Stock-Based Compensation | 17. Amended and Restated Stock Incentive Plan The Company’s November 16, 2022. On April 11, issuance by 3,000,000 . On June 3, 2024, the Company’s shareholders No evergreen provisions are included in the 2022 Plan. This means that the maximum number of Plan is fixed stock repricing of awards or the implementation of any award exchange program. The Plan permits Lesaka to grant to its employees, directors and consultants incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, performance-based awards Committee of the Company’s Board The total number 16,552,580 . The maximum stock options, stock appreciation rights year 600,000 available for the grant of awards under the 2022 Plan, as well as shares that are delivered to us by the holder to pay withholding taxes or as payment for with awards account events, the 2022 Plan or reserved pursuant to the plan or outstanding awards, the maximum number of shares for awards, 2032, but awards granted on or before such date may extend to later dates. 17. Amended and Restated Stock Incentive Plan (continued) Options General Terms of Option awards are generally granted with an exercise price equal to the market price of the Company's stock at the date of grant, with vesting conditioned upon the recipient’s continuous service through the applicable vesting date and expire 10 of grant. The options generally become exercisable in accordance with a three years date of grant. The Company issues new shares to satisfy stock option award exercises but may Valuation The assumptions 750 -day volatility. The options with similar terms. No assumptions used to value options granted during the years ended June 30, 2024 2024 2022 Expected volatility 55 % 50 % Expected dividends 0 % 0 % Expected life (in years) 5.0 3.0 Risk-free rate 2.11 % 1.61 % Restricted Stock General Terms of Shares of restricted stock are for the to transfer any unvested receive non-forfeitable three year circumstances, the achievement of certain performance targets, Recipients agreements. These other reinvested in additional shares of common stock, which in either case shall be subject to the same restrictions as the underlying award or such other restrictions as the Remuneration of any any reason, the Company for future issuances by the Remuneration Committee. The Company issues new shares to satisfy restricted stock awards. Valuation The fair value Select Market on the date of grant. 17. Amended and Restated Stock Incentive Plan (continued) Restricted Stock (continued) Market Conditions - Restricted Stock Granted in September 2018 – In September 2018, the Remuneration Committee approved an award of 148,000 The 148,000 and a market common stock must equal or exceed certain agreed VWAP the date that (2) the recipient is employed by the Company on a full-time basis when the satisfied, 23.00 approximate 55 % increase, 6.20 price on September 7, 2018. The VWAP ● Below $ 15.00 0 % ● At or above $ 15.00 19.00 — 33 % ● At or above $ 19.00 23.00 — 66 % ● At or above $ 23.00 — 100 % The fair value of these shares of restricted stock was calculated using a Monte The choice of a stochastic volatility process as an extension to the standard Black Scholes process was driven by both observations of larger than expected moves in the daily time series for the Company’s volatility Company’s stock and NASDAQ futures. In scenarios where vested value on maturity is the share price on an average volatility of 37.4 % for the VWAP no future dividends. The average volatility was extracted from the time series for VWAP prices as the standard deviation of log prices for the three years volatility process options 30 day During 30,000 market conditions described above because the performance conditions were not met. During the year ended June 30, 2021, executive officers forfeited 88,000 from the Company. Performance Conditions - Restricted Stock Granted in February 2020 The 454,400 performance-based achievement of an agreed return on average net equity per year during a measurement period commencing from July 1, 2021, through June 30, 2023, calculated as total equity attributable to the Company’s net equity as of June 30, 2021, was set as the base year for the measurement period. The average net equity is calculated as the simple average between return per year within the measurement period is derived from GAAP net income The performance-based awards measurement period, of: ● 8 % per year: 50 % vest; ● 14 % per year: 100 % vest. 17. Amended and Restated Stock Incentive Plan (continued) Restricted Stock (continued) Performance Conditions - Restricted Stock Granted in February 2020 No 8 %. Calculation returns between 8 % and 14 % will be interpolated on a linear discretion to adjust any component of the During 80,000 performance officers forfeited 374,400 from the Company. Market Conditions - Restricted Stock Granted in May 2021 and In May 158,734 58,652 restricted stock to condition and a (1) a compounded annual 20 % appreciation in the Company’s stock price over the through June 30, 2024, and (2) the recipient either of stock price targets were not met and all of price on Nasdaq on June 30, 2021, was $ 4.71 . The appreciation levels (times and price) and vesting percentages as of each period ended related to such levels were as follows: ● Prior to the first anniversary of the grant date: 0 % ● Fiscal 2022, stock price as of June 30, 2022 is 1.2 5.65 4.71 : 33 %; ● Fiscal 2023, stock price as of June 30, 2023 is 1.44 6.78 4.71 : 67 %; ● Fiscal 2024, stock price as of June 30, 2024 is 1.728 8.14 ) than $ 4.71 : 100 %. The fair value of these shares of restricted stock was calculated using a Monte The choice of a stochastic volatility process as an extension to the standard Black Scholes process was driven by both observations of larger than expected moves in the daily time series for volatility Company’s stock and NASDAQ futures. In scenarios where the vested value on maturity is the share price on an average 61.6 % for the overnight indexed swap rates for the grant date, and no future dividends. The average volatility was extracted from the time series for closing prices as the standard deviation of log prices for the three years preceding the grant date. The mean reversion of volatility and the volatility of volatility parameters of the stochastic volatility process were extracted by of volatility from the time series for at-the-money options 30 day May 5, 2021 (for the May 2021 awards) and July 1, 2021 (for the July 2021 award). Performance Conditions - Restricted Stock Granted in July 2021 In July 2021, the Remuneration Committee approved an 58,652 shares of restricted the three year during the specific measurement period from June 30, 2021, to June 30, 2024, and (2) the a full-time basis when the stock would price on date of award. of restricted stock vested in full on June 30, 2024. 17. Amended and Restated Stock Incentive Plan (continued) Restricted Stock (continued) Market Conditions - Restricted Stock Granted in December 2022 In December 2022, the Remuneration 257,868 The 257,868 condition and vest 10 % appreciation in 4.94 December 1, 2025, and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is these conditions is not satisfied, then none of the shares of price on December 1, 2022, was $ 4.08 . The appreciation levels (times and price) and vesting percentages as of each ● Prior to the first anniversary of the grant date: 0 %; ● Fiscal 2024, stock price as of December 1, 2023 is 1.1 5.43 4.94 : 33 %; ● Fiscal 2025, stock price as of December 1, 2024 is 1.21 5.97 4.94 : 67 %; ● Fiscal 2026, stock price as of December 1, 2025 is 1.331 6.57 ) than $ 4.94 : 100 %. The fair value of these shares of restricted stock was calculated using a Monte Carlo In scenarios where vested value on maturity is the share price on an equally 50.1 % for 4.08 ), a discounting rates for the grant date, and no as the standard deviation of log prices for the three years preceding the grant date. Market Conditions - Restricted Stock Granted in October 2023 In October 2023, the Company 310,916 three a satisfied: (1) 10 % appreciation 4.00 period commencing on September 30, 2023 through November 17, 2026, and (2) the recipient is employed by the Company on a full- time basis when the condition in (1) is met. If either of these conditions is not satisfied, then none of the shares of restricted stock will vest and they will be forfeited. The Company’s 3.90 . The appreciation levels (times and price) and vesting percentages as of each ● Prior to the first anniversary of the grant date: 0 %; ● Fiscal approximately 1.10 4.40 4.00 : 33 %; ● Fiscal 2026, the Company’s 1.21 4.84 4.00 : 67 %; ● Fiscal 2027, the Company’s 1.33 5.32 ) than $ 4.00 : 100 %. The fair value do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share price on 48.3 % for 4.37 ), a future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log prices for the three years preceding the grant date. 17. Amended and Restated Stock Incentive Plan (continued) Restricted Stock Units The Remuneration Committee 1,250,486 shares mechanism to 7.50 conversion of restricted stock units to shares cannot exceed 50 % under the terms of the award and therefore no more than 625,243 1,250,486 388,908 412,487 194,454 206,239 were converted to 166,087 72,081 166,167 164,687 restricted stock units which vested, and which were converted to shares, in order to satisfy the withholding of these and other shares. The 166,087 72,081 Stock Appreciation Rights The Remuneration Committee may also grant stock appreciation rights, either Stock appreciation rights entitle the holder upon exercise to receive an amount in any combination of cash or shares of common stock (as determined by the Remuneration Committee) over the grant price. No Stock option and restricted stock activity Options The following table summarizes stock option activity for the years ended Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($'000) Weighted average grant date fair value ($) Outstanding - July 1, 2021 1,294,832 3.93 7.68 1,624 1.45 Granted – August 2020 137,620 4.87 10.00 235 1.71 Exercised (249,521) 3.05 - 470 - Forfeited (256,706) 4.53 - 1.69 Outstanding - June 30, 2022 926,225 4.14 6.60 1,249 1.60 Exercised (158,659) 3.04 - 200 - Forfeited (94,292) 3.99 - 1.81 Outstanding - June 30, 2023 673,274 4.37 5.14 239 1.67 Granted – December 2023 500,000 3.50 5.17 880 1.76 Granted – June 2024 1,000,000 6.00 4.60 1,690 1.69 Granted – June 2024 1,000,000 8.00 4.60 1,300 1.30 Granted – June 2024 1,000,000 11.00 4.60 920 0.92 Granted – June 2024 1,000,000 14.00 4.60 685 0.69 Exercised (54,287) 2.25 - 71 - Forfeited (200,739) 3.96 - 1.42 Outstanding - June 30, 2024 4,918,248 8.70 4.51 889 1.77 These options have an exercise price range of $ 3.01 14.00 . The 4,500,000 137,620 respectively. No 17. Stock option and restricted stock activity (continued) Options (continued) The 4,500,000 Executive Chairman, and 500,000 4,000,000 to shareholder approval 500,000 of December 3, 2023, provided 4,000,000 500,000 options will anniversary of the grant date. The 4,500,000 to January 31, 2029. On August 5, 2020, the Company granted one of its then non-employee directors, Mr. 150,000 3.50 . These stock options vested 2023. During 116,063 , 327,965 376,348 respectively. During the year ended June 30, 2023, an employee delivered 23,934 37,500 0.1 23,934 Company’s treasury stock. 6,105 arising upon exercise of the stock options, and ended 0.2 0.5 0.8 exercise of 54,287 , 158,659 249,521 During 200,739 , 94,292 , 256,706 respectively. The 3.01 11.23 . Options (continued) The following table presents stock options vested and expected to vest as of Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($’000) Vested 4,918,248 8.70 4.51 889 These options have an exercise price range of $ 3.01 14.00 , and include the 4,000,000 The following table presents stock options that are exercisable as of June Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($’000) Exercisable - June 30, 2024 391,342 4.71 5.39 299 17. Stock option and restricted stock activity Restricted stock The following table summarizes restricted stock activity for the years Number of shares of restricted stock Weighted average grant date fair value ($’000) Non-vested – June 30, 2021 384,560 1,123 Total granted 2,168,110 11,097 Granted – July 2021 234,608 963 Granted – August 2021 44,986 192 Granted – November and December 2021 326,158 1,766 Granted – December 2021 50,300 269 Granted – February 2022 29,920 146 Granted – March 2022 207,859 1,097 Granted – April 2022 1,250,486 6,540 Granted – May 2022 23,793 124 Total granted and vested - November and December 2021 - - Granted - November and December 2021 71,647 393 Vested (71,647) 393 Total vested (61,861) 306 Total forfeitures (105,542) 542 Forfeitures - employee terminations (75,542) 382 Forfeitures – September 2018 awards with market conditions (30,000) 160 Non-vested – June 30, 2022 2,385,267 11,879 Total granted 1,085,981 4,411 Granted – July 2022 32,582 172 Granted – August 2022 179,498 995 Granted - November 2022 150,000 605 Granted - December 2022 430,399 1,862 Granted - January 2023 11,806 57 Granted - June 2023 23,828 124 Granted - December 2022 - performance awards 257,868 596 Total vested (742,464) 3,171 Vested (78,801) 410 Vested (59,833) 250 Vested (7,060) 29 Vested (19,179) 83 Vested (69,286) 326 Vested (418,502) 1,721 Vested (61,861) 217 Vested (27,942) 135 Total forfeitures (114,365) 554 Forfeitures - employee terminations (34,365) 138 Forfeitures – February 2020 award with market condition (80,000) 416 Non-vested – June 30, 2023 2,614,419 11,869 17. Stock option and restricted stock activity Restricted stock (continued) The following table summarizes restricted stock activity for the year Number of shares of restricted stock Weighted average grant date fair value ($’000) Non-vested – June 30, 2023 2,614,419 11,869 Total granted 1,002,241 3,942 Granted – October 2023 333,080 1,456 Granted – October 2023, with performance conditions 310,916 955 Granted – October 2023 225,000 983 Granted – January 2024 56,330 197 Granted – February 2024 9,195 31 Granted - June 2024 67,720 320 Total vested (1,232,251) 5,208 Vested (78,800) 302 Vested (109,833) 429 Vested (67,073) 234 Vested (14,811) 53 Vested (69,286) 256 Vested (394,932) 1,630 Vested (88,617) 391 Vested (350,247) 1,639 Vested (58,652) 274 Total forfeitures (299,463) 1,315 Forfeitures - employee terminations (82,077) 298 Forfeitures – May and July 2021 awards with market condition (217,386) 1,017 Non-vested – June 30, 2024 2,084,946 8,736 17. Stock option and restricted stock activity (continued) Restricted stock Awards granted In October 2023, the Company 333,080 150 October 2023, the Company awarded 310,916 based 225,000 restricted stock to an executive officer in cause, in which case the award will be forfeited. In January 2024, February 2024 and June 56,330 ; 9,195 and 67,720 In July 2022, 32,582 , 430,399 , 11,806 23,828 of restricted stock, respectively, to employees the Company awarded 257,868 conditions related to one -for-one basis, (1) employee’s purchase of up to $ 1.0 2022, the Company granted 179,498 150,000 shares 150,000 employee. 300,000 executive officer on December 31, 2022, which vested on the date 17. Stock option and restricted stock activity (continued) Restricted stock (continued) Awards granted On June 30, 2021, the Company appointed Group Chief Executive Officer of the Company effective July 117,304 stock on July service to the Committee also awarded Mr. Meyer 117,304 June 30, Vesting 58,652 three-year services plan during the specific measurement period from June 30, 2021, to June 30, 2024, and the other half is subject to share price growth 8.14 awarded 207,859 service through date. On 1,250,486 Agreement. The 7.50 through the issue of restricted stock units. The conversion of restricted stock units to shares cannot exceed 50 % under the terms of the award. Upon joining the Company, each of Messrs. Meyer and Lincoln C. Mali, were entitled to receive an award of shares of restricted stock which were subject to them purchasing an agreed value of of time. However, these trading executives into an economically equivalent position, as follows: (i) assume 30 employment had they not been embargoed; (ii) require the Report on Form 10-Q for the three months ended September 30, 2021; (iii) to the 30 -day volume-weighted their respective first between (a) number of shares purchased at 30 -day VWAP in their respective first months of employment and (b) number of purchased at the actual share price paid. The top-up will be settled as follows: (a) 55 % in shares of the Company’s common stock and (b) 45 %, at the election of to any vesting conditions and vested immediately; and (iv) vest ratably over a period of three years The 326,158 matching 71,647 dates from when the Company. The shares three years Effective January 1, during a contract term that will occur, 6,481 shares if the contract is 6,481 using an 35,000 Select quarterly basis and that the shares During each $ 0.2 32,405 38,886 17. Stock option and restricted stock activity (continued) Restricted stock (continued) Awards vested During the years 1,002,241 , 742,464 133,508 with time-based and performance-based 58,652 with a performance-based condition related to the achievement of the 2021 to 2024 financial services plan. The fair stock which vested during 5.2 3.2 0.4 In May 55,598 25,020 satisfy the withholding tax liability on the vesting of these shares. In addition, in November and May and June 556,889 128,415 to be 78,801 granted to Mr. 35,460 these shares. In May 2023, 55,599 25,020 to satisfy April, May and June 434,279 190,394 shares to be withheld 153,435 25,020 128,415 ) and 250,874 35,460 25,020 190,394 ) shares 2023, respectively. The 133,508 71,647 to above 29,919 date of joining the Company. Awards forfeited During the year 217,386 executive officers) 2024, employees forfeited 82,077 During the year ended June 30, 2023, 80,000 condition (related to net asset 34,365 of restricted stock following their termination of employment with the Company. During 30,000 condition (related to share price performance) was not achieved and the 75,542 following termination of their employment. 17. Stock-based compensation charge and unrecognized compensation The Company has 7.9 7.3 3.0 June 30, 2024, 2023 and 2022, respectively, Total Allocated to IT processing, servicing and support Allocated to selling, general and administration Year Stock-based compensation charge $ 8,045 $ - $ 8,045 Reversal of stock compensation charge related to stock options and restricted stock forfeited (134) - (134) Total - year ended June $ 7,911 $ - $ 7,911 Year Stock-based compensation charge $ 7,673 $ - $ 7,673 Reversal of stock compensation charge related to stock options and restricted stock forfeited (364) - (364) Total - year ended June $ 7,309 $ - $ 7,309 Year Stock-based compensation charge $ 3,082 $ - $ 3,082 Reversal of stock compensation charge related to stock options and restricted stock forfeited (120) - (120) Total - year ended June $ 2,962 $ - $ 2,962 The allocation of the cash compensation paid to the relevant employees. As of June 5.0 the two years . related to restricted stock awards was approximately $ 4.2 three years . Income tax consequences The Company 1.3 0.6 2023, respectively. 1.3 $ 0.6 would difference between the market value on date of exercise by the option recipient and the exercise price from income subject to taxation in the United States. |