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Equity
 9 Months Ended
Apr. 30, 2023
Equity:  
Equity

Note 12—Equity

 

Stock Issued to Certain Executive Officers for Bonus Payments

 

In the nine months ended April 30, 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.

 

2022 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 deferred stock units (“DSUs”) that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. In the nine months ended April 30, 2023, the Company granted an aggregate of 193,225 DSUs to certain of its executive officers and other employees. 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 base 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 initial grants under this program). On May 17, 2023, the first vesting date under the program, in accordance with the program and based on certain elections made by grantees, the Company issued 41,945 shares of its Class B common stock for vested DSUs. Based on those elections, vesting for 30,909 DSUs was delayed until February 21, 2024. Subject to continued full time employment or other service to the Company, the remaining DSUs are scheduled to vest on February 21, 2024 and February 25, 2025. The grantees will have the right to elect a later vesting date 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 February 21, 2024 and any DSUs that do not vest based on the grantee’s election, will be eligible to vest on February 25, 2025. The Company estimated that the fair value of the DSUs on the date of grants was an aggregate of $5.2 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 April 30, 2023, there was $2.9 million of total unrecognized compensation cost related to non-vested DSUs.

 

2019 Deferred Stock Units Equity Incentive Program 

 

The Company had a prior 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.

 

Stock Option and Incentive Plan—Other

 

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 nine months ended April 30, 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. In the nine months ended April 30, 2022, the Company received cash from the exercise of stock options of $0.1 million, for which the Company issued 10,000 shares of its Class B common stock. In addition, in April 2022, Howard S. Jonas exercised stock options for 1.0 million shares of the Company’s Class B common stock that were granted on May 2, 2017. The exercise price of these options was $14.93 per share and the expiration date was May 1, 2022. Mr. Jonas used 528,635 shares of the Company’s Class B common stock with a value of $14.9 million to pay the aggregate exercise price of the options. Mr. Jonas tendered 137,364 shares of the Company’s Class B common stock with a value of $3.9 million to satisfy a portion of his tax obligations in connection with his stock option exercises.

 

 

In the nine months ended April 30, 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. In addition, in the nine months ended April 30, 2023, the Company granted 16,000 restricted shares of its Class B common stock to an executive officer. The Company estimated that the grant date fair value of the shares was $0.3 million, which is being recognized on a straight-line basis over the remaining vesting period that ends in February 2025.

 

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 nine months ended April 30, 2023, the Company repurchased 280,130 shares of its Class B common stock for an aggregate purchase price of $7.5 million. There were no repurchases under the program in the nine months ended April 30, 2022. At April 30, 2023, 4.9 million shares remained available for repurchase under the stock repurchase program.

 

In the nine months ended April 30, 2023 and 2022, the Company paid $0.3 million and $9.0 million, respectively, to repurchase 13,547 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 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.