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Note 6 - Stock-based Compensation

6 Months Ended

Jul. 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, the Company’s stockholders approved the 2020 Incentive Plan. On April 11, 2023, the Board adopted, subject to stockholder approval, the Build-A-Bear Workshop, Inc. Amended and Restated 2020 Omnibus Incentive Plan (the “Restated 2020 Incentive Plan”). On June 8, 2023, at the Company’s 2023 Annual Meeting of Stockholders (the “Annual Meeting”), the Company’s stockholders approved the Restated 2020 Incentive Plan. The Restated 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 Restated 2020 Incentive Plan. The Restated 2020 Incentive Plan will terminate on April 11, 2033, unless earlier terminated by the Board. The total number of shares of the Company’s common stock authorized for issuance under the Restated 2020 Incentive Plan will increase by 800,000 to a maximum of 1,800,000 since its inception as the 2020 Incentive Plan, subject to customary capitalization adjustments, substitutions of acquired company awards and certain additions of acquired company plan shares, plus shares that are subject to outstanding awards made under the Build-A-Bear Workshop, Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”) that on or after April 14, 2020 may be forfeited, expire or be settled for cash.

For the thirteen weeks ended July 29, 2023 and July 30, 2022, selling, general and administrative expense included stock-based compensation expense of $0.7 million and $0.6 million, respectively. For the twenty-six weeks ended July 29, 2023 and July 30, 2022 selling, general, and administrative expense included stock-based compensation expense of $1.8 million and $1.3 million, respectively. As of July 29, 2023, there was $2.1 million of total unrecognized compensation expense related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 1.9 years.

The following table is a summary of the balances and activity for stock options for the twenty-six weeks ended July 29, 2023:

		*Options*
		*Shares*				*Weighted Average Exercise Price*
Outstanding, January 28, 2023			177,519			$	14.20
Granted			-				-
Exercised			(131,811	)			12.65
Forfeited			-				-
Canceled or expired			-				-
Outstanding, July 29, 2023			45,708			$	18.67

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 July 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			65,759				23.52				65,254				24.75
Vested			(208,620	)			7.20				-				-
Earned and Vested			-				-				(215,130	)			2.78
Forfeited			(4,838	)			12.91				(3,466	)			18.03
Canceled or expired			-				-				57,756				2.87
Outstanding, July 29, 2023			140,283			$	17.89				199,462			$	17.62

The total fair value of shares vested during the twenty-six weeks ended July 29, 2023 and July 30, 2022 was $2.1 million and $2.0 million, respectively.

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

		*Performance Shares*
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			60,835
2022 - 2024 consolidated revenue growth objectives			20,278
2023 - 2025 consolidated pre-tax income growth objectives			42,415
2023 - 2025 consolidated revenue growth objectives			22,839
Performance shares outstanding, July 29, 2023			199,462