Note 5 — Stock-Based
Compensation
In August 2021, the Board
of Directors of the Company approved the fiscal year 2022 Long Term
Incentive Plan (“2022 LTIP”) for the executive officers and other
members of management. The 2022 LTIP is an equity-based plan with a
grant date of September 1, 2021 and contains (a) a restricted
stock grant of 9,584 shares in the aggregate (of which 3,304
included a performance-based vesting component and were subject to
adjustment as discussed below), with a vesting date of August 31,
2024, and (b) options to purchase 12,942 shares of common stock in
the aggregate with an exercise price of $114.50 per share, vesting
in three equal annual installments ending on August 31, 2024.
Based on the fiscal year 2022 results, 842 shares of restricted
stock were forfeited subsequent to the end of fiscal year 2022 in
accordance with not meeting the performance measurement criteria.
No further performance-based measurements apply to this award.
In August 2022, the Board of Directors of the Company approved the
fiscal year 2023 Long Term Incentive Plan (“2023 LTIP”) for
executive officers and other members of management. The 2023 LTIP
is an equity-based plan with a grant date of September 1, 2022 and
contains the following equity components:
Restricted Shares — (a) a
performance and service-based restricted stock grant of 10,580
shares in the aggregate, subject to adjustment based on fiscal 2023
results, with a vesting date of August 31, 2025. Compensation expense is
recognized on a ratable basis over the vesting period based on
quarterly probability assessments; and (b) a time-based
restricted stock grant of 9,918 shares and 636 shares, with
a vesting date of August 31, 2025 and August 31, 2023,
respectively. Compensation expense is being recognized on a ratable
basis over the vesting period.
In addition to the 2023 LTIP, the Board of Directors approved a
retention grant with a grant date of September 1, 2022 of
time-based restricted stock of 10,015 shares in the aggregate. Out
of the 10,015 shares of granted time-based restricted stock, 2,056
shares are scheduled to vest on March 1, 2023, 3,705 shares are
scheduled to vest on September 1, 2023, 1,418 shares are scheduled
to vest on August 31, 2024, and 2,836 shares are scheduled to vest
on August 31, 2026. Compensation expense is being recognized on a
ratable basis over the vesting period.
Stock Options
— options to purchase
25,987 shares of common stock in the aggregate with an
exercise price of $88.16 per share. The options will
vest in three
equal annual installments beginning
on August 31, 2023 and ending on August 31, 2025. The
options will expire ten
years after the grant date.
Compensation expense is being recognized over the period of the
award consistent with the vesting terms.
In the second quarter of fiscal 2023,
restricted stock in the amount of 314 shares
was issued to a non-executive member of management and are
scheduled to vest on August 31, 2025. Additionally, options to
purchase in the amount of 791 shares
of common stock was awarded to a non-executive member of management
in the aggregate with an exercise price of $95.00 per
share. The options will vest in
three annual
installments beginning on August 31, 2023 and ending on August 31,
2025. The options will expire
ten years after the
grant date. Compensation expense is being recognized on a ratable
basis over the vesting period.
In the second quarter of fiscal 2023, restricted stock in the
amount of 1,486 shares related to the fiscal 2023 LTIP retention
grants were forfeited in conjunction with the termination of
employment of non-executive members of management of the
Company.
In February 2023, as part of their
standard compensation for board service, non-employee members of
the Board of Directors received a total grant of
7,824 shares of restricted stock for service for the
period from February 7, 2023 through February 1, 2024. The shares
of restricted stock will vest at the conclusion of this service
period. Compensation expense for restricted stock is being
recognized on a ratable basis over the
twelve-month vesting
period.