XML 40 R23.htm IDEA: XBRL DOCUMENT

Note 14 - Stock-based Compensation

12 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

14. Stock Based Compensation

In accordance with the 2020 Equity Incentive Plan, the Company may issue eligible employees options to purchase shares of the Company’s common stock, restricted stock units and other equity incentives, which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues common stock to participating employees pursuant to an employee stock purchase plan, and may issue common stock awards and deferred restricted stock units to members of its Board of Directors in accordance with its Board of Directors compensation program.

2020 Equity Incentive Plan

In accordance with the 2020 Equity Incentive Plan (the “2020 Plan”), the Company may grant employees (i) restricted stock and other stock-based awards, (ii) nonqualified stock options, and (iii) options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code. All employees of the Company or any affiliate of the Company, independent directors, consultants and advisors are eligible to participate in the 2020 Plan. The 2020 Plan provides for the issuance of an aggregate of 2,800,000 shares of common stock, including 2,500,000 shares reserved for issuance pursuant to the 2020 Plan, and up to 300,000 additional shares which may be issued pursuant to the 2020 Plan if outstanding awards granted under the Company’s previous 2000 Plan or the Company’s previous 2015 Plan are forfeited, expire or are cancelled.

The following table reflects stock-based compensation expense recorded during the fiscal years ended September 30, 2024, 2023 and 2022 (in thousands):

		*Year Ended September 30,*
		*2024*				*2023*				*2022*
Restricted stock units		$	13,222			$	8,027			$	10,597
Employee stock purchase plan			1,245				1,349				1,846
Total stock-based compensation expense for continuing and discontinued operations		$	14,467			$	9,376			$	12,443
Income tax benefit			(2,025	)			(1,406	)			(1,929	)
Total compensation expense included in the statement of operations		$	12,442			$	7,970			$	10,514

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the fiscal year ended September 30, 2024:

						*Weighted*
						*Average*
		*Shares*				*Grant Date*
		(in thousands)				*Fair Value*
Outstanding as of September 30, 2023			718,954			$	67.40
Granted			665,893			$	55.15
Vested			(182,895	)		$	68.23
Forfeited			(437,841	)		$	61.94
Outstanding as of September 30, 2024			764,111			$	59.65

The fair value of restricted stock units vested during fiscal years 2024, 2023 and 2022 was $10.2 million, $14.8 million, and $66.9 million, respectively. As of September 30, 2024, the future unrecognized stock-based compensation expense related to restricted stock units expected to vest is $19.1 million and is expected to be recognized over an estimated weighted average amortization period of 1.5 years.

The following table reflects restricted stock units and stock awards granted during fiscal years ended September 30, 2024, 2023 and 2022:

		*Year Ended September 30,*
		*2024*				*2023*				*2022*
Time-based restricted stock units			282,268				311,609				120,066
Common stock awards			—				—				18,471
Performance-based restricted stock units			383,625				278,457				111,148
Total units			665,893				590,066				249,685

Time-Based Restricted Stock Unit Grants

Restricted stock units granted with a required service period typically have three-year vesting schedules in which one-third of awards vest at each annual anniversary of grant date, subject to the award holders meeting service requirements.

Certain members of the Board of Directors have elected to defer receiving their annual stock awards and related quarterly dividends, if any, until they attain a certain age or cease to provide services as a member of the Company’s Board of Directors. Annual deferred stock awards granted during fiscal years 2024, 2023, and 2022 vested upon issuance.

Performance-Based Restricted Stock Unit Grants

Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Human Resources and Compensation Committee and approved by the Board of Directors. The criteria for performance-based awards are weighted and have threshold, target and maximum performance goals. Performance-based restricted stock units may also have a required service period following the achievement of all or a portion of the performance goals.

Performance-based restricted stock unit awards granted in fiscal year 2024, 2023 and 2022 allow participants to earn 100% of restricted stock units if the Company’s performance meets or exceeds its target goal for each applicable financial metric, and up to a maximum of 200% if the Company’s performance for such metrics meets or exceeds the maximum or stretch goal. Performance below the minimum threshold for each financial metric results in award forfeiture. Performance goals are measured over a three-year period for each year’s restricted stock unit awards and at the end of the period to determine the number of restricted stock units earned, if any, by recipients who continue to meet the service requirement. Upon the third anniversary of each year’s restricted stock unit awards’ grant date, the Company’s Board of Directors determines the number of restricted stock units earned for participants who continue to meet the service requirements on the vest date.

In October 2023, the Company’s Board of Directors approved an amendment to the performance goals associated with the previously issued performance-based restricted stock units for all impacted employees, excluding members of the Company’s executive team. The performance goals, as amended, are more reflective of the current macroeconomic environment and consideration toward employee retention in the competitive life sciences industry. Before the amendment, the original performance goals were not expected to be satisfied. Subsequent to the amendment, vesting became probable based on the forecasted achievement of the amended performance goals. The amendment of these restricted stock units is treated as a modification with the total potential maximum compensation cost of $4.1 million recognized over the service period through November 2025. The Company recorded expense of $1.2 million during the fiscal year ended September 30, 2024 related to the modified awards.

Awards Granted to the Board of Directors

The stock-based compensation granted to members of the Company’s Board of Directors includes common stock awards, restricted stock unit awards and deferred common stock and restricted stock unit awards.

Employee Stock Purchase Plan

The Company maintains an employee stock purchase plan that allows its employees to purchase shares of common stock at a price equal to 85% of the fair market value of the Company’s stock at the beginning or the end of the semi-annual offering period, whichever is lower. On February 8, 2017, the stockholders approved the 2017 Employee Stock Purchase Plan (the “2017 Plan”). The 2017 Plan allows for purchases by employees of up to 1,250,000 shares of the Company’s common stock. As of September 30, 2024, 513,634 shares of common stock remain available for purchase under the 2017 Plan. During the fiscal years ended September 30, 2024, 2023 and 2022, the Company issued 72,787 shares, 83,715 shares, and 82,035 shares respectively, under the 2017 Plan.

Valuation Assumptions for an Employee Stock Purchase Plan

The fair value of shares issued under the employee stock purchase plan is estimated on the commencement date of each offering period using the Black-Scholes option-pricing model with the following weighted average assumptions for the fiscal years ended September 30, 2024, 2023 and 2022:

		*Year Ended September 30,*
		*2024*				*2023*				*2022*
Risk-free interest rate			5.3	%			5.2	%			1.7	%
Volatility			47	%			57	%			49	%
Expected life			6 months				6 months				6 months
Dividend yield			—	%			—	%			—	%

The risk-free rate is based on the U.S. Treasury yield curve for notes with terms approximating the expected life of the shares granted. The expected stock price volatility is determined based on the Company’s historic stock prices over a period commensurate with the expected life of the shares granted. The expected life represents the weighted average period over which the shares are expected to be purchased. Dividend yields are projected based on the Company’s history of dividend declarations and management’s intention for future dividend declarations.