Document:

Exhibit 10.2

 

RESTRICTED STOCK AGREEMENT (DIRECTOR)

 

This Restricted Stock Award
Agreement ("Agreement") has been entered into as of the ____ day of ________, 20__, between Hurco Companies,
Inc., an Indiana corporation (the "Company") and _____________________________ ("Participant"), a non-employee
director of the Company, pursuant to the Company's 2016 Equity Incentive Plan (the "Plan").

 

WHEREAS, the Compensation
Committee of the Board of Directors of the Company (the "Committee"), has granted to Participant a restricted stock award
pursuant to the terms and conditions as provided in the Plan and this Agreement; and

 

WHEREAS, the Company and
Participant desire to set forth the terms and conditions of the award;

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained in this Agreement, the Company and Participant agree as follows:

 

1.          Grant
of Award. Subject to the terms and conditions stated in the Plan and this Agreement, the Committee hereby grants to Participant
an award of ___________ restricted shares (the "Restricted Stock") of the Company's common stock (the "Common
Stock"). The date of this grant (the "Restricted Stock Award Date") is __________ ___, 20__.

 

2.          Representations
of Participant. Participant hereby (a) accepts the award of Restricted Stock described in paragraph 1, (b) agrees
that the Restricted Stock will be held by him or her and his or her successors subject to (and will not be disposed of except in
accordance with) all of the restrictions, terms and conditions contained in this Agreement and the Plan, (c) represents that
he or she is acquiring the Restricted Stock for investment and not with a view to or for resale or distribution thereof, (d) understands
that the transfer or resale of the Restricted Stock may be subject to restriction under the Securities Act of 1933, as amended,
or any applicable state securities laws, and (e) agrees that any certificates issued for the Restricted Stock may bear the
following legend or such other legend as the Company, from time to time, deems appropriate:

 

"The transferability of this
certificate and the shares represented hereby are subject to the terms and conditions (including forfeiture) contained in the Hurco
Companies, Inc. 2016 Equity Incentive Plan, and an Award Agreement entered into between the registered owner and Hurco Companies,
Inc. Copies of the Plan and Award Agreement are on file in the office of the Secretary of Hurco Companies, Inc."

 

3.          Vesting.
Subject to the terms of the Plan, the shares of Restricted Stock held by Participant shall become fully vested and nonforfeitable
one year from the Restricted Stock Award Date.

 

4.          Restriction
Period. Except as otherwise provided in this Agreement, the Plan, or the Company's Stock Ownership Policy, Participant may
not sell, assign, transfer, pledge or otherwise dispose of or encumber any of the shares of Restricted Stock, or any interest therein,
until his or her rights in such Shares have vested in accordance with this Agreement (the "Restriction Period"). Any
purported sale, assignment, transfer, pledge or other disposition or encumbrance in violation of this Agreement or the Plan will
be void and of no effect.

 

     

     

    

 

5.          Voting
and Dividends. During the Restriction Period and except as otherwise provided in the Plan, Participant shall have all of the
rights of a shareholder of the Company with respect to the Restricted Shares, including the right to vote the Restricted
Shares. Any dividends or distributions paid with respect to the Restricted Shares during the Restriction Period will be subject
to the same restrictions as the Restricted Shares to which such dividends or distributions relate.

 

6.          Forfeiture.
Except as provided in the Plan or by the Committee, in its sole discretion, upon termination of service with the Company or one
of its subsidiaries, Participant shall forfeit all unvested shares of Restricted Stock, and shall not receive any compensation
for such forfeited Restricted Stock. Participant shall have no further rights as a shareholder of the Company with respect to the
forfeiture, including, without limitation, any right to receive any distribution payable to shareholders of record on or after
the date of such forfeiture.

 

7.          Certificates.
As soon as practicable after the Restricted Stock Award Date, the Company shall issue stock certificates in respect of the
Restricted Stock which will be registered in Participant's name, and shall bear whatever legend the Committee shall determine,
including, but not limited to, the legend set forth in paragraph 2. Such certificates shall be held by the Company pending vesting.
To the extent the shares of Restricted Stock become vested, the Company shall promptly provide Participant (or in the case of his
death, his designated beneficiary) the certificates for the appropriate number of shares of Common Stock.

 

8.          Withholding.
Prior to the delivery of any shares of Common Stock pursuant to the vesting of the Restricted Stock, the Company has the right
and power to deduct or withhold, or permit Participant to remit to the Company, an amount sufficient to satisfy all applicable
tax withholding requirements, as set forth in the Plan.

 

9.          Qualification
of Rights. Neither this Agreement nor the existence of the award shall be construed as giving Participant any right to be hired
or retained as a director of the Company or any of its subsidiaries.

 

10.         Plan
Controlling. The terms and conditions set forth in this Agreement are subject in all respects to the terms and conditions of
the Plan, which are controlling. All determinations and interpretations of the Committee shall be binding and conclusive upon Participant
and his or her legal representatives.

 

11.         Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana.

 

12.         Notices.
All notices and other communications required or permitted under this Agreement shall be written and shall be delivered personally
or sent by registered or certified first-class mail, postage prepaid and return receipt required, addressed as follows: if to the
Company, to the Company's executive offices in Indianapolis, Indiana, and if to Participant or his or her successor, to the address
last furnished by Participant to the Company. Each notice and communication shall be deemed to have been given when received by
the Company or Participant.

 

     

     

    

 

13.         No
Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of
this Agreement.

 

IN WITNESS WHEREOF, the Company
and Participant have executed this Agreement as of the date first written above.

 

	 	HURCO COMPANIES, INC.
	 	 	 
	 	By: 	 
	 	 	Michael Doar, Chairman and Chief Executive Officer
	 	 	 
	 	 	 
	 	 	[Participant]Exhibit 10.3

 

HURCO COMPANIES, INC. CASH
INCENTIVE PLAN

 

1.    Purpose.
The purpose of the Hurco Companies, Inc. Cash Incentive Plan (the "Plan") is to advance the interests of Hurco Companies,
Inc. and its shareholders by promoting the Company's pay for performance philosophy, attracting and retaining key employees of
the Company and its subsidiaries, and stimulating the efforts of such employees toward the continued success and growth of the
Company's business. Amounts paid pursuant to the Plan are intended to qualify as performance-based compensation within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as amended.

 

2.    Definitions.
 When the following terms are used with capital letters in this Plan, they will have the meanings indicated:

 

(a)          "Award"
means an incentive award which, subject to the terms and conditions prescribed by the Committee, entitles a Participant to receive
a cash payment from the Company or a subsidiary employing the Participant in accordance with Section 3.

 

(b)          "Board"
means the Board of Directors of the Company.

 

(c)          "Code"
means the Internal Revenue Code of 1986, as amended.

 

(d)          "Committee"
means the Compensation Committee of the Board or such other committee as may be designated by the Board to administer the Plan.

 

(e)          "Company"
means Hurco Companies, Inc. or any successor thereto.

 

(f)          "Covered
Officer" means any Participant who is, or is designated by the Committee at or prior to the grant of an Award hereunder
as a person who may be, a "covered employee" within the meaning of Section 162(m)(3) of the Code for the Performance
Period as to which the Award is payable, and for whom the Committee intends that the Award constitute Performance-Based Compensation.

 

(g)          "Eligible
Employee" means any employee of the Company or any of its subsidiaries.

 

(h)          "Participant"
means an Eligible Employee designated by the Committee to participate in the Plan as provided in Section 3.1. Designation
by the Committee as a Participant for a specific Performance Period or series of Performance Periods does not confer on the Participant
the right to participate in the Plan for any other Performance Periods.

 

(i)          "Performance-Based
Compensation" means an Award that is intended to constitute "performance-based compensation" within the meaning
of Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder. 

 

(j)          "Performance
Measures" means one or a combination of two or more of the following performance-based metrics as approved by the Committee:
(i) net earnings or net income; (ii) earnings before one or more of interest, taxes, depreciation, amortization and share-based
compensation expense; (iii) earnings per share (basic or diluted); (iv) revenue; (v) gross profit; (vi) operating income; (vii)
profitability as measured by return ratios (including, but not limited to, return on assets, return on equity, return on invested
capital and return on revenue) or by the degree to which any of the foregoing earnings measures exceed a percentage of revenue
or gross profit; (viii) cash flow (including, but not limited to, operating cash flow, free cash flow and cash flow return on capital
or on tangible equity); (ix) book value; (x) market share; (xi) margins (including, but not limited to, one or more of gross, operating
and net earnings margins); (xii) stock price; (xiii) total shareholder return; (xiv) asset quality; (xv) non-performing assets;
(xvi) operating assets; (xvii) balance of cash, cash equivalents and marketable securities; (xviii) cost and expense management;
(xix) economic value added or similar value added measurements; (xx) improvement in or attainment of working capital levels; (xxi)
productivity ratios; (xxii) employee retention or satisfaction measures; (xxiii) safety record; (xxiv) customer satisfaction; (xxv)
debt, credit or other leverage measures or ratios; and (xxvi) implementation or completion of critical projects. In addition, for
any Award to a Participant who is not a Covered Officer or that is not intended to constitute Performance-Based Compensation, Performance
Measures may include, alone or in combination with any of the foregoing Performance Measures, any other measure of performance
as determined by the Committee. Any performance goal based on one or more of the foregoing Performance Measures may be expressed
in absolute amounts, on a per share basis (basic or diluted), as a growth rate or change from preceding periods, as a comparison
to the performance of specified companies, indices or other external measures, or as a percentage of any other Performance Measure,
and may relate to one or any combination of Company, subsidiary, business unit, division, operational unit or individual performance.

 

     

     

    

 

(k)          "Performance
Period" means the period of time specified by the Committee, which shall be at least one fiscal quarter in duration for
any Covered Officer, over which the degree of attainment of specified performance goals will be measured.

 

3.     Awards.

 

3.1          Allocation
of Awards. Prior to the earlier of (i) 90 days following the commencement of a Performance Period or (ii) the passage
of 25 percent of the duration of such Performance Period, the Committee will designate such Eligible Employees as it deems appropriate
to participate in the Plan for such Performance Period. The Committee's designation of an Eligible Employee as entitled to participate
in the Plan may be for a single Performance Period, or for a fixed or indefinite series of future Performance Periods, in its discretion.
A designation for more than one Performance Period shall be subject to the Participant's continued employment by the Company or
its subsidiaries, and may be rescinded at any time as to future Performance Periods by the Committee. Awards may be granted to
a Participant in such amounts and on such terms as may be determined by the Committee. At the time an Award is made, the Committee
will specify the terms and conditions that will govern the Award, which will include that the Award will be earned only upon, and
to the extent that, the applicable performance goals as described in Section 3.2 are satisfied over the course of the applicable
Performance Period. Different terms and conditions may be established by the Committee for different Awards and for different Participants.

 

3.2           Performance
Goals. The payment of an Award will be contingent upon the degree of attainment over the applicable Performance Period of one
or more performance goals based on Performance Measures described in Section 2(j). For any Performance Period, the Committee will
select the applicable Performance Measure(s), specify the performance goal(s) based on those Performance Measures, and specify
in terms of an objective formula or standard the method for calculating the amount payable to a Participant if the performance
goal(s) are satisfied, all prior to the earlier of (i) 90 days following the commencement of the Performance Period or (ii) the
passage of 25 percent of the duration of the Performance Period. In specifying the performance goals applicable to any Performance
Period, the Committee may provide that one or more objectively determinable adjustments shall be made to the Performance Measures
on which the performance goals are based, which may include adjustments that would cause such measures to be considered "non-GAAP
financial measures" within the meaning of Rule 101 under Regulation G promulgated by the Securities and Exchange Commission,
such as excluding the impact of specified unusual or nonrecurring events such as acquisitions, divestitures, restructuring activities,
asset write-downs, litigation judgments or settlements or changes in tax laws or accounting principles. The Committee may, in its
discretion, modify the performance goals applicable to a Performance Period if it determines that as a result of changed circumstances,
such modification is required to reflect the original intent of such performance goals. However, no such modification may be made
to the extent it would increase the amount of Performance-Based Compensation that would otherwise be payable to any Participant
who is a Covered Officer.

 

     

     

    

 

3.3           Maximum
Amount of Awards. No Participant who is a Covered Officer shall be entitled to receive an Award payment for any Performance
Period that exceeds $3,000,000 for an annual Performance Period.

 

3.4           Adjustments.
The Committee is authorized at any time during or after a Performance Period, in its sole and absolute discretion, to reduce
or eliminate the amount of an Award otherwise payable to any Participant for any reason. No reduction in the amount of an Award
payable to any Participant shall increase the amount of an Award payable to any other Participant.

 

3.5           Payment
of Awards. Following the completion of each Performance Period, the Committee shall certify in writing the degree to
which the specified performance goals based on the Performance Measures selected for that Performance Period were attained and
the resulting amounts payable to Participants in connection with Awards for that Performance Period. Each Participant shall receive
payment in cash of the Award as soon as practicable following the Committee's determination and certification made pursuant to
this Section 3.5, but in no event later than two and one-half months after the end of the calendar year during which the applicable
Performance Period ended.

 

4.     Administration.

 

4.1           Authority
of Committee. The Committee shall administer this Plan. The Committee shall have exclusive power, subject to the limitations
contained in this Plan, to make Awards and to determine when and to whom Awards will be granted, and the form, amount and other
terms and conditions of each Award, subject to the provisions of this Plan. The Committee shall have the authority to interpret
this Plan and any Award made under this Plan, to establish, amend, waive and rescind any rules and regulations relating to the
administration of this Plan, and to make all other determinations necessary or advisable for the administration of this Plan. The
Committee may correct any defect, supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner
and to the extent it shall deem desirable. The determinations of the Committee in the administration of this Plan, as described
herein, shall be final, binding and conclusive, subject to the provisions of this Plan. A majority of the members of the Committee
shall constitute a quorum for any meeting of the Committee.

 

4.2           Indemnification.
To the greatest extent permitted by law, (i) no member or former member of the Committee shall be liable for any action or
determination taken or made in good faith with respect to the Plan or any Award made under the Plan, and (ii) the members
or former members of the Committee shall be entitled to indemnification by the Company against and from any loss incurred by such
members by reason of any such actions and determinations.

 

5.    Effective
Date of the Plan.  The Plan shall become effective as of the date it is approved by the Company's shareholders. The
Plan shall remain in effect until it has been terminated pursuant to Section 8.

 

6.    Right
to Terminate Employment. Nothing in the Plan shall confer upon any Participant the right to continue in the employment of the
Company or any of its subsidiaries or affect any right which the Company or any of its subsidiaries may have to terminate the employment
of a Participant with or without cause.

 

7.    Tax
Withholding.  The Company or any applicable subsidiary shall have the right to withhold from cash payments under the
Plan to a Participant or other person an amount sufficient to cover any required withholding taxes.

 

     

     

    

 

8.     Amendment,
Modification and Termination of the Plan. The Board or Committee may at any time terminate, suspend or modify the Plan and
the terms and provisions of any Award to any Participant which has not been paid. Amendments are subject to approval of the Company's
shareholders only if such approval is necessary to maintain the Plan in compliance with the requirements of Section 162(m)
of the Code, its successor provisions or any other applicable law or regulation. No Award may be granted during any suspension
of the Plan or after its termination.

 

9.     Unfunded
Plan. The Plan shall be unfunded, and neither the Company nor any of its subsidiaries shall be required to segregate any assets
that may at any time be represented by Awards under the Plan. No Participant shall, by virtue of this Plan, have any interest in
any specific assets of the Company or any of its subsidiaries.

 

10.   Other
Benefit and Compensation Programs. Neither the approval of the Plan by the Board nor its submission to or approval by the shareholders
of the Company shall be construed as creating any limitation on the power of the Board or Committee to adopt such other incentive
arrangements as it may deem appropriate. Payments received by a Participant under an Award made pursuant to the Plan shall not
be deemed a part of a Participant's regular recurring compensation for purposes of the termination, indemnity or severance pay
law of any state and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit
plan, contract or similar arrangement provided by the Company or any of its subsidiaries unless expressly so provided by such other
plan, contract or arrangement, or unless the Committee expressly determines otherwise.

 

11.   Governing
Law. To the extent that Federal laws do not otherwise control, the Plan and all determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of Indiana, without regard to its conflicts of laws principles, and shall
be construed accordingly.

 

12.   Other
Provisions. 

 

12.1         Non-transferability.
Participants and beneficiaries shall not have the right to assign, pledge or otherwise dispose of any part of an Award under this
Plan.

 

12.2         Termination
of Employment. Except as otherwise provided in this section, no Award shall be paid to a Participant who is not actively employed
by the Company or one of its subsidiaries as of the end of the applicable Performance Period. If a Participant's employment with
the Company and its subsidiaries ends during a Performance Period, the Committee may, in its discretion, determine that the Participant
(or his or her beneficiaries) shall be paid a pro rata portion of the Award payment that the Participant would have received but
for the fact that the Participant's employment ended. Any such prorated Award payment will be paid at the same time as other Award
payments with respect to the applicable Performance Period. The Committee may also provide in connection with specific Awards that
the achievement of the specified performance goals in connection with such Awards may be waived upon the death or disability of
the Participant or under any other circumstance with respect to which the existence of such possible waiver would not cause the
Award to fail to qualify as Performance-Based Compensation.

 

12.3         Compensation
Recovery Policy. Any Award under this Plan and any compensation associated therewith shall be subject to potential forfeiture
or recovery by the Company in accordance with any compensation recovery policy adopted by the Board or the Committee, including
any policy adopted in response to the requirements of Section 10D of the Securities Exchange Act of 1934, as amended and any implementing
rules and regulations thereunder adopted by the Securities and Exchange Commission or any national securities exchange on which
the Company's common stock is then listed.  Any agreement or other document evidencing such an Award may be unilaterally amended
by the Committee to comply with any such compensation recovery policy. 

 

12.4         Code
Section 409A. It is intended that all Awards under the Plan will not provide for the deferral of compensation within the meaning
of Code Section 409A and thereby be exempt from Code Section 409A, and Awards shall be structured and the Plan administered and
interpreted in accordance with this intent. None of the Company, the Board, the Committee nor any other person involved with the
administration of this Plan shall (i) in any way be responsible for ensuring the exemption of any Award from the requirements
of Code Section 409A, (ii) have any obligation to design or administer the Plan or Awards granted thereunder in a manner that
minimizes a Participant's tax liabilities, including the avoidance of any additional tax liabilities under Code Section 409A, and
(iii) shall have any liability to any Participant for any such tax liabilities.

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