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EQUITY INCENTIVE PLAN
 9 Months Ended
Jul. 31, 2011
EQUITY INCENTIVE PLAN
3.
EQUITY INCENTIVE PLAN

In March 2008, we adopted the Hurco Companies, Inc. 2008 Equity Incentive Plan (the “2008 Plan”), which allows us to grant awards of stock options, Stock Appreciation Rights settled in stock (SARs), restricted shares, performance shares and performance units.  The 2008 Plan replaced the 1997 Stock Option and Incentive Plan (the “1997 Plan”) which expired in March 2007.  The Compensation Committee of the Board of Directors has authority to determine the officers, directors and key employees who will be granted awards; designate the number of shares subject to each award; determine the terms and conditions upon which awards will be granted; and prescribe the form and terms of award agreements.  We have granted stock options under both plans which are currently outstanding and restricted shares under the 2008 Plan.  No stock option may be exercised more than ten years after the date of grant or such shorter period as the Compensation Committee may determine at the date of grant.  The total number of shares of our common stock that may be issued as awards under the 2008 Plan is 750,000.  The market value of a share of our common stock, for purposes of the 2008 Plan, is the closing sale price as reported by the Nasdaq Global Select Market on the date in question or, if not a trading day, on the last preceding trading date.

A summary of stock option activity for the nine-month period ended July 31, 2011, is as follows:

   
Stock 
Options
    
Weighted
Average 
Exercise
Price
  
             
Outstanding at October 31, 2010
     115,369     $ 20.66  
                 
Options granted
     —       —  
Options exercised
     —       —  
Options cancelled
     —       —  
                 
Outstanding at July 31, 2011
     115,369     $ 20.66  

Summarized information about outstanding stock options as of July 31, 2011, that have already vested and those that are expected to vest, as well as stock options that are currently exercisable, are as follows:

   
Options already
vested and expected
to vest
    
Options currently
exercisable
  
              
Number of outstanding options
     115,369       68,036  
                 
Weighted average remaining contractual life (years)
     7.26       4.61  
Weighted average exercise price per share
   $ 20.66     $ 24.05  
                 
Intrinsic value of outstanding options
   $ 1,075,000     $ 429,000  
 
The intrinsic value of an outstanding stock option is calculated as the difference between the stock price as of July 31, 2011 and the exercise price of the option.

On December 22, 2010, the Compensation Committee granted a total of 25,000 shares of restricted stock to our executive officers.  The restricted stock vests in full three years from the date of grant provided the recipient remains employed by us through that date.  The grant date fair value of the restricted stock is based on the closing sales price of our common stock on the grant date which was $23.10 per share.

On March 17, 2011, the Compensation Committee granted a total of 5,859 shares of restricted stock to our board of directors.  The restricted stock vests one year from the date of grant provided the recipient remains on the board of directors through that date.  The grant date fair value of the restricted stock is based on the closing sales price of our common stock on the grant date which was $29.86 per share.

 
A reconciliation of the Company’s restricted stock activity and related information is as follows:
 
   
Number of
Shares
    
Weighted Average
Grant  Date
Fair Value
  
Unvested at October 31, 2010
     —     $ —  
Shares granted
     30,859       24.38  
Shares vested
     —       —  
Shares cancelled
     —       —  
                   
Unvested at July 31, 2011
     30,859     $ 24.38  

During the first nine months of fiscal 2011 and 2010, we recorded $332,000 and $95,000, respectively, of stock-based compensation expense related to grants of stock options and shares of restricted stock under the plans.  As of July 31, 2011, there was $888,000 of total unrecognized stock-based compensation cost that we expect to recognize by the end of fiscal 2014.