XML 41 R28.htm IDEA: XBRL DOCUMENT

Stock-Based Compensation

12 Months Ended

Jul. 31, 2021

Share-based Payment Arrangement [Abstract]

Note 20—Stock-Based Compensation

Stock-Based Compensation Plan

The 2015 Stock Option and Incentive Plan is intended to provide incentives to officers, employees, directors and consultants of the Company, including stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. On December 12, 2019, the Company’s stockholders approved an amendment to the 2015 Stock Option and Incentive Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 0.4 million shares. At July 31, 2021, the Company had 1.6 million shares of Class B common stock reserved for awards made under the 2015 Stock Option and Incentive Plan and 0.3 million shares were available for future grants.

On September 14, 2021, the Company’s Board of Directors amended the Company’s 2015 Stock Option and Incentive Plan to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 175,000 shares. The amendment is subject to approval by the Company’s stockholders at its annual meeting of stockholders on December 15, 2021.

Stock Options

Option awards are generally granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Option awards generally vest on a graded basis over three years of service and have ten-year contractual terms. No option awards were granted in fiscal 2021 or fiscal 2020. The fair value of stock options was estimated on the date of the grant using a Black-Scholes valuation model. Expected volatility is based on historical volatility of the Company’s Class B common stock and other factors. The Company uses historical data on exercise of stock options, post vesting forfeitures and other factors to estimate the expected term of the stock-based payments granted. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

A summary of stock option activity for the Company is as follows:

	Number of Options (in thousands)			Weighted- Average Exercise Price			Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at July 31, 2020		1,126		$	14.42
Granted		—			—
Exercised		(81	)		(8.48	)
Cancelled / Forfeited		(10	)		(13.72	)
OUTSTANDING AT JULY 31, 2021		1,035		$	14.89			0.8	$	36,133
EXERCISABLE AT JULY 31, 2021		1,035		$	14.89			0.8	$	36,133

The outstanding and exercisable options at July 31, 2021 include options to purchase up to 1.0 million shares of the Company’s Class B common stock that were granted to Howard S. Jonas on May 2, 2017. The exercise price of these options is $14.93 per share and the options expire on May 1, 2022.

In fiscal 2021 and fiscal 2020, the Company received proceeds from the exercise of stock options of $0.7 million and $0.3 million, respectively, for which the Company issued 81,041 and 32,551 shares, respectively, of its Class B common stock. The total intrinsic value of options exercised during fiscal 2021 and fiscal 2020 was $0.2 million and $16,000, respectively. At July 31, 2021, there was no unrecognized compensation cost related to non-vested stock options.

IDT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Restricted Stock

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

(in thousands)	Number of Non-vested Shares			Weighted- Average Grant- Date Fair Value
Non-vested shares at July 31, 2020		199		$	4.41
Granted		17			12.70
Vested		(21	)		(10.47	)
Forfeited		—			—
NON-VESTED SHARES AT JULY 31, 2021		195		$	4.49

At July 31, 2021, there was $0.2 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over a weighted-average period of 0.4 years. The total grant date fair value of shares vested in fiscal 2021 and fiscal 2020 was $0.2 million and $0.3 million, respectively.

Deferred Stock Units Equity Incentive Program

The Company has an existing equity incentive program in the form of DSUs that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. Subject to continued full time employment or other service to the Company, the DSUs were eligible for vesting in three equal amounts on each of January 6, 2020, January 5, 2021, and January 5, 2022. The number of shares issuable on each vesting date varies between 50% to 200% of the number of DSUs that vest on that vesting date, depending on the market price for the underlying Class B common stock on the vesting date relative to the market price at the time of the grant.

On January 5, 2021 and January 6, 2020, in accordance with the program and based on elections made by certain grantees, the Company issued 283,838 and 100,284 shares, respectively, of its Class B common stock in respect of vested DSUs. Based on those elections, on January 5, 2021 and January 6, 2020, vesting for 19,919 and 38,024 DSUs, respectively, was delayed until the next vesting date.

A summary of the status of the Company’s grants of DSUs under this program is presented below:

(in thousands)	Number of Non-vested DSUs			Weighted- Average Grant- Date Fair Value
Non-vested shares at July 31, 2020		315		$	10.26
Granted		1			11.19
Vested		(152	)		(10.07	)
Forfeited		(10	)		(11.19	)
NON-VESTED SHARES AT JULY 31, 2021		154		$	10.39

All of the non-vested DSUs outstanding at July 31, 2021 are eligible to vest (if the conditions therefor are satisfied) on January 5, 2022, the final vesting date under the program. At July 31, 2021, there was $0.3 million of total unrecognized compensation cost related to non-vested DSUs, which is expected to be recognized over a weighted-average period of 0.4 years. The total grant date fair value of DSUs vested in fiscal 2021 and fiscal 2020 was $1.5 million and $1.1 million, respectively.

IDT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Grant of Restricted Equity in net2phone 2.0, Inc.

On December 31, 2020, the previously approved compensatory arrangement with each of Howard S. Jonas and Shmuel Jonas, the Company’s Chief Executive Officer, was finalized. Howard S. Jonas and Shmuel Jonas each received fifty restricted shares of net2phone 2.0, Inc. (“net2phone 2.0”) Class B common stock, which represents 5% of the outstanding common stock of net2phone 2.0. net2phone 2.0 is a new entity that owns and operates the net2phone-UCaaS segment. The restricted shares will vest if: (a) for any fiscal quarter of net2phone 2.0 between November 1, 2020 and October 31, 2023, net2phone 2.0 records subscription revenue that is at least $18 million, and (b) as of October 31, 2023, the valuation of net2phone 2.0 is $100 million or more. The restricted shares will also vest in the event, prior to October 31, 2023, net2phone 2.0 or its assets are sold at an equity valuation and on a cash-free basis of $100 million or more, regardless of whether the revenue threshold was satisfied prior thereto. The restricted shares entitle each grantee to proceeds only on a sale, spin-off, initial public offering, or other monetization of net2phone 2.0 and have protection from dilution for the first $15 million invested in the net2phone 2.0 following the grant. The aggregate estimated fair value on the grant date was $0.2 million, which will be recognized over the vesting period.