Quarterly report pursuant to Section 13 or 15(d)

Note 15 - Stock-based Compensation

v3.19.2
Note 15 - Stock-based Compensation
 6 Months Ended
Apr. 30, 2019
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
Note
15.
Stock-Based Compensation
Successor
 
The Company rolled forward certain vested options from the Predecessor (see discussion below) to
2,783,479
equivalent vested options in the Successor.
No
incremental compensation costs were recognized on conversion as the fair value of the options issued were equivalent to the fair value of the vested options of the Predecessor. Exercise prices for those options range from
$0.87
to
$6.09.
 
In
April 2019,
pursuant to the Concrete Pumping Holdings, Inc.
2018
Omnibus Incentive Plan, the Company granted stock awards to certain employees in the United States and United Kingdom. All awards in the United States are restricted stock awards while awards granted to employees in the United Kingdom are stock options with exercise prices of
$0.01.
Regardless of where the awards were granted, the awards vest pursuant to
one
of the following
four
conditions:
 
 
1.
Time-based only – Awards vest in equal installments over a
five
-year period
 
2.
$13
market-based and time-based vesting – Awards will vest as to
first
condition once the Company’s stock reaches a closing price of
$13.00
for
30
consecutive days. Once the
first
vesting condition is achieved, the stock award will then vest
1/3
annually over a
three
-year period.
 
3.
$16
market-based and time-based vesting – Awards will vest as to
first
condition once the Company’s stock reaches a closing price of
$16.00
for
30
consecutive days. Once the
first
vesting condition is achieved, the stock award will then vest
1/3
annually over a
three
-year period.
 
4.
$19
market-based and time-based vesting – Awards will vest as to
first
condition once the Company’s stock reaches a closing price of
$19.00
for
30
consecutive days. Once the
first
vesting condition is achieved, the stock award will then vest
1/3
annually over a
three
-year period.
 
Included in the table below is a summary of the awards granted, including the location, type of award, fair value of awards, and the date that expense will be recognized through. In accordance with ASC
718,
the market-based awards were assigned the fair values in the table below using a Monte Carlo simulation model.  In addition, while the table below provides a date through which expense will be recognized on a straight-line basis, if at such time these market-based stock awards vest under both vesting conditions, expense recognition will be accelerated. During the quarter ended
April 30, 2019,
we recognized
$0.4
million in expense related to these stock awards.
 
Location
  
Type of Award
  
Shares Awarded
    
Individual Fair
Value of Awards
    
Total Fair Value of Awards
  
Date Expense will be
Recognized Through
(Straight-Line Basis)
  
US
  
Time Based Only
    
1,156,630
     $
6.67
     $
7,714,722
  
12/6/2023
  
US
  
$13 Market/Time- Based
    
1,543,044
     $
4.47
     $
6,904,032
  
5/4/2024
  
US
  
$16 Market/Time- Based
    
1,543,044
     $
3.85
     $
5,940,038
  
8/27/2024
  
US
  
$19 Market/Time- Based
    
1,543,091
     $
3.34
     $
5,149,194
  
11/19/2024
  
UK
  
Time Based Only
    
164,744
     $
6.67
     $
1,098,842
  
12/6/2023
  
UK
  
$13 Market/Time- Based
    
238,808
     $
4.46
     $
1,066,272
  
5/4/2024
  
UK
  
$16 Market/Time- Based
    
238,808
     $
3.84
     $
917,096
  
8/27/2024
  
UK
  
$19 Market/Time- Based
    
238,833
     $
3.33
     $
794,772
  
11/19/2024
  
Total
  
 
6,667,002
   
 
 
 
  
$
29,584,968
  
 
  
 
 
Predecessor
 
The Predecessor accounted for share-based awards in accordance with ASC Topic
718
Compensation–Stock Compensation
(“ASC
718”
), which requires the fair value of stock-based compensation awards to be amortized as an expense over the vesting period. Stock-based compensation awards are valued at fair value on the date of grant. As a result of the Business Combination, the acceleration clause within the original award agreements was triggered and all unvested awards immediately vested, resulting in an amount of
$0.6
million of stock-based compensation expense presented “on the line” (see Note
4
- Business Combinations). Stock-based compensation for the Predecessor period from
November 1, 2018
to
December 5, 2018
totaled
$0.1
million, and has been included in general and administrative expenses on the accompanying consolidated statements of income.