• Filing Date: 2020-06-12
  • Form Type: 10-Q
  • Description: Quarterly report
v3.20.1
Stock-Based Compensation
9 Months Ended
Apr. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation

Note 6—Stock-Based Compensation

 

2016 Stock Option and Incentive Plan

 

On November 7, 2019, our Board of Directors amended the Company's 2016 Stock Option and Incentive Plan (as amended to date, the "2016 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 230,000 shares, to an aggregate of 1,271,000 shares. This amendment was ratified by the Company's stockholders at the Annual Meeting of Stockholders held on January 13, 2020. At April 30, 2020, there were 295,000 shares of Class B Stock available for awards under the 2016 Incentive Plan.

 

The exercise prices of options granted pursuant to the 2016 Incentive Plan must not equal to or greater than the Fair Market Value of the shares of Class B Stock covered by the option award on the date of grant. In general, Fair Market Value means the closing sale price per share of Class B Stock on the exchange on which the Class B Stock is principally traded for the last preceding date on which there was a sale of Class B Stock on such exchange.

 

Stock Options  

 

On October 18, 2017, the Compensation Committee of our Board of Directors approved the grant of options to purchase an aggregate of 124,435 shares of Class B Stock to 55 non-executive employees. The options vest over a three-year period from December 8, 2017. On the grant date, unrecognized compensation expense related to this grant was an aggregate of $159,000 based on the estimated fair value of the options on the grant date. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period.

 

In fiscal 2019, the Compensation Committee approved two equity grants of options to purchase an aggregate of 27,493 shares of Class B Stock to 6 non-executive employees. The options vest over a three-year period. Unrecognized compensation expense related to this grant was an aggregate of $33,000 based on the estimated fair value of the options on the grant dates. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period.

 

On November 7, 2019 and January 13, 2020, the Compensation Committee approved two equity grants of options to purchase an aggregate of 180,996 shares of Class B Stock to four employees and one consultant. The options vest over a three-year period. Unrecognized compensation expense related to these grants was an aggregate of $242,000 based on the estimated fair value of the options on the grant dates. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period.

 

At April 30, 2020, unrecognized compensation expense related to unvested stock options was an aggregate of $221,000.

 

Deferred Stock Units  

 

On August 28, 2019, the Compensation Committee approved the grant of 90,000 Deferred Stock Units (DSUs) to 11 of its non-executive employees based in Norway and Lithuania. Each DSU represents a right to receive one share of Class B Common Stock. The DSUs vest over a four-year period from August 1, 2019. On the grant date, unrecognized compensation expense related to this grant was an aggregate of $139,000 based on the estimated fair value of the DSUs on the grant date. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period. At April 30, 2020, unrecognized compensation expense related to unvested DSUs was an aggregate of $86,000.

 

Restricted Stock Awards

 

On February 7, 2018, the Compensation Committee and the Corporate Governance Committee of our Board of Directors approved a grant of 108,553 restricted shares of Class B Common Stock to our Executive Chairman Michael Jonas. Mr. Jonas agreed to accept all of his compensation for his service as Executive Chairman during fiscal 2018 in the form of equity in the Company and to make receipt of such equity compensation contingent on the Company achieving certain milestones relative to its fiscal 2018 budget. The grant was made at the time that the milestones previously set were achieved. Two-thirds of the shares have vested and the remaining shares vest on February 7, 2021. These shares had an aggregate grant date fair value of $330,000 which is being amortized on a straight-line basis over the vesting period. Additionally, on November 7, 2019, Mr. Jonas received 1,411 restricted shares of the Company's Class B common stock to vest in substantially equal amounts on November 7, 2020, 2021 2022. At April 30, 2020, unrecognized compensation expense related to unvested restricted stock was an aggregate of $85,000.

 

On November 7, 2019, the Compensation Committee approved a grant of 30,534 restricted shares of Class B Common Stock to Mr. Elliot Gibber, our Interim Chief Executive Officer in respect of his service in that capacity through the remainder of Fiscal 2020 (or such shorter period as he shall serve in that capacity), 15,267 shares of which vested on February 7, 2020 and the remainder will vest on May 7, 2020. These shares had an aggregate grant date fair value of $60,000 which is fully amortized as of April 30, 2020.

 

In connection with the Freeform acquihire in September 2017, the Company granted a total of 192,953 restricted shares of Class B Common Stock to former Freeform employees, which vest over a four-year period subject to continued employment. These shares had an aggregate grant date fair value of $369,000 which is being amortized on a straight-line basis over the vesting period. At April 30, 2020, unrecognized compensation expense related to unvested restricted stock was an aggregate of $91,000.

 

For the nine months ended April 30, 2020 and 2019, we purchased 18,441 shares and 14,137 shares respectively of Class B Stock from former Freeform employees for $29,072 and $30,543 respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock.