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EQUITY INCENTIVE PLAN | 3 Months Ended
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Jan. 31, 2025
EQUITY INCENTIVE PLAN |
EQUITY INCENTIVE PLAN | 4. EQUITY INCENTIVE PLAN ​ In March 2016, we adopted the Hurco Companies, Inc. 2016 Equity Incentive Plan (as amended, the “2016 Equity Plan”), which allows us to grant awards of stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards. The 2016 Equity Plan replaced the Hurco Companies, Inc. 2008 Equity Incentive Plan (the “2008 Equity Plan”) and is the only active plan under which equity awards may be made by us to our employees and non-employee directors. No further awards will be made under our 2008 Equity Plan. The total number of shares of our common stock that may be issued pursuant to awards under the 2016 Equity Plan was initially 856,048, which included 386,048 shares that remained available for future grants under the 2008 Equity Plan as of March 10, 2016, the date our shareholders approved the 2016 Equity Plan. On March 10, 2022, our shareholders approved the Amended and Restated Hurco Companies, Inc. 2016 Equity Incentive Plan, which, among other items, increased the aggregate number of shares that may be issued under the 2016 Equity Plan by 850,000 shares. ​ The Compensation Committee of our Board of Directors has the authority to determine the officers, directors, and key employees who will be granted awards under the 2016 Equity Plan; 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 restricted shares and performance stock units under the 2016 Equity Plan that are currently outstanding. The market value of a share of our common stock, for purposes of the 2016 Equity 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. ​ On January 7, 2025, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of time-based restricted shares and performance stock units (“PSUs”) under the 2016 Equity Plan, which will be payable in shares of our common stock if earned and vested. The awards were approximately 45% time-based vesting and approximately 55% performance-based vesting. The three-year performance period for the PSUs is fiscal year 2025 through fiscal year 2027. ​ On that date, the Compensation Committee granted a total of 75,119 shares of time-based restricted stock 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 $19.81 per share. ​ On January 7, 2025, the Compensation Committee also granted a total target number of 50,078 PSUs to our executive officers designated as “PSU – NI”. These PSUs were weighted as approximately 30% of the overall 2025 executive long-term incentive compensation arrangement and will vest and be paid based upon the achievement of pre-established goals related to our average net income over the three-year period of fiscal years 2025-2027. Participants will have the ability to earn between 50% of the target number of the PSUs – NI for achieving threshold performance and 200% of the target number of the PSUs – NI for achieving maximum performance. The grant date fair value of the PSUs – NI was based on the closing sales price of our common stock on grant date, which was $19.81 per PSU. ​ On January 7, 2025, the Compensation Committee also granted a total target number of 41,735 PSUs to our executive officers designated as “PSU –FCF”. These PSUs were weighted as approximately 25% of the overall 2025 executive long-term incentive compensation arrangement and will vest and be paid based upon the achievement of pre-established goals related to our average free cash flow over the three-year period of fiscal years 2025-2027. Participants will have the ability to earn between 50% of the target number of the PSUs – FCF for achieving threshold performance and 200% of the target number of the PSUs – FCF for achieving maximum performance. The grant date fair value of the PSUs – FCF was based on the closing sales price of our common stock on the grant date, which was $19.81 per PSU. ​ On November 13, 2024, the Compensation Committee granted a total of 13,525 shares of time-based restricted stock to our non-executive employees. 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 $21.80 per share. ​ A reconciliation of our restricted stock and PSU activity and related information for the three-month period ended January 31, 2025 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted Average Grant
​ |  | Number of Shares |  | Date Fair Value
Unvested at October 31, 2024 |  | 378,092 | ​ | $ | 24.97
Shares or units granted |  | 180,457 | ​ | ​ | 19.96
Shares or units vested |  | (48,366) | ​ | ​ | 28.07
Shares or units cancelled |  | (42,472) | ​ | ​ | 31.06
Shares withheld |  | (17,748) | ​ | ​ | 28.51
Unvested at January 31, 2025 |  | 449,963 | ​ | $ | 21.91
​ During each of the first three months of fiscal 2025 and 2024, we recorded approximately $0.6 million, of stock-based compensation expense related to grants under the 2016 Equity Plan. As of January 31, 2025, there was an estimated $5.2 million of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal year 2028.

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