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Note 6 - Stock-based Compensation

3 Months Ended

Apr. 29, 2023

Notes to Financial Statements

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 granting 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 April 29, 2023 and April 30, 2022, selling, general and administrative expense included stock-based compensation expense of $1.1 million and $0.7 million, respectively. As of April 29, 2023, there was $4.8 million of total unrecognized compensation expense related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 2.1 years.

The following table is a summary of the balances and activity for stock options for the thirteen weeks ended April 29, 2023:

		*Options*
		*Shares*				*Weighted Average Exercise Price*
Outstanding, January 28, 2023			177,519			$	14.20
Granted			-				-
Exercised			(7,308	)			12.84
Forfeited			-				-
Canceled or expired			-				-
Outstanding, April 29, 2023			170,211			$	14.26

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 April 29, 2023:

		*Time-Based Restricted Stock*								*Performance-Based Restricted Stock*
		*Shares*				*Weighted Average Grant Date Fair Value*				*Shares*				*Weighted Average Grant Date Fair Value*
Outstanding, January 28, 2023			287,983			$	8.78				295,048			$	8.13
Granted			43,437				24.75				65,254				24.75
Vested			-				-				-				-
Earned			215,130				2.78				(157,373	)			2.78
Forfeited			-				-				-				-
Canceled or expired			-				-				-				-
Outstanding, April 29, 2023			546,550			$	7.69				202,929			$	8.13

During the thirteen weeks ended April 29, 2023, there were no shares that vested within the period. Performance shares totaling a fair value of $0.6 million were earned during the first quarter of fiscal 2023 and will vest in the second quarter of fiscal 2023. For the thirteen weeks ended April 30, 2022, the total fair value of shares vested was $1.6 million.

The outstanding performance shares as of April 29, 2023 consist of the following:

		*Performance Shares*
Earned Shares subject to time-based restrictions at actual			215,130

Unearned shares subject to performance-based restrictions at target:
2021 - 2023 consolidated, cumulative earnings before interest, taxes, depreciation and amortization (EBITDA) objectives			39,821
2021 - 2023 consolidated revenue growth objectives			13,274
2022 - 2024 consolidated, earnings before interest, taxes, depreciation and amortization (EBITDA) growth objectives			63,435
2022 - 2024 consolidated revenue growth objectives			21,145
2023 - 2025 consolidated pre-tax income growth objectives			42,415
2023 - 2025 consolidated revenue growth objectives			22,839
Performance shares outstanding, April 29, 2023			202,929