Common Stock and Stock Compensation

12 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

NOTE 10: COMMON STOCK AND STOCK COMPENSATION

Common Stock Repurchase Program

In December 2019, our Board of Directors (the "Board") authorized the repurchase of up to $60.0 million of our Class A Common Stock over three years. Repurchases under the program were suspended in March 2020 in order to preserve liquidity as a result of uncertainties regarding the COVID-19 pandemic, and no share repurchases under the program were executed for the remainder of fiscal 2020. Through March 2020, we repurchased and retired 943,149 shares of our Class A Common Stock for $5.2 million, which amount was allocated between "Additional paid-in capital" and "Retained earnings" in our consolidated balance sheets.

Stock Compensation

On May 1, 2010 our Board of Directors approved the adoption of the EZCORP, Inc. 2010 Long-Term Incentive Plan (the “LTI Plan”). The LTI Plan permits grants of options, restricted stock awards and stock appreciation rights covering up to 5,485,649 shares of our Class A Common Stock plus any shares that become available for issuance under either the LTI Plan or prior plans as a result of forfeitures or cancellations of awards without delivery of shares or as a result of withholding shares to satisfy tax withholding obligations. In December 2017 and November 2018, the Board of Directors and the voting stockholder approved the addition of 1,100,000 and 400,000 shares, respectively, to the LTI Plan.

The purpose of our LTI Plan is to retain the services of valued employees and directors and to incentivize such persons to make contributions to our company and motivate excellent performance. Under the LTI Plan, we grant awards of restricted stock or restricted stock units to employees and non-employee directors. Awards granted to employees are typically subject to performance and service conditions. Awards granted to non-employee directors are time-based awards subject only to service conditions. Awards are measured at the grant date fair value with compensation costs associated with the awards recognized over the requisite service period, usually the vesting period, on a straight-line basis.

In November 2019 and May 2020, we granted 222,912 and 12,346, respectively, shares of restricted stock to our non-employee directors with a grant date fair value of $4.89 and $5.24, respectively. These awards vested on September 30, 2020 and were subject only to service conditions.

In December 2017, we granted 1,308,533 restricted stock awards to employees and 84,250 restricted stock awards to non-employee directors with a grant date fair value of primarily $9.75 per share. The awards granted to non-employee directors vested on September 30, 2018 and were subject only to service conditions. For the awards granted to employees, 190,725 vested on September 30, 2018. In November 2020, the People and Compensation Committee of the Board of Directors determined that the performance targets for the remaining employee awards were partially achieved, and 446,983 of such awards will vest on December 14, 2020. In addition, 81,896 awards were canceled, resulting in a reversal of $0.80 million of previously recognized stock compensation expense.

In July 2019 and November 2018, we granted 61,138 and 971,615, respectively, restricted stock awards to employees with a grant date fair value of primarily $10.04 and $9.18 per share, respectively. In November 2020, the People and Compensation Committee determined that the performance targets for such awards were not probable of achievement. This resulted in the cancellation of 458,960 awards and the reversal of $2.9 million of previously recognized stock compensation expense.

In April and May 2019, we granted 60,088 restricted stock awards to our seven new non-employee directors with a grant date fair value of primarily $10.64 per share. In November 2018, we granted 59,812 restricted stock awards to our non-employee directors with a grant date fair value of $9.18 per share. The awards granted to non-employee directors vested on September 30, 2019 and were subject only to service conditions.

In November and December 2016 and April 2017, we granted 931,260 restricted stock awards to employees and 72,500 restricted stock awards to non-employee directors, each with a grant date fair value of approximately $9.60 per share. The awards granted to employees vested on September 30, 2019 and 463,467 shares were released. The awards granted to non-employee directors vested over two years, 50% on September 30, 2017 and 50% on September 30, 2018 and were subject only to service conditions.

As of September 30, 2020, the unamortized fair value, exclusive of forfeitures, of share awards to be amortized over their remaining vesting periods was approximately $1.2 million. The weighted-average period over which these costs will be amortized is approximately two years.

The following table presents amounts related to our stock compensation arrangements:


	Fiscal Year Ended September 30,
	2020		2019		2018

	(in thousands)
Share-based compensation costs	$	(5,094)	$	9,751	$	10,784
Income tax expense (benefit) on share-based compensation	420		(1,098)		(1,656)

The following table presents a summary of stock compensation activity:


	Shares	Weighted Average Grant Date Fair Value

Outstanding as of September 30, 2019	3,451,024	$	9.28
Granted	1,472,578	5.73
Vested and released (a)	(989,223)	8.67
Forfeited	(2,825,459)	8.59
Outstanding as of September 30, 2020	1,108,920	$	5.65

(a) 268,798 shares were withheld to satisfy related federal income tax withholding.

The following table presents a summary of the fair value of shares granted:


	Fiscal Year Ended September 30,
	2020		2019		2018

	(in millions except per share amounts)
Weighted average grant-date fair value per share granted (a)	$	5.73	$	9.29	$	9.75
Total grant date fair value of shares vested	$	5.1	$	11.8	$	2.3

(a) Awards with performance and time-based vesting provisions are generally valued based upon the underlying share price as of the issuance date.

Other

We have not declared or paid any dividends and currently do not anticipate paying any dividends in the immediate future. As described in Note 9, payment of a dividend requires an adjustment to the conversion rate of our Convertible Notes. Should we pay dividends in the future, our certificate of incorporation provides that cash dividends on common stock, when declared, must be declared and paid at the same per share amounts on both classes of stock. Any future determination to pay cash dividends will be at the discretion of our Board of Directors.