  | 2015
Shares issued | 33,314 |  |  | 36,778 |  |  | 26,674 |
Average price per share | $ | 32.25 |  |  | $ | 25.97 |  |  | $ | 31.65 |
Compensation expense recognized (in thousands) | $ | 147 |  |  | $ | 129 |  |  | $ | 113 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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