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

9 Months Ended

Jul. 31, 2020

Share-based Payment Arrangement [Text Block]

(2)

Stock Incentive Plans and Other Share-Based Compensation

As of July 31, 2020, there were approximately 362,000 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 nine months ended July 31, 2020 was $40,605 and $101,638, respectively, and for the three months and nine months ended July 31, 2019 was $42,549 and $941,253, 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 July 31, 2020, OCC granted restricted stock awards totaling 58,880 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 $35,917 and $95,245, respectively, during the three months and nine months ended July 31, 2020 and recorded expense totaling $35,597 and $89,241, respectively, during the three and nine months ended July 31, 2019 related to the grants to non-employee Directors.

During the three months ended July 31, 2020, the Company also granted a restricted stock award totaling 25,000 shares to a consultant under the 2017 Plan. The shares vest annually in equal amounts over five years beginning January 31, 2022.

Restricted stock award activity during the nine months ended July 31, 2020 consisted of restricted stock grants totaling 83,880 shares and restricted shares forfeited totaling 5,774. OCC restricted stock grants provide the participant with 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 July 31, 2020, 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 2.0 year weighted-average period is approximately $435,000.