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Note 12 - Share-based Compensation

12 Months Ended

Nov. 30, 2020

Share-based Payment Arrangement [Text Block]

NOTE 12 – SHARE-BASED COMPENSATION

Share incentive awards include a stock option plan for directors, executives, employees and eligible consultants, a PSU plan for executives, employees, and eligible consultants and a DSU plan for non-executive directors of the Company. Options granted to purchase common shares have exercise prices not less than the fair market value of the underlying share at the date of grant. As of November 30, 2020, 27.3 million common shares were available for future share incentive plan awards under all three plans.

The Company recognized share-based compensation expense (see Note 11 - General and administrative) as follows:

	Years ended November 30,
	2020		2019		2018
Stock options	$	4,309	$	3,694	$	3,767
Performance share unit plan		2,547		2,320		3,783
Deferred share unit plan		201		162		177
	$	7,057	$	6,176	$	7,727

Stock options

Stock options granted under the Company’s share-based incentive plans generally expire five years after the date of grant and vest in one-third annual increments beginning on the first anniversary of the date of grant. The value of each option award is estimated at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected term of the option award and share price volatility. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination experience. Expected volatility is based on the historical volatility of the Company’s shares at the date of grant over the same length of term. These estimates involve inherent uncertainties and the application of management’s judgment. In addition, management estimates the expected forfeiture rate and only recognizes expense for those options expected to vest. As a result, if other assumptions had been used, the recorded share-based compensation expense would have been different from that reported.

A summary of stock options outstanding as of November 30, 2020, and activity during the year ended November 30, 2020 are as follows:

	Number of stock options (thousands)			Weighted- average exercise price per share		Weighted- average remaining contractual term (years)		Aggregate intrinsic value
November 30, 2019		12,527		$	3.98
Granted		1,781			7.27
Exercised		(3,905	)		3.96
November 30, 2020		10,403		$	4.59		2.32	$	56,113
Vested and exercisable as of November 30, 2020		5,722		$	4.18		1.62	$	33,146

The following table summarizes other stock option-related information:

	Years ended November 30,
	2020			2019			2018
Weighted-average assumptions used to value stock option awards:
Expected volatility		46.1	%		46.9	%		50	%
Expected term of options (years)		4			4			3
Expected dividend rate		—			—			—
Risk-free interest rate		1.5	%		2.7	%		1.8	%
Expected forfeiture rate		3.1	%		3.1	%		2.3	%
Weighted-average grant-date fair value	$	2.70		$	1.46		$	1.35
Intrinsic value of options exercised	$	24,137		$	20,527		$	3,744
Cash received from options exercised	$	—		$	—		$	—

As of November 30, 2020, the Company had $2,642 of unrecognized compensation cost related to 4,681,000 non-vested stock options expected to be expensed and vest over a period of approximately two years.

Performance share units

The Company has a PSU plan that provides for the issuance of PSUs in amounts as approved by the Company’s Compensation Committee. Each PSU award entitles the participant to receive one common share of the Company at the end of a specified period. The Compensation Committee may adjust the number of common shares for the achievement of certain performance and vesting criteria established at the time of grant. The actual performance against each of these criteria generates a multiplier that varies from 0% to 150%. Thus, the common shares that may be issued vary between 0% and 150% of the number of PSUs granted, as reduced by the amounts for participants no longer with the Company on the vesting date.

The value of each PSU granted is estimated at the grant date using a Monte Carlo simulation model. The Monte Carlo simulation model requires the input of subjective assumptions, including the share price volatility of the Company’s stock, as well as comparator index and the correlation of returns between the comparator index and the Company. Expected volatility is based on the historical volatility of the Company’s shares and the comparator index at the grant date. These estimates involve inherent uncertainties and the application of management’s judgment. As a result, if other assumptions had been used, our recorded share-based compensation expense would have been different from that reported.

A summary of PSU awards outstanding and activity during the year ended November 30, 2020 are as follows:

	Number of PSU awards (thousands)			Weighted- average grant day fair value per award		Aggregate intrinsic value
November 30, 2019		1,664		$	3.76
Granted		452			6.97
Vested		(648	)		3.85
Performance adjustment		216			3.85
November 30, 2020		1,684		$	4.59	$	24,107

As of November 30, 2020, the Company had 1,684,000 non-vested PSU awards outstanding of which 431,800 were fully expensed and vested on December 1, 2020 with a multiplier of 150%. The remaining 1,252,200 non-vested PSU awards with $3,144 of unrecognized compensation cost will be expensed over a period of approximately two years.

The following table summarizes other PSU-related information:

	Years ended November 30,
	2020			2019			2018
Performance multiplier on PSUs vested		150	%		82	%		—	%
Common shares issued (thousands)		648			438			—
Total fair value of common shares issued	$	2,855		$	1,607		$	—
Withholding tax paid on PSUs vested	$	1,652		$	1,197		$	—

Deferred share units

The Company has a DSU plan that provides for the issuance of DSUs in amounts where the Directors receive half of their annual retainer in DSUs and have the option to elect to receive all or a portion of the other half of their annual retainer in DSUs. Each DSU entitles the Directors to receive one common share when they retire from the Company. The Company granted 21,602, 35,851 and 45,103 DSUs to Directors with a weighted-average grant day fair value of $9.07, $4.40 and $4.07 per DSU during 2020, 2019 and 2018, respectively. The Company issued nil, 31,721 and 98,160 common shares under the DSU plan in 2020, 2019 and 2018, respectively. As of November 30, 2020, there were 280,364 DSUs outstanding.