12.
Stock-based compensation (continued)
Stock option and restricted stock activity (continued)
Restricted stock (continued)
Grants
In October 2023, the Company
awarded
333,080
shares of restricted stock with time-based
vesting conditions to approximately
150
employees, which
are subject to
the employees
continued employment
with the
Company through
the applicable
vesting dates.
The Company also awarded
225,000
shares of restricted stock
to an executive officer
in October 2023, which
vest on June 30, 2025,
except if the
executive officer is
terminated for cause,
in which case
the award will
be forfeited.
In January 2024,
the Company awarded
56,330
shares of restricted stock with time-based vesting conditions to an employee.
In October 2023, the Company
awarded
310,916
shares of restricted stock to
three
of its executive officers
which are subject to
a
time-based
vesting
condition
and
a
market
condition
and
vest
in
full
only
on
the
date,
if
any,
that
the
following
conditions
are
satisfied: (1)
a compounded
annual
10
% appreciation
in the
Company’s
stock price
off a
base price
of $
4.00
period commencing on September 30, 2023 through November 17, 2026, and (2) the recipient is employed by the Company on a full-
time basis when the condition in (1) is met. If either of these conditions is not satisfied, then none of the shares of restricted stock will
vest and they will be forfeited. The Company’s
closing price on September 30, 2023, was $
3.90
.
The appreciation levels (times and price) and vesting percentages as of each
period ended are as follows:
●
Prior to the first anniversary of the grant date:
0
%;
●
Fiscal
2025,
the
Company’s
30-day
volume
weighted-average
stock
price
(“VWAP”)
before
November
17,
2024
is
approximately
1.10
4.40
4.00
:
33
%;
●
Fiscal 2026, the Company’s
VWAP before
November 17, 2025 is
1.21
4.84
4.00
:
67
%;
●
Fiscal 2027, the Company’s
VWAP before
November 1, 2026 is
1.33
5.32
) than $
4.00
:
100
%.
The fair value
of these shares
of restricted
stock was calculated
using a Monte
Carlo simulation. In
scenarios where
the shares
do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share
price on
vesting date.
In its calculation
of the
fair value
of the
restricted stock,
the Company
used an
equally weighted
volatility of
48.3
% for
the closing
price (of
$
4.37
), a
discounting based
on U.S.
dollar overnight
indexed swap
rates for
the grant
date, and
no
future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log
prices for the
three years
preceding the grant date.
In July 2022,
December 2022 and January
2023, the Company
awarded
32,582
,
430,399
, and
11,806
shares of restricted stock,
respectively,
to
employees
and
an
executive
officer
which
have
time-based
vesting
conditions.
In
December
2022,
the
Company
awarded
257,868
shares
of
restricted
stock
to
executive
officers
which
contained
time
and
performance-based
(market
conditions
related to share price performance) vesting conditions. The Company also agreed to match, on a
one
-for-one basis, (1) an employee’s
1.0
million worth of
the Company’s
shares of common
stock in open
market purchases,
and in August
2022, the
Company granted
179,498
shares of restricted stock to the employee, and (2) another employee’s purchase of up to
150,000
the Company’s common stock, and
in November 2022,
the Company granted
150,000
shares of restricted
stock to the
employee. These
shares of
restricted
stock contain
time-based
vesting
conditions. The
Company
awarded
300,000
shares to
an executive
officer
on
December 31, 2022, which vested on the date of the award.
The
257,868
shares of restricted stock
awarded to executive officers
are subject to a
time-based vesting condition
and a market
condition and vest
in full only
on the date,
if any, that the
following conditions are
satisfied: (1) a
compounded annual
10
% appreciation
in
the
Company’s
stock
price
off
a
base
price
of
$
4.94
over
the
measurement
period
commencing
on
December
1,
2022
through
December 1, 2025, and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is
met. If either of
these conditions is not satisfied, then none of the shares of
restricted stock will vest and they will be
forfeited. The Company’s closing
price on December 1, 2022, was $
4.08
.
The appreciation levels (times and price) and vesting percentages as of each
period ended are as follows:
●
Prior to the first anniversary of the grant date:
0
%;
●
Fiscal 2024, stock price as of December 1, 2023 is
1.1
5.43
4.94
:
33
%;
●
Fiscal 2025, stock price as of December 1, 2024 is
1.21
5.97
4.94
:
67
%;
●
Fiscal 2026, stock price as of December 1, 2025 is
1.331
6.57
) than $
4.94
:
100
%.
The fair value
of these shares
of restricted
stock was calculated
using a Monte
Carlo simulation. In
scenarios where
the shares
do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share
price on
vesting date.
In its calculation
of the
fair value
of the
restricted stock,
the Company
used an
equally weighted
volatility of
50.1
% for
the closing
price (of
$
4.08
), a
discounting based
on U.S.
dollar overnight
indexed swap
rates for
the grant
date, and
no
future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log
prices for the three years preceding the grant date.