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Stock-Based Compensation | 9 Months Ended
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Jul. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock-Based Compensation |
10. | Stock-based compensation
During the 2013 Annual Meeting of Shareholders, our shareholders approved the 2012 Stock Incentive and Award Plan (the “2012 Plan”). The 2012 Plan provides for the granting of stock options, stock appreciation rights, restricted shares, performance shares, stock purchase rights, stock equivalent units, cash awards and other stock or performance-based incentives. A maximum of 2,900 common shares is available for grant under the Plan. Stock Options Nonqualified or incentive stock options may be granted to our employees and directors. Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25 percent per year and expire 10 years from the date of grant. Vesting accelerates upon the occurrence of events that involve or may result in a change of control. For grants made prior to November 2012, vesting ceases upon retirement, death and disability, and unvested shares are forfeited. For grants made during and after November 2012, in the event of termination of employment due to early retirement or normal retirement at age 65, options granted within 12 months prior to termination are forfeited, and vesting continues post retirement for all other unvested options granted. In the event of disability or death, all unvested stock options fully vest. Termination for any other reason results in forfeiture of unvested options and vested options in certain circumstances. The amortized cost of options is accelerated if the retirement eligibility date occurs before the normal vesting date. Option exercises are satisfied through the issuance of treasury shares on a first-in, first-out basis. We recognized compensation expense related to stock options of $2,390 and $1,927 in the three months ended July 31, 2017 and 2016, respectively. Corresponding amounts for the nine months ended July 31, 2017 and 2016 were $7,024 and $5,940, respectively. The following table summarizes activity related to stock options for the nine months ended July 31, 2017:
|  | Number of Options |  |  | Weighted-Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value |  |  | Weighted Average Remaining Term
Outstanding at October 31, 2016 |  |  | 1,881 |  |  | $ | 58.41 |  |  |  |  |  |  |
Granted |  |  | 381 |  |  | $ | 107.68 |  |  |  |  |  |  |
Exercised |  |  | (298 | ) |  | $ | 44.84 |  |  |  |  |  |  |
Forfeited or expired |  |  | (14 | ) |  | $ | 79.10 |  |  |  |  |  |  |
Outstanding at July 31, 2017 |  |  | 1,950 |  |  | $ | 69.98 |  |  | $ | 111,202 |  |  | 6.6 years
Vested or expected to vest at July 31, 2017 |  |  | 1,928 |  |  | $ | 69.69 |  |  | $ | 110,506 |  |  | 6.6 years
Exercisable at July 31, 2017 |  |  | 1,016 |  |  | $ | 54.16 |  |  | $ | 74,008 |  |  | 5.0 years
As of July 31, 2017, there was $9,107 of total unrecognized compensation cost related to unvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.5 years. The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Nine months ended |  | July 31, 2017 |  | July 31, 2016 |
Expected volatility |  | 26.0%-29.2% |  | 29.1%-30.4% |
Expected dividend yield |  | 0.91%-1.17% |  |  | 1.54% |
Risk-free interest rate |  | 1.89%-2.06% |  | 1.78%-1.90% |
Expected life of the option (in years) |  | 5.4-6.2 |  | 5.4-6.2 |
The weighted-average expected volatility used to value the 2017 and 2016 options was 29.1%, and 29.6%, respectively. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued. The weighted average grant date fair value of stock options granted during the nine months ended July 31, 2017 and 2016 was $28.86 and $18.23, respectively. The total intrinsic value of options exercised during the three months ended July 31, 2017 and 2016 was $1,824 and $6,928, respectively. The total intrinsic value of options exercised during the nine months ended July 31, 2017 and 2016 was $21,081 and $10,247, respectively. Cash received from the exercise of stock options for the nine months ended July 31, 2017 and 2016 was $13,209 and $7,866, respectively. The tax benefit realized from tax deductions from exercises for the nine months ended July 31, 2017 and 2016 was $5,600 and $2,795, respectively. Restricted Shares and Restricted Share Units We may grant restricted shares and/or restricted share units to our employees and directors. These shares or units may not be transferred for a designated period of time (generally one to three years) defined at the date of grant. For employee recipients, in the event of termination of employment due to early retirement, restricted shares granted within 12 months prior to termination are forfeited, and other restricted shares vest on a pro-rata basis. In the event of termination of employment due to normal retirement at age 65, restricted shares granted within 12 months prior to termination are forfeited, and, for other restricted shares, the restriction period will lapse and the shares will vest and be transferable. Restrictions lapse in the event of a recipient’s disability or death. Termination for any other reason prior to the lapse of any restrictions results in forfeiture of the shares. For non-employee directors, all restrictions lapse in the event of disability or death of the non-employee director. Termination of service as a director for any other reason within one year of date of grant results in a pro-rata vesting of shares or units. As shares or units are issued, deferred stock-based compensation equivalent to the fair value on the date of grant is expensed over the vesting period. Tax benefits arising from the lapse of restrictions are recognized when realized and credited to capital in excess of stated value. The following table summarizes activity related to restricted shares during the nine months ended July 31, 2017:
|  | Number of Shares |  |  | Weighted-Average Grant Date Fair Value |
Restricted shares at October 31, 2016 |  |  | 60 |  |  | $ | 73.56 |
Granted |  |  | 24 |  |  | $ | 108.88 |
Forfeited |  |  | (2 | ) |  | $ | 71.42 |
Vested |  |  | (24 | ) |  | $ | 73.53 |
Restricted shares at July 31, 2017 |  |  | 58 |  |  | $ | 88.58 |
As of July 31, 2017, there was $3,043 of unrecognized compensation cost related to restricted shares. The cost is expected to be amortized over a weighted average period of 1.9 years. The amount charged to expense related to restricted shares during the three months ended July 31, 2017 and 2016 was $551 and $484, respectively. These amounts included common share dividends for the three months ended July 31, 2017 and 2016 of $15 and $14, respectively. For the nine months ended July 31, 2017 and 2016, the amounts charged to expense related to restricted shares were $1,639 and $1,477, respectively. These amounts included common share dividends for the nine months ended July 31, 2017 and 2016 of $46 and $44, respectively. The following table summarizes activity related to restricted share units during the nine months ended July 31, 2017:
|  | Number of Units |  |  | Weighted-Average Grant Date Fair Value |
Restricted share units at October 31, 2016 |  |  | 0 |  |  | $ | — |
Granted |  |  | 10 |  |  | $ | 97.43 |
Restricted share units at July 31, 2017 |  |  | 10 |  |  | $ | 97.43 |
As of July 31, 2017, there was $250 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 0.3 years. The amount charged to expense related to restricted share units during the three months ended July 31, 2017 and 2016 was $252 and $243, respectively. For the nine months ended July 31, 2017 and 2016, the corresponding amounts were $758 and $730, respectively. Deferred Directors’ Compensation Non-employee directors may defer all or part of their cash and equity-based compensation until retirement. Cash compensation may be deferred as cash or as share equivalent units. Deferred cash amounts are recorded as liabilities, and share equivalent units are recorded as equity. Additional share equivalent units are earned when common share dividends are declared. The following table summarizes activity related to director deferred compensation share equivalent units during the nine months ended July 31, 2017:
|  | Number of Shares |  |  | Weighted-Average Grant Date Fair Value |
Outstanding at October 31, 2016 |  |  | 99 |  |  | $ | 41.72 |
Dividend equivalents |  |  | 1 |  |  | $ | 118.09 |
Distributions |  |  | (5 | ) |  | $ | 26.89 |
Outstanding at July 31, 2017 |  |  | 95 |  |  | $ | 43.09 |
The amount charged to expense related to director deferred compensation for the three months ended July 31, 2017 and 2016 was $25 and $39, respectively. For the nine months ended July 31, 2017 and 2016, the corresponding amounts were $77 and $118, respectively. Performance Share Incentive Awards Executive officers and selected other key employees are eligible to receive common share-based incentive awards. Payouts, in the form of unrestricted common shares, vary based on the degree to which corporate financial performance exceeds predetermined threshold, target and maximum performance goals over three-year performance periods. No payout will occur unless threshold performance is achieved. The amount of compensation expense is based upon current performance projections for each three-year period and the percentage of the requisite service that has been rendered. The calculations are also based upon the grant date fair value determined using the closing market price of our common shares at the grant date, reduced by the implied value of dividends not to be paid. The per share values were $103.75 and $104.49 for 2017, $67.69 per share for 2016 and $76.48 per share for 2015. During the three months ended July 31, 2017 and 2016, $1,813 and $1,461 was charged to expense, respectively. For the nine months ended July 31, 2017 and 2016, the corresponding amounts were $5,243 and $5,386, respectively. The cumulative amount recorded in shareholders’ equity at July 31, 2017 was $10,664. Deferred Compensation Our executive officers and other highly compensated employees may elect to defer up to 100% of their base pay and cash incentive compensation and, for executive officers, up to 90% of their share-based performance incentive payout each year. Additional share units are credited for quarterly dividends paid on our common shares. Expense related to dividends paid under this plan for the three months ended July 31, 2017 and 2016 was $68 and $54, respectively. For the nine months ended July 31, 2017 and 2016, the corresponding amounts were $197 and $158, respectively.

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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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