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Note 6 - Stock-based Compensation

6 Months Ended

Aug. 01, 2020

Share-based Payment Arrangement [Text Block]

6. Stock-based Compensation

On April 14, 2020, the Board of Directors (the “Board”) of Build-A-Bear Workshop, Inc. (the “Company”) adopted, subject to stockholder approval, the Build-A-Bear Workshop, Inc. 2020 Omnibus Incentive Plan (the “2020 Incentive Plan”). On June 11, 2020, at the Company’s 2020 Annual Meeting of Stockholders (the “Annual Meeting”), the Company’s stockholders approved the 2020 Incentive Plan. The 2020 Incentive Plan, which is administered by the Compensation and Development Committee of the Board, permits the grant of stock options (including both incentive and non-qualified stock options), stock appreciation rights, other stock-based awards, including restricted stock and restricted stock units, cash-based awards, and performance awards pursuant to the terms of the 2020 Incentive Plan. The 2020 Incentive Plan will terminate on April 14, 2030, unless earlier terminated by the Board.

The number of shares of the Company’s common stock authorized for issuance under the 2020 Incentive Plan is 1,000,000, plus shares of stock that remained available for issuance under the Build-A-Bear Workshop, Inc. 2017 Omnibus Incentive Plan (the “2017 Incentive Plan”) at the time the 2020 Incentive Plan was approved by the Company’s stockholders, and shares that are subject to outstanding awards made under the 2017 Incentive Plan that on or after April 14, 2020 may be forfeited, expire or be settled for cash.

In accordance with its terms, as of the date the 2020 Incentive Plan was approved by the Company’s stockholders, the 2017 Incentive was frozen and no further awards will be issued thereunder. Awards issued pursuant to the 2017 Incentive Plan

that were outstanding as of the date of stockholder approval of the 2020 Incentive Plan will remain outstanding and will be administered in accordance with the terms of the 2017 Incentive Plan and applicable award agreements thereunder. All of the stock-based incentive compensation activity for the period ended August 1, 2020 and August 3, 2019 was under the 2017 Incentive Plan.

For the thirteen weeks ended August 1, 2020 and August 3, 2019, Selling, general and administrative expense included $0.5 million and $0.7 million, respectively, of stock-based compensation expense, and for the twenty-six weeks ended August 1, 2020 and August 3, 2019, Selling, general and administrative expense included $0.7 million and $1.5 million, respectively. As of August 1, 2020, there was $2.0 million of total unrecognized compensation expense related to unvested restricted stock and option awards which is expected to be recognized over a weighted-average period of 1.1 years.

The following table is a summary of the balances and activity for stock options for the twenty-six weeks ended August 1, 2020:

	*Options*
	*Shares*			*Weighted Average Exercise Price*
Outstanding, February 1, 2020		923,254		$	9.76
Granted		-			-
Exercised		-			-
Forfeited		-			-
Canceled or expired		(98,415	)		7.92
Outstanding, August 1, 2020		824,839		$	9.98

The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the twenty-six weeks ended August 1, 2020:

	*Time-Based Restricted Stock*					*Performance-Based Restricted Stock*
	*Shares*			*Weighted Average Grant Date Fair Value*		*Shares*			*Weighted Average Grant Date Fair Value*
Outstanding, February 1, 2020		453,403		$	6.71		262,964		$	7.59
Granted		398,681			2.15		-			-
Vested		(260,317	)		6.98		(56,380	)		8.85
Forfeited		-			-		-			-
Canceled or expired		-			-		(27,517	)		8.85
Outstanding, August 1, 2020		591,767		$	3.52		179,067		$	7.00

The total fair value of shares vested during the twenty-six weeks ended August 1, 2020 and August 3, 2019 was $2.3 million and $2.2 million, respectively.

The outstanding performance shares as of August 1, 2020 consist of the following:

	*Performance Shares*

Unearned shares subject to performance-based restrictions at target:
2018 - 2020 consolidated total revenue growth objectives		20,756
2018 - 2020 consolidated pre-tax income growth objectives		62,500
2019 - 2021 consolidated pre-tax income growth objectives		95,811
Performance shares outstanding, August 1, 2020		179,067