| Benefit Plans |
Note 17. Benefit Plans Long-Term Incentive Plans The Company’s Board of Directors (the “Board”) and its Compensation and Leadership Development Committee periodically approve Long-Term Incentive Plans which include performance-based awards tied to the Company’s common stock price as well as time-vesting awards. None of the awards granted as part of Long-Term Incentive Plans include any dividend equivalent or other stockholder rights. To the extent the awards are earned, they may be settled in shares or cash of an equivalent value at the Company’s option. Long-Term Incentive Plan Awards for Fiscal Year 2025: On December 30, 2024, the Board and its Compensation and Leadership Development Committee approved certain awards to be made under the Company’s Long-Term Incentive Plan (the “LTI Plan”) for fiscal year 2025. The LTI Plan is a sub-plan consisting of awards made under the Company’s 2018 Omnibus Incentive Plan (as amended and restated from time to time, the “2018 Omnibus Incentive Plan”). The participants in the LTI Plan are members of senior management. The awards under the LTI Plan consist of two components: | 1) | Relative Total Shareholder Return (“TSR”) Performance Share Units (“PSU”). The PSUs granted during the six months ended April 30, 2025 will be earned over the performance period ending on October 31, 2027, but will remain subject to a continued service-based vesting requirement until the third anniversary of the date of grant. The performance measure for the relative TSR PSUs is the TSR of the Company relative to the TSR of the Russell 2000 from October 31, 2024 through October 31, 2027. The Compensation and Leadership Development Committee established the performance assessment criteria for the relative TSR PSUs as the TSR of the Company relative to the TSR of the Russell 2000, with the award calibration being 100% plus or minus 0.5x the difference between the Company’s TSR and the Russell 2000 Index composite TSR. The award is capped at 200% of the target number of PSUs, and the award is further capped at 100% of the target number of PSUs if the Company’s absolute TSR over the performance period is negative. The Company’s TSR is calculated by subtracting the Company’s beginning stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2024) from the ending stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2027), adding any dividends during the period, and then dividing the result by the Company’s beginning stock price. Given that the performance period is still open, the Company has reserved shares equal to 200% of the target number of PSUs, subject to performance during the remaining performance period as well as vesting based on continued service until December 30, 2027 (the third anniversary of the grant date). A portion of the PSUs awarded during the six months ended April 30, 2025 may be settled in cash in lieu of shares if actual performance achieved with respect to the PSUs is such that the number of PSUs earned exceeds the number of shares then available under the 2018 Omnibus Incentive Plan. |
| 2) | Time-vesting Restricted Stock Units (“RSU”). The time-vesting RSUs granted during the six months ended April 30, 2025 will vest at a rate of one-half of the total number of RSUs on each of the first two anniversaries of the date of grant. |
On December 30, 2024, 186,507 PSUs and 186,501 time-based vesting RSUs were awarded to senior management under the LTI Plan. PSUs are issued assuming participants achieve 100% target performance. The Company also reserves additional shares assuming the maximum performance targets are met. A portion of the PSUs awarded during the six months ended April 30, 2025 may be settled in cash in lieu of shares if actual performance achieved with respect to the PSUs is such that the number of PSUs earned exceeds the number of shares then available under the 2018 Omnibus Incentive Plan. In addition to the awards granted to senior management, during the six months ended April 30, 2025, the Board also granted a total of 288,690 time-based vesting RSUs to certain salaried employees and 16,047 time-based vesting RSUs to certain hourly employees to promote ownership of the Company’s equity and retention. The time-based vesting RSUs granted during the six months ended April 30, 2025 vest at a rate of one-half of the total number of RSUs granted on each of the first two anniversaries of the date of grant. Share-Based Compensation Share-based compensation was reflected in the Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): | | | | | | | | | | | | | | | Three Months Ended April 30, | | Six Months Ended April 30, | | | 2025 | | 2024 | | 2025 | | 2024 | Cost of revenues | | $ | 269 | | $ | 339 | | $ | 413 | | $ | 736 | Administrative and selling expense | | | 4,269 | | | 2,148 | | | 6,129 | | | 4,195 | Research and development expense | | | 219 | | | 417 | | | 324 | | | 778 | | | $ | 4,757 | | $ | 2,904 | | $ | 6,866 | | $ | 5,709 |
Restricted Stock Units Including Performance Share Units The following table summarizes our RSU activity for the six months ended April 30, 2025: | | | | | | | Restricted Stock Units | | | Shares | | Weighted-Average Fair Value | Outstanding as of October 31, 2024 | | | 516,561 | | $ | 64.53 | Granted - time-vesting RSUs | | | 491,238 | | | 8.17 | Granted - PSUs | | | 186,507 | | | 14.38 | Vested | | | (126,704) | | | 69.35 | Forfeited | | | (58,142) | | | 51.86 | Outstanding as of April 30, 2025 | | | 1,009,460 | | $ | 27.23 |
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