15.

Stock Plans

The fair value of option awards is established at the date of grant using a Black Scholes option pricing model with the following weighted average assumptions for the years ended

October 31,

2016,

2015

and

2014:

risk free interest rate

of 1.38%,

2.03%

and

2.60%,

respectively; dividend yield of

zero;

historical volatility factor of the expected market price of our common stock

of 0.61,

0.58

and

0.70,

respectively; a weighted average expected life of the option of

7.36

years,

7.22

years and

7.42

years, respectively; and an estimated forfeiture rate of

10.90%,

8.84%

and

14.59%,

respectively.

For the years ended

October 31, 2016,

2015

and

2014,

total stock based compensation expense was

$2.9

million

($2.3

million post tax),

$8.8

million

($6.5

million post tax) and

$10.3

million (pre and post tax), respectively. Included in this total stock based compensation expense was

income from stock options of

$1.5

million for year ended

October 31, 2016

and expense for stock options of

$2.2

million and

$3.9

million for the years ended

October 31,

2015

and

2014, respectively. The

fiscal

2016

expense includes income of

$2.1

million from previously recognized expense of certain performance based stock option grants for which the performance metrics are no longer expected to be satisfied. This income was slightly offset by the vesting of stock options of

$0.5

million

during the year ended

October 31, 2016.

We have a stock incentive plan for certain officers and key employees and directors. Options are granted by a committee appointed by the Board of Directors or its delegate in accordance with the stock incentive plan. The exercise price of all stock options must be at least equal to the fair market value of the underlying shares on the date of the grant. Stock options granted to officers and associates generally vest in

four

equal installments on the

second, third, fourth

and

fifth

anniversaries of the date of the grant. All options expire

years after the date of the grant. During the year ended

October 31,

2016,

each of the

five

non employee directors of the Company were given the choice to receive stock options or a reduced number of shares of restricted stock units subject to a

two

year post vesting holding period,

or a combination thereof, with restricted stock units based on the fair market value on the date of grant and stock options based on grant date Black Scholes value. Four such directors elected to receive restricted stock units and

one

elected to received

50%

stock options and

50%

restricted stock units. Non employee directors’ stock options and restricted stock units vest in

three

equal installments on the

first, second

and

third

anniversaries of the date of the grant. Stock option transactions are summarized as follows:

	October 31, 2016	Weighted-Average Exercise Price	October 31, 2015	Weighted-Average Exercise Price	October 31, 2014	Weighted-Average Exercise Price
Options outstanding at beginning of period	6,393,876	$4.78	6,720,251	$5.23	6,591,054	$5.74
Granted	1,148,481	$1.95	173,750	$2.47	376,822	$4.41
Exercised	-	$-	18,125	$2.48	42,375	$2.74
Forfeited	51,125	$2.73	203,436	$3.78	56,375	$2.66
Expired	117,281	$25.05	278,564	$15.04	148,875	$27.42
Options outstanding at end of period	7,373,951	$4.03	6,393,876	$4.78	6,720,251	$5.23
Options exercisable at end of period	5,071,181		4,566,290		4,100,413

The total intrinsic value of options exercised during fiscal

2015

and

2014

was

$15

thousand and

$105

thousand, respectively. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. At

October 31, 2016,

there were no options exercisable which had an intrinsic value. Exercise prices for options outstanding at

October 31,

2016

ranged from

$1.54

$23.91.

The weighted average fair value of grants made in fiscal

2016,

2015

and

2014

was

$1.00,

$1.47

and

$3.06

per share, respectively. Based on the fair value at the time they were granted, the weighted average fair value of options vested in fiscal

2016,

2015

and

2014

was

$2.55,

$2.78

and

$2.09

per share, respectively.

The following table summarizes the exercise price range and related number of options outstanding at

October 31,

2016:

			Number	Weighted- Average	Weighted- Average Remaining Contractual
Range of Exercise Prices			Outstanding	Exercise Price	Life
$1.54	–	$5.00	5,595,326	$2.81	5.35
$5.01	–	$10.00	1,601,750	$6.36	4.30
$10.01	–	$20.00	-	$-	-
$20.01	–	$30.00	176,875	$21.68	0.58
			7,373,951	$4.03	5.00

The following table summarizes the exercise price range and related number of exercisable options at

October 31,

2016:

			Number	Weighted- Average	Weighted- Average Remaining Contractual
Range of Exercise Prices			Exercisable	Exercise Price	Life
$1.54	–	$5.00	3,915,056	$3.00	3.89
$5.01	–	$10.00	979,250	$6.42	2.82
$10.01	–	$20.00	-	$-	-
$20.01	–	$30.00	176,875	$21.68	0.58
			5,071,181	$4.31	3.57

Officers and key associates who are eligible to receive equity grants

may

elect to receive either a stated number of stock options, or a reduced number of shares of restricted stock units, or a combination thereof. Shares underlying restricted stock units granted to officers and associates generally vest in

four

equal installments on the

second, third, fourth

and

fifth

anniversaries of the grant date. Participants aged

years or older, or aged

with

15 years

of service, are eligible to vest in their equity awards on an accelerated basis on their retirement (which in the case of the restricted stock units only applies to a retirement that is at least

one

year after the date of grant). During the years ended

October 31,

2016,

2015

and

2014,

we granted

456,070

(including

356,382

units to certain of our non employee directors),

1,018,558

(including

155,433

units to certain of our non employee directors) and

168,161

(including

85,035

units to certain of our non employee directors) restricted stock units, respectively, and also issued

176,944,

97,854

and

67,804

units, relating to awards granted in prior fiscal years, respectively. During the years ended

October 31,

2016,

2015

and

2014,

33,125,

5,811

and

12,000

restricted stock units were forfeited, respectively.

For the years ended

October 31,

2016,

2015

and

2014

total compensation cost recognized in the Consolidated Statement of Operations for the annual restricted stock unit grants, market share unit grants (discussed below), and the stock portion of the long term incentive plan (also discussed below) was

$4.3

million,

$6.5

million and

$6.2

million, respectively. In addition to nonvested share awards summarized in the following table, there were

224,326,

538,892

and

534,143

vested share awards at

October 31, 2016,

2015

and

2014,

respectively, which were deferred at the participants' election.

A summary of the Company’s nonvested share awards as of and for the year ended

October 31,

2016,

is as follows:

	Shares	Weighted-Average Grant Date Fair Value
Nonvested at beginning of period	3,600,769	$4.16
Granted	4,031,124	$1.67
Vested	259,299	$3.19
Forfeited	133,125	$4.62
Nonvested at end of period	7,239,469	$2.80

Included in the above table are awards for the share portion of long

term incentive plans (“LTIPs”) for certain officers and associates, which are performance based plans. This includes

2.8

million target

2016

LTIP shares which were granted during fiscal

2016.

The awards included above for these plans are based on our best estimate of the outcome for the performance criteria. At

October 31, 2015,

the final measurement period was reached for the Company’s

2013

LTIP and the value of the

2013

LTIP award was remeasured, resulting in a reduction of compensation expense during the period.

Also included in the table above are

2.3

million target Market Share Units (“MSUs”) of which

780,000

and

800,000

were granted to certain officers in fiscal

2016

and fiscal

2015,

respectively. In addition,

700,00

MSUs are included from the fiscal

2014

MSU Grant, which were adjusted from

800,000

in fiscal

2016,

as the stock price performance conditions at the

first

measurement period were not met. Fifty percent of the MSUs will vest in

four

equal annual installments, commencing on the

second

anniversary of the grant date subject to stock price performance conditions, pursuant to which the actual number of shares issuable with respect to vested MSUs

may

range from

175%

of the target number of shares covered by the MSU awards, generally depending on the growth in the

day average trading price of the Company’s shares during the period between the grant date and the relevant vesting dates. The remaining

fifty

percent of the MSUs are also subject to financial performance conditions in addition to the stock price performance conditions applicable to all MSUs. These additional performance based MSUs vest in

four

equal installments with the

first

installment vesting on

January 1

three

years after the MSU grant date (for example,

January 1, 2019

for the

2016

MSU Grant) and the remaining annual installments commencing on the

third

anniversary of the Grant date, except that no portion of the award will vest unless the Committee determines that the Company achieved

(1)

for the

2016

MSU grants, specified gross margin improvement (as to

25%

of the MSU amount) and debt reduction (as to

25%

of the MSU amount) goals comparing the fiscal year of the grant date and the

second

fiscal year following the grant date (fiscal

2018

compared to fiscal

2016)

and

(2)

for the

2015

and

2014

MSU grants, specified total revenue growth goals comparing the fiscal year of the grant date and the

second

fiscal year following the grant date (for example, fiscal

2017

compared to fiscal

2015

for the

2015

MSU Grant).

The fair value of the MSU grants is determined using the Monte Carlo simulation model, which simulates a range of possible future stock prices and estimates the probabilities of the potential payouts. This model uses the average closing trading price of the Company’s Class A Common Stock on the New York Stock Exchange over the

calendar day period ending on the grant date. This model also incorporates the following ranges of assumptions:

The expected volatility is based on our stock’s historical volatility commensurate with the life 2 years, 2.5 years, 3 years, 4 years and 5 years

The risk

free interest rate is based on the U.S. Treasury rate assumption ranging from 2 5 years.

The expected dividend yield is not applicable since we do not currently pay dividends.

The following assumptions were used for fiscal

2016

MSU Grants: historical volatility factors of the expected market price of our common stock

of 56.50%,

52.77%,

50.34%,

52.36%

and

61.08%

for the

year,

2.5

year,

year and

year vesting tranches, respectively; risk

free interest rates

of 0.73%,

0.81%,

0.87%,

1.02%

and

1.17%

for each vesting tranche, respectively; and dividend yield of

zero

for all time periods. The following assumptions were used for

2015

MSU Grants: historical volatility factor of the expected market price of our common stock

of 38.28%,

42.01%,

45.73%,

59.08%

and

57.77%

for the

year,

2.5

year,

year and

year vesting tranches, respectively; risk free interest rates

of 0.74%,

0.95%,

1.12%,

1.44%

and

1.75%

for each vesting tranche, respectively; and dividend yield of

zero

for all time periods. The following assumptions were used for

October 31,

2014

MSU Grants: historical volatility factor of the expected market price of our common stock

of 47.52%,

58.07%,

63.79%,

61.12%

and

64.67%

for the

year,

2.5

year,

year and

year, respectively; risk free interest rates

of 0.45%,

0.71%,

0.93%,

1.32%

and

1.70%

for the

years, respectively; and dividend yield of

zero.

As of

October 31,

2016,

we had

7.4

million shares authorized for future issuance under our equity compensation plans. In addition, as of

October 31,

2016,

there were

$7.1

million of total unrecognized compensation costs related to nonvested share based compensation arrangements. That cost is expected to be recognized over a weighted average period of

1.66

years.