Note 14 - Common Stock

9 Months Ended

Jul. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

14. Common Stock

Each share of Class A Common Stock entitles its holder to

one

vote per share, and each share of Class B Common Stock generally entitles its holder to

ten

votes per share. The amount of any regular cash dividend payable on a share of Class A Common Stock will be an amount equal to

110%

of the corresponding regular cash dividend payable on a share of Class B Common Stock. If a shareholder desires to sell shares of Class B Common Stock, such stock must be converted into shares of Class A Common Stock at a

one

to

one

conversion rate.

On 

March 19, 2019,

the Company's stockholders approved at an annual meeting an amendment to our Certificate of Incorporation to effect a reverse stock split (the “Reverse Stock Split”) of the Company’s common stock at a ratio of

1

-for-

25,

and a corresponding decrease in the number of authorized shares of the common stock. Following the stockholders' approval, the Board of Directors, on

March 19, 2019,

determined to effectuate the Reverse Stock Split, which became effective on

March 29, 2019,

and every

25

issued shares (including treasury shares) of Class A Common Stock, par value

$0.01

per share (the “Class A Common Stock”), were combined into

one

share of Class A Common Stock, and every

25

issued shares (including treasury shares) of Class B Common Stock, par value

$0.01

per share (the “Class B Common Stock”), were combined into

one

share of Class B Common Stock.

No

fractional shares were issued in connection with the Reverse Stock Split. All share and per share amounts have been retroactively adjusted to reflect the reverse stock split.

On

August 

4,

2008,

our Board of Directors adopted a shareholder rights plan (the “Rights Plan”), which was amended on

January 11, 2018,

designed to preserve shareholder value and the value of certain tax assets primarily associated with net operating loss (NOL) carryforwards and built-in losses under Section 

382

of the Internal Revenue Code. Our ability to use NOLs and built-in losses would be limited if there was an “ownership change” under Section 

382.

This would occur if shareholders owning (or deemed under Section 

382

to own)

5%

or more of our stock increase their collective ownership of the aggregate amount of our outstanding shares by more than

50

 percentage points over a defined period of time. The Rights Plan was adopted to reduce the likelihood of an “ownership change” occurring as defined by Section 

382.

Under the Rights Plan,

one

right was distributed for each share of Class A Common Stock and Class B Common Stock outstanding as of the close of business on

August 

15,

2008.

Effective

August 

15,

2008,

if any person or group acquires

4.9%

or more of the outstanding shares of Class A Common Stock without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the voting power of such person or group. However, existing stockholders who owned, at the time of the Rights Plan’s initial adoption on

August 4, 2008,

4.9%

or more of the outstanding shares of Class A Common Stock will trigger a dilutive event only if they acquire additional shares. The approval of the Board of Directors’ decision to adopt the Rights Plan

may

be terminated by the Board of Directors at any time, prior to the Rights being triggered. The Rights Plan will continue in effect until

August 

14,

2021,

unless it expires earlier in accordance with its terms. The approval of the Board of Directors’ decision to initially adopt the Rights Plan and the amendment thereto were approved by shareholders. Our stockholders also approved an amendment to our Certificate of Incorporation to restrict certain transfers of Class A Common Stock in order to preserve the tax treatment of our NOLs and built-in losses under Section 

382

of the Internal Revenue Code. Subject to certain exceptions pertaining to pre-existing

5%

stockholders and Class B stockholders, the transfer restrictions in our Restated Certificate of Incorporation generally restrict any direct or indirect transfer (such as transfers of our stock that result from the transfer of interests in other entities that own our stock) if the effect would be to (i) increase the direct or indirect ownership of our stock by any person (or public group) from less than

5%

to

5%

or more of our common stock; (ii) increase the percentage of our common stock owned directly or indirectly by a person (or public group) owning or deemed to own

5%

or more of our common stock; or (iii) create a new “public group” (as defined in the applicable United States Treasury regulations). Transfers included under the transfer restrictions include sales to persons (or public groups) whose resulting percentage ownership (direct or indirect) of common stock would exceed the

5%

thresholds discussed above, or to persons whose direct or indirect ownership of common stock would by attribution cause another person (or public group) to exceed such threshold.

On

July 3, 2001,

our Board of Directors authorized a stock repurchase program to purchase up to

0.2

million shares of Class A Common Stock. There were

no

shares purchased during the

three

and

nine

months ended

July 31, 2019. 

As of

July 31, 2019,

the maximum number of shares of Class A Common Stock that

may

yet be purchased under this program is

22

thousand.