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

6 Months Ended

Apr. 30, 2014

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

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

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

As of April 30, 2014, there were approximately 61,000 shares available for grant under the Optical Cable Corporation Amended and Restated 2011 Stock Incentive Plan (“Amended 2011 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, 2014 was $308,601 and $464,013, respectively. Share-based compensation expense for employees and non-employee Directors recognized in the condensed consolidated statements of income for the three months and six months ended April 30, 2013 was $294,874 and $631,672, respectively. Share-based compensation expense is entirely related to expense recognized in connection with the vesting of restricted stock awards.

Restricted 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.

During the three months ended April 30, 2014, restricted stock awards under the Amended 2011 Plan totaling 338,034 and 25,000 shares were approved by the Compensation Committee of the Board of Directors of the Company for OCC employees and a consultant, respectively. Of the restricted stock awards granted to OCC employees, 169,030 are service-based awards which vest quarterly over approximately four years with the first vesting date occurring on July 31, 2014; and 169,004 shares are operational performance-based shares vesting over approximately six years beginning on January 31, 2016 based on the achievement of certain quantitative operational performance goals. The restricted stock award granted to the consultant is a service-based award which vests quarterly over approximately eight years with the first vesting date occurring on July 31, 2014.

During the three months ended April 30, 2014, restricted stock awards under the 2004 Non-employee Directors Stock Plan, as amended, totaling 29,424 shares were approved by the Board of Directors of the Company. The shares are part of the non-employee Director’s annual compensation for service on the Board of Directors, and the shares vest immediately upon grant. The Company recorded compensation expense totaling $112,105 during the three months and six months ended April 30, 2014 related to the grants to non-employee Directors.

Restricted stock award activity during the six months ended April 30, 2014 consisted of restricted share grants totaling 392,458 shares and 28,844 restricted shares forfeited or withheld for taxes in connection with the vesting of restricted shares.

As of April 30, 2014, 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 have to recognize over a 3.9 year weighted-average period is approximately $3.2 million.