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EQUITY INCENTIVE PLAN | 6 Months Ended
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Apr. 30, 2014
EQUITY INCENTIVE PLAN [Abstract] |
EQUITY INCENTIVE PLAN |
| 3. | EQUITY INCENTIVE PLAN
In March 2008, we adopted the Hurco Companies, Inc. 2008 Equity Incentive Plan, or 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, 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 which are outstanding. 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 six-month period ended April 30, 2014, is as follows:
|  |  |  |  | Weighted Average |
|  | Stock |  |  | Exercise |
|  | Options |  |  | Price |
Outstanding at October 31, 2013 |  |  | 168,712 |  |  | $ | 20.73 |
Options granted |  |  | - |  |  |  | - |
Options exercised |  |  | (16,306 | ) |  |  | (18.35 | )
Options cancelled |  |  | (20,217 | ) |  |  | (25.59 | )
Outstanding at April 30, 2014 |  |  | 132,189 |  |  | $ | 20.28 |
Summarized information about outstanding stock options as of April 30, 2014, 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 |  |  | Options currently |
|  | and expected to vest |  |  | exercisable |
Number of outstanding options |  |  | 132,189 |  |  |  | 105,677 |
Weighted average remaining contractual life (years) |  |  | 6.44 |  |  |  | 5.03 |
Weighted average exercise price per share |  | $ | 20.28 |  |  | $ | 19.74 |
Intrinsic value of outstanding options |  | $ | 935,000 |  |  | $ | 823,000 |
The intrinsic value of an outstanding stock option is calculated as the difference between the stock price as of April 30, 2014 and the exercise price of the option. On January 10, 2014, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of restricted shares and performance shares awarded under the 2008 Plan. The awards were 25% time-based vesting and 75% performance-based vesting. The three-year performance period is fiscal 2014 through fiscal 2016. The Compensation Committee granted a total 12,182 shares of time-based restricted shares to our executive officers. The restricted shares vest in thirds over three years from the date of grant provided the recipient remains employed through that date. The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant. The Compensation Committee also granted a total of 16,948 performance shares to our executive officers designated as "Performance Shares -TSR". The shares were weighted as 40% of the overall long-term incentive compensation arrangement and will vest based upon the total shareholder return of our common stock over a three-year period, relative to the total shareholder return of the companies in a specified peer group over that period. Participants will have the ability to earn between 50% of the target number of shares for achieving threshold performance and 200% of the target number of shares for achieving maximum performance. The fair value of the market-based performance shares was calculated using the Monte Carlo approach. The Compensation Committee also granted a total of 17,056 performance shares to our executive officers designated as "Performance Shares -ROIC". These shares were weighted as 35% of the overall long-term incentive compensation arrangement and will vest based upon the achievement of pre-established goals related to our average return on invested capital over the three-year period. Participants will have the ability to earn between 50% of the target number of shares for achieving threshold performance and 200% of the target number of shares for achieving maximum performance. The grant date fair value of the ROIC performance shares was based on the closing sales price of our common stock on the grant date. On March 13, 2014, the Compensation Committee granted a total of 11,235 shares of restricted stock to our non-employee directors. The restricted stock vests in full 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 was based on the closing sales price of our common stock on the grant date which was $24.92 per share. A reconciliation of the activity relating to outstanding share awards made under the 2008 Plan and related information is as follows:
|  | Number of |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Unvested at October 31, 2013 |  |  | 68,456 |  |  |  | 23.01 |
Shares granted |  |  | 57,421 |  |  |  | 24.90 |
Shares vested |  |  | (23,520 | ) |  |  | (24.42 | )
Shares cancelled |  |  | (13,609 | ) |  |  | (23.64 | )
Shares withheld |  |  | (7,710 | ) |  |  | (23.10 | )
Unvested at April 30, 2014 |  |  | 81,038 |  |  |  | 23.83 |
During the first six months of fiscal 2014 and 2013, we recorded $511,000 and $503,000, respectively, as stock-based compensation expense attributable to stock option and share awards. As of April 30, 2014, there was an estimated $1.5 million of total unrecognized stock-based compensation expense that we expect to recognize by the end of the first quarter of fiscal 2017.

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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 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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