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Note 6 - Stock-based Compensation

3 Months Ended

May 01, 2021

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 (the "Compensation Committee", 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 terminated earlier 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.

For the thirteen weeks ended May 1, 2021 and May 2, 2020, Selling, general and administrative expense included $0.6 million and $0.3 million, respectively, of stock-based compensation expense. As of May 1, 2021, there was $3.3 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 1.7 years.

The following table is a summary of the balances and activity for stock options for the thirteen weeks ended May 1, 2021:

	*Options*
	*Shares*			*Weighted Average Exercise Price*
Outstanding, January 30, 2021		805,701		$	9.96
Granted		-			-
Exercised		(48,092	)		6.21
Forfeited		-			-
Canceled or expired		(26,711	)		8.13
Outstanding, May 1, 2021		730,898		$	10.28

The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the thirteen weeks ended May 1, 2021:

	*Time-Based Restricted Stock*					*Performance-Based Restricted Stock*
	*Shares*			*Weighted Average Grant Date Fair Value*		*Shares*			*Weighted Average Grant Date Fair Value*
Outstanding, January 30, 2021		931,172		$	3.26		336,441		$	5.03
Granted		124,392			8.24		53,095			8.24
Vested		(360,828	)		3.54		(32,521	)		8.60
Forfeited		(9,850	)		6.35
Canceled or expired		-			-		(50,735	)		8.60
Outstanding, May 1, 2021		684,886		$	3.97		306,280		$	3.56

The total fair value of shares vested during the thirteen weeks ended May 1, 2021 and May 2, 2020 was $1.6 million and $1.9 million, respectively.

In April 2021, the Committee awarded three-year performance-based restricted stock, established specific profitability and revenue objectives for fiscal 2021, 2022, and 2023, and assigned a weighting to each objective. Profitability will be measured by the Company’s achievement of established cumulative consolidated earnings before interest, taxes and depreciation and amortization (EBITDA) goals. Revenue will be measured by the Company's achievement of revenue growth, by meeting established compound annual growth rate targets for total web demand sales or cumulative total revenue objectives.

The outstanding performance shares as of May 1, 2021 consist of the following:

	*Performance Shares*

Unearned shares subject to performance-based restrictions at target:
2019 - 2021 consolidated pre-tax income growth objectives		95,811
2020 - 2022 consolidated liquidity and strategic performance objectives		89,168
2020 - 2022 consolidated earnings before interest and taxes (EBIT) objectives		68,206
2021 - 2023 consolidated, cumulative earnings before interest, taxes, depreciation and amortization objectives		39,821
2021 - 2023 consolidated revenue growth objectives		13,274
Performance shares outstanding, May 1, 2021		306,280