Shareholders' Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Shareholders' Equity

Stockholders’ Equity

Stock Repurchase

The Board has authorized two active stock repurchase programs for the Company. The Company may purchase shares on the open market from time to time. The Board must authorize the timing and amount of these purchases and all repurchases are in accordance with the rules and regulations of the SEC allowing the Company to repurchase shares from the open market.

Our open market repurchase programs are as follows:

Agreement Execution Date	Authorized Repurchase $	Expiration Date
March 5, 2019 1	$20 million	March 4, 2020
March 13, 2020	$20 million	November 9, 2022
November 3, 2022	$50 million	**2
1 The 2018 and 2019 purchase authorizations were executed under 10b5-1 programs.
2 Expiration Date is at Board's discretion. The Company is authorized to effectuate repurchases of the Company's common stock on terms and conditions approved in advance by the Board.

The Company repurchases shares of AAON stock from employees for payment of statutory tax withholdings on stock transactions. All other repurchases from directors or employees are contingent upon Board approval. All repurchases are done at current market prices.

Lastly, the Company also had a stock repurchase arrangement by which employee-participants in our 401(k) Plan were entitled to have shares of AAON stock in their accounts sold to the Company. The 401(k) Plan was amended in June 2022 to discontinue this program. No additional shares have been purchased by the Company under this arrangement since June 2022.

Our repurchase activity is as follows:

	2022					2021					2020
	(in thousands, except share and per share data)
Program	Shares	Total $		$ per share		Shares	Total $		$ per share		Shares	Total $		$ per share
Open market	122,112	$	6,823	$	55.87	—	$	—	$	—	103,689	$	4,987	$	48.10
401(k)	103,936	5,913		56.89		297,772	20,876		70.11		438,921	25,073		57.12
Directors & employees	17,228	1,019		59.15		22,526	1,590		70.59		23,272	1,169		50.23
Total	243,276	$	13,755	$	56.54	320,298	$	22,466	$	70.14	565,882	$	31,229	$	55.19

Our repurchase activity since Company inception, including our current authorized stock repurchase programs are as follows:

	Inception to Date
	(in thousands, except share and per share data)
Program	Shares	Total $		$ per share
Open market	4,327,367	$	81,616	$	18.86
401(k)	8,308,368	171,789		20.68
Directors & employees	2,044,955	23,360		11.42
Total	14,680,690	$	276,765	$	18.85

Dividends

At the discretion of the Board of Directors, we pay cash dividends. Board approval is required to determine the date of declaration and amount for each cash dividend payment.

Our cash dividends for the three years ended December 31, 2022 are as follows:

Declaration Date	Record Date	Payment Date	Dividend per Share
May 15, 2020	June 3, 2020	July 1, 2020	$0.19
November 10, 2020	November 27, 2020	December 18, 2020	$0.19
May 17, 2021	June 3, 2021	July 1, 2021	$0.19
November 9, 2021	November 26, 2021	December 17, 2021	$0.19
May 18, 2022	June 3, 2022	July 1, 2022	$0.19
November 8, 2022	November 28, 2022	December 16, 2022	$0.24

We paid cash dividends of $22.9 million, $19.9 million, and $19.8 million in 2022, 2021, and 2020, respectively.

Contingent Shares Issued in BASX Acquisition

On December 10, 2021, we closed on the acquisition of BASX (Note 4). Under the MIPA Agreement, we committed to $78.0 million in the aggregate of contingent consideration to the former owners of BASX, which is payable in approximately 1,037,000 shares of AAON stock, par value $0.004 per share. The shares do not accrue dividends.

Under the MIPA Agreement, the potential future issuance of the shares is contingent upon BASX meeting certain post-closing earn-out milestones during each of the years ended 2021, 2022, and 2023. We estimated the fair value of contingent consideration related to these shares to be approximately $60.0 million, which is included in additional paid-in capital on the consolidated balance sheets. As of December 31, 2022, 486,286 shares related to the 2021 earn-out milestone have been issued to the former owners of BASX as part of a private placement exempt from registration with the SEC under Rule 506(b), which are included in common stock on the consolidated statements of stockholders' equity. No additional shares have been issued as of February 22, 2023.