Equity Incentive Plan

12 Months Ended

Oct. 31, 2024

Equity Incentive Plan [Abstract]

Equity Incentive Plan

Note 10 - Equity Incentive Plan:

On September 10, 1998, the Board approved FREIT's Equity Incentive Plan (the "Plan") which was ratified by FREIT's stockholders on April 7, 1999, whereby up to 920,000 of FREIT's shares (adjusted for stock splits) may be granted to key personnel in the form of stock options, restricted share awards and other share-based awards. In connection therewith, the Board approved an increase of 920,000 shares in FREIT's number of authorized shares. Key personnel eligible for these awards include directors, executive officers and other persons or entities including, without limitation, employees, consultants and employees of consultants, who are in a position to make significant contributions to the success of FREIT. Under the Plan, the exercise price of all options will be the fair market value of the shares on the date of grant. The consideration to be paid for restricted share and other share-based awards shall be determined by the Board, with the amount not to exceed the fair market value of the shares on the date of grant. The maximum term of any award granted may not exceed ten years. The Board will determine the actual terms of each award.

On April 4, 2007, FREIT stockholders approved amendments to the Plan as follows: (a) reserving an additional 300,000 shares for issuance under the Plan; and (b) extending the term of the Plan until September 10, 2018. On April 5, 2018, FREIT stockholders approved amendments to the Plan to (a) increase the number of shares reserved for issuance thereunder

by an additional 300,000 shares and (b) further extended the term of the Plan from September 10, 2018 to September 10, 2028.

On March 9, 2023, in accordance with the Plan, the Compensation Committee of FREIT’s Board recommended to the Board and the Board approved that for services rendered and to be rendered in Fiscal 2023, in lieu of cash compensation in the amount of $20,000, each director was awarded shares of Common Stock, $0.01 par value, (the “Shares”) in FREIT. Based on the closing price of FREIT’s Shares on March 9, 2023 of $15.50 per Share, the Board approved an award of 1,290 Shares of FREIT to each director serving on FREIT’s Board. As such, 1,290 Shares were issued to each director on March 9, 2023 and upon issuance were deemed fully paid and non-assessable.

On March 22, 2024, in accordance with the Plan, the Compensation Committee of FREIT’s Board recommended to the Board and the Board approved that for services rendered and to be rendered in Fiscal 2024, in lieu of cash compensation in the amount of $20,000, each director was awarded Shares in FREIT. Based on the closing price of FREIT’s Shares on March 22, 2024 of $16.25 per Share, the Board approved an award of 1,230 Shares of FREIT to each director serving on FREIT’s Board. As such, 1,230 Shares were issued to each director on March 22, 2024 and upon issuance were deemed fully paid and non-assessable. 

As of October 31, 2024, 428,060 shares are available for issuance under the Plan. There was no impact to the Plan or options previously granted as a result of the Reincorporation of FREIT with and into FREIT as discussed in Note 1.

The following table summarizes stock option activity for Fiscal 2024, 2023 and 2022:

	Year Ended October 31,						Year Ended October 31,						Year Ended October 31,
	2024						2023						2022
	No. of Options			Weighted Average			No. of Options			Weighted Average			No. of Options			Weighted Average
	Outstanding			Exercise Price			Outstanding			Exercise Price			Outstanding			Exercise Price
Options outstanding at beginning of year		8,440		$	9.21			126,140		$	10.64			310,740		$	18.35
Options granted during year		—			—			—			—			—			—
Options forfeited/cancelled during year		(3,640	)		(10.95	)		—			—			—			—
Options exercised during year		(4,800	)		(7.90	)		(117,700	)		(10.74	)		(184,600	)		(10.99	)
Options outstanding at end of year		—		$	—			8,440		$	9.21			126,140		$	10.64
Options vested and expected to vest		—						8,290						124,850
Options exercisable at end of year		—						7,440						116,540

For Fiscal 2024, 2023 and 2022, compensation expense related to stock options vested amounted to approximately $1,000, $11,000 and $1,192,000, respectively. On August 4, 2022, in connection with the Board’s approval of the special, extraordinary, non-recurring cash distribution (“Extraordinary Distribution”), the Compensation Committee of the Board recommended and the Board approved that (i) the option exercise price of options outstanding under the Plan be adjusted, by reason of the Extraordinary Distribution, in accordance with the terms of the Plan; and (ii) the exercise price of options outstanding under the Plan should be reduced by an amount equal to the excess, if any, of (x) the average of the closing price of FREIT’s shares, as reported by Yahoo Finance, for each business day during the period of five (5) business days prior to the ex-dividend date relating to the Extraordinary Distribution (August 31, 2022), over (y) the average of the closing price of FREIT’s shares, as reported by Yahoo Finance, for each business day during the period of five (5) business days following the ex-dividend date relating to the Extraordinary Distribution. (See Note 2 for additional details on the sale of the Maryland Properties.) On September 9, 2022, the Board approved a reduction of $7.50 per share in exercise price for the 310,740 options then outstanding under the Plan. As a result of this modification of the exercise price for stock options outstanding under the Plan, the Company revalued its stock options in accordance with ASC 718 and recorded an incremental stock compensation expense of approximately $1,174,000 in the fourth quarter of Fiscal 2022.

On September 3, 2024, the 3,640 options granted on September 4, 2014 expired unexercised. In Fiscal 2024, 2023 and 2022, 4,800, 117,700 and 184,600, respectively, options were exercised for an aggregate amount of approximately $37,900, $1.3 million and $2 million, respectively. As of October 31, 2024, all options have been fully vested and exercised with no remaining compensation cost to be recognized.