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

3 Months Ended

Jan. 31, 2017

Notes to Financial Statements

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

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

As of

January

31,

2017,

there were approximately

37,000

remaining shares available for grant under the Optical Cable Corporation Second Amended and Restated

2011

Stock Incentive 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 ended

January

31,

2017

and

2016

was

$148,920

and

$219,073,

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 stock awards to non-employee members of the Board of Directors.

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.

During the

three

months ended

January

31,

2017,

restricted stock awards for employees under the Optical Cable Corporation Second Amended and Restated

2011

Stock Incentive Plan totaling

359,831

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,

2018

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.

Restricted stock award activity during the

three

months ended

January

31,

2017

consisted of restricted stock grants totaling

359,831

shares, restricted shares forfeited totaling

68,636

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

3,452.

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 in the amount of the withholding taxes owed on the value of any vesting restricted shares in order to avoid surrendering shares.

As of

January

31,

2017,

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

3.5

year weighted-average period is approximately

$3.0

million.