Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stock Repurchases

The Board has authorized one active stock repurchase program 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:

Effective Date	Authorized Repurchase $	Expiration Date
March 13, 2020	$20 million	November 9, 2022
November 3, 2022	$50 million	** 1
1 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, Inc. 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) savings and investment plan were entitled to have shares in AAON, Inc. 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:

	Three Months Ended
	March 31, 2023					March 31, 2022
	(in thousands, except share and per share data)
Program	Shares	Total $		$ per share		Shares	Total $		$ per share
Open market	—	$	—	$	—	—	$	—	$	—
401(k)	—	—		—		54,305	3,278		60.36
Directors and employees	11,673	1,030		88.24		13,358	804		60.19
Total	11,673	$	1,030	$	88.24	67,663	$	4,082	$	60.33

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

	Inception to			March 31, 2023
	(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 and employees	2,056,628	24,390			11.86
Total	14,692,363	$	277,795		$	18.91

Dividends

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

Our recent cash dividends are as follows:

Declaration Date1	Record Date	Payment Date	Dividend per Share	Annualized Dividend per Share
May 18, 2022	June 3, 2022	July 1, 2022	$0.19	$0.38
November 8, 2022	November 28, 2022	December 16, 2022	$0.24	$0.48
March 1, 2023	March 13, 2023	March 31, 2023	$0.12	$0.48
1 Effective with the cash dividend declared on March 1, 2023 (paid on March 31, 2023), the Company moved from semi-annual cash dividends to quarterly cash dividends.

Contingent Shares Issued in BASX Acquisition

In December 2021, we closed on the acquisition of BASX. 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 the Company's common 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. Based on the final allocation of the consideration paid, 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 March 31, 2023, 389,013 shares and 486,268 shares related to the earn-out milestones for the years ended 2022 and 2021, respectively, have been issued to the former owners of BASX as private placements 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 May 2, 2023.