Note 2 - Stock Incentive Plans and Other Share-based Compensation

9 Months Ended

Jul. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

(2)	Stock Incentive Plans and Other Share-Based Compensation

On March 31, 2015, the Company’s shareholders approved the Optical Cable Corporation Second Amended and Restated 2011 Stock Incentive Plan (the “2015 Restatement”) that was recommended for approval by the Company’s Board of Directors. The 2015 Restatement reserves an additional 550,000 common shares of the Company for issuance under the 2015 Restatement and succeeds and replaces the Optical Cable Corporation Amended and Restated 2011 Stock Incentive Plan (the “2011 Amended Plan”) and the Optical Cable Corporation 2004 Non-Employee Directors Stock Plan. As of July 31, 2015, there were approximately 344,000 remaining shares available for grant under the 2015 Restatement.

Share-based compensation expense for employees, a consultant and non-employee Directors recognized in the condensed consolidated statements of operations for the three months and nine months ended July 31, 2015 was $222,195 and $859,889, respectively. Share-based compensation expense for employees, a consultant and non-employee Directors recognized in the condensed consolidated statements of operations, for the three months and nine months ended July 31, 2014 was $229,649 and $693,662, respectively. Share-based compensation expense is entirely related to expense recognized in connection with the vesting of restricted or other stock awards.

Restricted and Other Stock Awards

The Company has granted, and anticipates granting from time to time, restricted stock awards subject to approval by the Compensation Committee of the Board of Directors. Since fiscal year 2004, the Company has exclusively used restricted stock awards for all share-based compensation.

Restricted stock awards to non-employee members of the Board of Directors vest immediately upon grant, but cannot be sold, transferred, pledged or otherwise encumbered or disposed of until six months after the date of grant.

Of the restricted stock awards granted to employees during the nine months ended July 31, 2015, approximately 50% are subject to vesting over time (vesting annually over 3 years) and approximately 50% are subject to vesting based on objective performance-based measures during fiscal years 2016 through 2019. Of the restricted stock awards granted to employees during the nine months ended July 31, 2014, approximately 50% are subject to vesting over time (vesting quarterly over 4 years) and approximately 50% are subject to vesting based on objective performance-based measures during fiscal years 2015 through 2019. The Company used gross profit growth as its performance-based measure for restricted stock awards granted to employees during the nine months ended July 31, 2015 and 2014.

Restricted stock award activity during the nine months ended July 31, 2015 consisted of restricted or other stock grants totaling 371,637, shares forfeited totaling 5,403 and restricted shares withheld for taxes in connection with the vesting of restricted shares totaling 49,844. Employees have the option to surrender shares to pay for withholding tax obligations resulting from any vesting restricted shares, or to pay cash to the Company in the amount of the withholding taxes owed on the value of any vesting restricted shares in order to avoid surrendering shares.

As of July 31, 2015, the estimated amount of compensation cost related to unvested equity-based compensation awards in the form of service-based and operational performance-based shares that the Company will recognize over a 3.4 year weighted-average period is approximately $3.2 million.