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Note 6 - Stock-based Compensation

9 Months Ended

Nov. 02, 2024

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 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 increased 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 November 2, 2024 and October 28, 2023, selling, general and administrative expense included stock-based compensation expense of $0.7 million and $0.7 million, respectively. For the thirty-nine weeks ended November 2, 2024 and October 28, 2023, selling, general, and administrative expense included stock-based compensation expense of $1.7 million and $2.5 million, respectively. As of November 2, 2024, there was $3.4 million of total unrecognized compensation expense related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 1.8 years.

The following table is a summary of the balances and activity for stock options for the thirty-nine weeks ended November 2, 2024:

		*Options*
		*Shares*				*Weighted Average Exercise Price*
Outstanding, February 4, 2024			12,375			$	17.84
Granted			-				-
Exercised			(12,375	)			17.84
Forfeited			-				-
Canceled or expired			-				-
Outstanding, November 2, 2024			-			$	-

The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the thirty-nine weeks ended November 2, 2024:

		*Time-Based Restricted Stock*								*Performance-Based Restricted Stock*
		*Shares*				*Weighted Average Grant Date Fair Value*				*Shares*				*Weighted Average Grant Date Fair Value*
Outstanding, February 4, 2024 ⁽¹⁾			122,609			$	18.02				185,082			$	17.37
Granted ⁽¹⁾			59,823				27.18				64,619				27.61
Vested			(81,561	)			15.87				-				-
Adjustment for performance achievement			-				-				53,095				8.24
Earned and vested			-				-				(106,190	)			8.24
Forfeited ⁽¹⁾			(3,333	)			24.75				(3,333	)			24.75
Outstanding, November 2, 2024 ⁽¹⁾			97,538			$	25.21				193,273			$	23.17

(1)

Performance-based restricted stock outstanding, granted, and forfeited are presented at 100% of target.

The total fair value of shares vested during the thirty-nine weeks ended November 2, 2024 and October 28, 2023 was $2.2 million and $2.1 million, respectively.

The outstanding performance shares as of November 2, 2024 consist of the following:

		*Performance Shares*
Unearned shares subject to performance-based restrictions at target:
2022 - 2024 consolidated, earnings before interest, taxes, depreciation and amortization (EBITDA) growth objectives			54,596
2022 - 2024 consolidated revenue growth objectives			18,198
2023 - 2025 consolidated pre-tax income growth objectives			36,309
2023 - 2025 consolidated revenue growth objectives			19,551
2024 - 2026 consolidated EBITDA objectives			42,002
2024 - 2026 consolidated, cumulative revenue objectives			22,617
Performance shares outstanding, November 2, 2024			193,273