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Note 2 - Stock Incentive Plan and Other Share-based Compensation
 6 Months Ended
Apr. 30, 2025
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

(2)

Stock Incentive Plan and Other Share‑Based Compensation

 

On March 25, 2025, the Company’s shareholders approved the Second Amendment (the “Second Amendment”) to the Optical Cable Corporation 2017 Stock Incentive Plan, as previously amended (the “2017 Plan”) that was recommended for approval by the Company’s Board of Directors. The Second Amendment reserves an additional 350,000 common shares of the Company for issuance under the 2017 Plan. As a result, there were approximately 407,000 shares available for grant under the 2017 Plan, as amended by the Second Amendment (the “2017 Plan, as amended”), as of April 30, 2025 (including the 350,000 new shares added to the 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, 2025 was $71,934 and $186,298, 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 six months ended April 30, 2024 was $91,641 and $250,792, respectively. Share-based compensation expense is entirely related to expense recognized in connection with the vesting of restricted stock awards or other stock awards.

 

Stock Compensation

 

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.

 

Restricted stock award activity during the six months ended April 30, 2025 consisted of restricted shares forfeited totaling 6,560 shares and restricted shares withheld for taxes in connection with the vesting of restricted shares totaling 21,767 shares. 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 April 30, 2025, 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 4.4 year weighted-average period is approximately $853,000.

 

On May 2, 2025, subsequent to the Company’s fiscal quarter end, the Company granted restricted stock awards totaling 36,228 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.