AAON, INC. 10-Q

Item 2. Unregistered Sales of Equity and Securities and Use of Proceeds. Stock Repurchases The Company may repurchase AAON, Inc. stock on the open market from time to time. From inception through September 30, 2023, we have repurchased a total of approximately 6.9 million shares (at current market prices) under the various open market stock buyback programs for an aggregate price of $106.6 million, or an average price of $15.47 per share. 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. On November 3, 2022, the Board of Directors approved an updated stock repurchase plan with repurchases under the plan not to exceed $50.0 million. The current repurchase plan will expire at the Board of Directors discretion. 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. From inception through September 30, 2023, we repurchased approximately 3.1 million shares (at current market prices) for an aggregate price of $24.6 million, or an average price of $7.95 per share. - 38 - 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, Inc. stock in their accounts sold to the Company. The 401(k) Plan was amended in June 2022 to discontinue this program. From inception through September 30, 2023, we repurchased approximately 12.5 million shares (at current market prices) for an aggregate price of $171.8 million, or an average price of $13.78 per share. Repurchases during the third quarter of 2023 were as follows: ISSUER PURCHASES OF EQUITY SECURITIES Period (a) Total Number of Shares (or Units) Purchased 1 (b) Average Price Paid Per Share (or Unit) 1 (c) Total Number of Shares (or Units) Purchased as part of Publicly Announced Plans or Programs 1 (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased under the Plans or Programs July 2023 177 $ 67.30 177 — August 2023 403,187 62.07 403,187 — September 2023 258 61.49 258 — Total 403,622 $ 61.95 403,622 — 1 Reflects three-for-two stock split effective August 16, 2023. 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 1.56 million 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 September 30, 2023, 0.58 million shares and 0.73 million 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. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. Not applicable. Item 4A. Submission of Matters to a Vote of Security Holders. None. - 39 -