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STOCK-BASED COMPENSATION | 12 Months Ended
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Oct. 31, 2014
STOCK-BASED COMPENSATION [Abstract] |
STOCK-BASED COMPENSATION | 9. STOCK-BASED COMPENSATION 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, 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 and performance 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. During fiscal 2014, 2013 and 2012, we recorded approximately $921,000, $979,000 and $870,000, respectively, of stock-based compensation expense related to grants under the plans. As of October 31, 2014, there was an estimated $996,000 of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal 2017. During fiscal 2014, options to purchase 20,306 shares were exercised, resulting in cash proceeds of approximately $359,000. 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. 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 which was $24.01 per share. The Compensation Committee also granted a total target number 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 and be paid 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 $26.43 per share and was calculated using the Monte Carlo approach. The Compensation Committee also granted a total target number 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 and be paid 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 which was $24.01 per share. During fiscal 2013, options to purchase 11,369 shares were exercised, resulting in cash proceeds of approximately $303,000. On March 14, 2013, the Compensation Committee granted a total of 6,230 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 is based on the closing sales price of our common stock on the grant date which was $28.08 per share. On December 12, 2012, the Compensation Committee granted a total of 24,976 stock options under the 2008 Plan to our executive officers. The fair value of the options was estimated on the date of grant using a Black-Scholes valuation model with assumptions for expected volatility based on the historical volatility of our common stock of 62%, expected term of the options of five years, dividend yield rate of 0% and a risk-free interest rate of 0.66% based upon the five-year U.S. Treasury yield as of the date of grant. The options vest over a three-year period beginning one year from the date of grant. Based upon the foregoing factors, the grant date fair value of the stock options was determined to be $12.11 per share. On December 12, 2012, the Compensation Committee granted a total of 12,983 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 $23.30 per share. During fiscal 2012, options to purchase 500 shares were exercised, resulting in cash proceeds of approximately $1,000. On March 15, 2012, the Compensation Committee granted a total of 6,475 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 is based on the closing sales price of our common stock on the grant date which was $27.00 per share. On December 14, 2011, the Compensation Committee granted a total of 45,236 stock options under the 2008 Plan to our executive officers. The fair value of the options was estimated on the date of grant using a Black-Scholes valuation model with assumptions for expected volatility based on the historical volatility of our common stock of 64%, expected term of the options of five years, dividend yield rate of 0% and a risk-free interest rate of .86% based upon the five-year U.S. Treasury yield as of the date of grant. The options vest over a three-year period beginning one year from the date of grant. Based upon the foregoing factors, the grant date fair value of the stock options was determined to be $11.50 per share. On December 14, 2011, the Compensation Committee granted a total of 24,243 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 $21.45 per share. A reconciliation of the Company's restricted stock activity and related information is as follows:
|  |  |  |  | Weighted Average |
|  | 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 October 31, 2014 |  |  | 81,038 |  |  | $ | 23.83 |
A summary of the status of the options as of October 31, 2014, 2013 and 2012 and the related activity for the year is as follows:
|  | Shares Under Option |  |  | Weighted Average Exercise Price Per Share |
Balance October 31, 2011 |  |  | 115,369 |  |  | $ | 20.66 |
Granted |  |  | 45,236 |  |  |  | 21.45 |
Cancelled |  |  | (5,000 | ) |  |  | 26.69 |
Expired |  |  | — |  |  |  | — |
Exercised |  |  | (500 | ) |  |  | 2.15 |
Balance October 31, 2012 |  |  | 155,105 |  |  | $ | 20.75 |
Granted |  |  | 24,976 |  |  |  | 23.30 |
Cancelled |  |  | — |  |  |  | — |
Expired |  |  | — |  |  |  | — |
Exercised |  |  | (11,369 | ) |  |  | 26.69 |
Balance October 31, 2013 |  |  | 168,712 |  |  | $ | 20.73 |
Granted |  |  | — |  |  |  | — |
Cancelled |  |  | (20,217 | ) |  |  | 25.59 |
Expired |  |  | — |  |  |  | — |
Exercised |  |  | (20,306 | ) |  |  | 17.67 |
Balance October 31, 2014 |  |  | 128,189 |  |  | $ | 20.45 |
The total intrinsic value of stock options exercised during the twelve months ended October 31, 2014, 2013 and 2012 was approximately $424,000, $0 and $10,000, respectively. As of October 31, 2014, the total intrinsic value of outstanding stock options already vested and expected to vest and the intrinsic value of options that are outstanding and exercisable was $2.3 million. Stock options outstanding and exercisable on October 31, 2014, are as follows:
Range of Exercise Prices Per Share |  |  | Shares Under Option |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Life in Years |
Outstanding |  |  |  |  |  |  |  |  |  |  |  |
$ | 14.82 |  |  |  | 24,000 |  |  | $ | 14.82 |  |  |  | 5.1 |
| 14.88 |  |  |  | 17,000 |  |  |  | 14.88 |  |  |  | 4.5 |
| 18.13 |  |  |  | 16,000 |  |  |  | 18.13 |  |  |  | 5.5 |
| 21.45 |  |  |  | 37,841 |  |  |  | 21.45 |  |  |  | 7.1 |
| 23.30 |  |  |  | 20,848 |  |  |  | 23.30 |  |  |  | 8.1 |
| 26.69 |  |  |  | 2,500 |  |  |  | 26.69 |  |  |  | 2.0 |
| 35.83 |  |  |  | 10,000 |  |  |  | 35.83 |  |  |  | 3.6 |
$ | 14.82 – 35.83 |  |  |  | 128,189 |  |  | $ | 20.45 |  |  |  | 6.0 |
Exercisable |  |  |  |  |  |  |  |  |  |  |  |  |
$ | 14.82 |  |  |  | 24,000 |  |  | $ | 14.82 |  |  |  | 5.1 |
| 14.88 |  |  |  | 17,000 |  |  |  | 14.88 |  |  |  | 4.5 |
| 18.13 |  |  |  | 16,000 |  |  |  | 18.13 |  |  |  | 5.5 |
| 21.45 |  |  |  | 25,227 |  |  |  | 21.45 |  |  |  | 4.8 |
| 23.30 |  |  |  | 6,949 |  |  |  | 23.30 |  |  |  | 2.7 |
| 26.69 |  |  |  | 2,500 |  |  |  | 26.69 |  |  |  | 2.0 |
| 35.83 |  |  |  | 10,000 |  |  |  | 35.83 |  |  |  | 3.6 |
$ | 14.82 – 35.83 |  |  |  | 101,676 |  |  | $ | 19.93 |  |  |  | 4.6 |

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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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