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Equity
 6 Months Ended
Jan. 31, 2023
Equity:  
Equity

Note 12—Equity

 

Stock Issued to Certain Executive Officers for Bonus Payments

 

In the six months ended January 31, 2023, certain executive officers of the Company received performance bonuses for fiscal 2022 of an aggregate of $1.2 million, of which one-half was paid in cash and one-half was paid in shares of the Company’s Class B common stock. The Company issued 24,543 shares of its Class B common stock with an issue date value of $0.6 million for the bonus payments.

 

2015 Stock Option and Incentive Plan

 

On December 14, 2022, the Company’s stockholders approved an amendment to 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 50,000 shares.

 

In the six months ended January 31, 2023, the Company received cash from the exercise of stock options of $0.2 million, for which the Company issued 12,500 shares of its Class B common stock. There were no stock option exercises in the six months ended January 31, 2022.

 

In the six months ended January 31, 2023, the Company granted 15,000 shares of its Class B common stock to an employee. The Company recorded stock-based compensation expense and an increase in “Additional paid-in capital” of $0.4 million for this grant, which was the fair value of the shares on the grant date.

 

Stock Repurchases

 

The Company has an existing stock repurchase program authorized by its Board of Directors for the repurchase of shares of the Company’s Class B common stock. The Board of Directors authorized the repurchase of up to 8.0 million shares in the aggregate. In the six months ended January 31, 2023, the Company repurchased 203,436 shares of its Class B common stock for an aggregate purchase price of $5.0 million. There were no repurchases under the program in the six months ended January 31, 2022. At January 31, 2023, 5.0 million shares remained available for repurchase under the stock repurchase program.

 

In the six months ended January 31, 2023 and 2022, the Company paid $0.3 million and $9.0 million, respectively, to repurchase 13,403 and 200,438 shares, respectively, of the Company’s Class B common stock that were tendered by employees of the Company to satisfy the employees’ tax withholding obligations in connection with shares issued for bonus payments, the vesting of deferred stock units (“DSUs”), and lapsing of restrictions on restricted stock. Such shares were repurchased by the Company based on their fair market value as of the close of business on the trading day immediately prior to the vesting date.

 

Deferred Stock Units Equity Incentive Program

 

On November 30, 2022, the Company adopted an equity incentive program (under its 2015 Stock Option and Incentive Plan) in the form of grants of DSUs that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. On December 5, 2022, the Company granted 187,975 DSUs to certain of its executive officers and other employees. Subject to continued full time employment or other service to the Company, the DSUs are scheduled to vest in three equal amounts on each of May 17, 2023, February 21, 2024, and February 25, 2025. The number of shares that will be issuable on each vesting date will vary 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 price approved by the Compensation Committee of the Company’s Board of Directors of $25.45 per share (which was based on the market price at the time of the grant). In addition, the grantee will have the right to elect a later vesting date no later than April 14, 2023 for the May 17, 2023 vesting date, and no later than January 19, 2024 for the February 21, 2024 vesting date. A grantee will have the option to elect a later vesting date for one-half or all of the shares scheduled to vest on the then upcoming vesting date and any DSUs that do not vest based on the grantee’s election, will be eligible to vest on the subsequent scheduled vesting date. The Company estimated that the fair value of the DSUs on the date of grant was $5.1 million, which is being recognized on a graded vesting basis over the requisite service periods ending in February 2025. The Company used a risk neutral Monte Carlo simulation method in its valuation of the DSUs, which simulated the range of possible future values of the Company’s Class B common stock over the life of the DSUs. The weighted average grant date fair value per DSU was $27.20. At January 31, 2023, there was $4.2 million of total unrecognized compensation cost related to non-vested DSUs.

 

The Company had an existing equity incentive program in the form of DSUs that, upon vesting, entitled the grantees to receive shares of the Company’s Class B common stock. On January 5, 2022, the third and final vesting date under the program, the Company issued 301,296 shares of its Class B common stock in respect of DSUs that vested on that date.