(

)

Stock Incentive Plans and Other Share-Based Compensation

As of

April 30, 2018,

there were approximately

204,000

remaining shares available for grant under the Optical Cable Corporation

2017

Stock Incentive Plan (

“2017

Plan”).

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

six

months ended

April 30, 2018

was

$589,505

and

$702,859,

respectively and for the

three

months and

six

months ended

April 30, 2017

was

$282,093

and

$431,013,

respectively. Share-based compensation expense is entirely related to expense recognized in connection with the vesting of restricted stock awards 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 of employees and consultants, and restricted stock awards or stock awards to non-employee members of the Board of Directors.

During the

three

months ended

April 30, 2018,

restricted stock awards for employees under the

2017

Plan totaling

16,584

shares were approved by the Compensation Committee of the Board of Directors of the Company. All of the restricted shares granted are operational performance-based shares vesting over approximately

five

years beginning on

January 31, 2019

based on the achievement of certain quantitative operational performance goals. The Company uses gross profit growth as its performance-based measure for restricted stock awards granted to employees.

During the

three

months ended

April 30, 2018,

OCC granted restricted stock awards totaling

35,810

shares to non-employee Directors under the

2017

Plan. The shares are subject to a

one

-year vesting period and are part of the non-employee Directors’ annual compensation for service on the Board of Directors. The Company recorded expense totaling

$23,523

and

$46,274,

respectively, during the

three

months and

six

months ended

April 30, 2018

and recorded expense totaling

7,583

during the

three

and

six

months ended

April 30, 2017

related to the grants to non-employee Directors.

Restricted stock award activity during the

six

months ended

April 30, 2018

consisted of restricted stock grants totaling

498,083

shares, restricted shares forfeited totaling

49,384

and restricted shares withheld for taxes in connection with the vesting of restricted shares totaling

68,217.

Employees and non-employee Directors 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 or taxing authorities in the amount of the withholding taxes owed on the value of any vesting restricted shares in order to avoid surrendering shares.

As of

April 30, 2018,

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

$2.7

million.