How does Batteries Plus Bulbs recognize stock-based compensation cost?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
Batteries Plus recognizes stock-based compensation cost using fair value provisions prescribed on a straight-line basis over the vesting period for stock options issued. This expense is allocated from options granted by BPB.
BPB has adopted a stock-based compensation plan for employees. BPB reserves shares of common stock to provide for the exercise of stock options and the issuance of common stock under certain incentive compensation awards. BPB recognizes compensation cost on a straight-line basis over the vesting period for the stock compensation awards issued. BPB allocates compensation expense to the Company to the extent company employees are receiving the awards.
BPB formed the 2016 Equity Incentive Plan (2016 Plan) to provide certain management and key employees with incentive-based awards. The 2016 Plan provides options which are dependent on certain service and performance-based conditions, as follows:
Performance-Based Options - If the eligible employee remains continuously employed by Batteries Plus throughout the defined service period, a performance-based target of a pre-determined amount of value is achieved, and an event occurs that includes a distribution of cash to the majority shareholder at a pre-determined amount, then the options will vest and become exercisable with respect to 20% per year of the total number of performance target options held by the eligible employee over a fiveyear period.
Service-Based Options - If the eligible employee remains continuously employed by Batteries Plus over their defined service period, then this option will vest annually with respect to 20% of the service-based options held by the employee.
The fair value of each stock option grant was determined using the Black-Scholes options-pricing model in the year of the grant. As of December 31, 2024 and 2023, total unrecognized compensation cost related to non-vested service options granted under the 2016 Plan was $4,364 and $2,800, respectively, which are expected to be recognized over a weighted-average period of approximately 54.6 months.
As of December 31, 2024 and 2023, under the 2016 Plan, a total of approximately 86,560 and 100,810 performance-based options were outstanding, respectively, which vest upon an achievement of a realization value. As this value has not been achieved and management is not certain that it is probable as of December 31, 2024, no expense has been recognized for those awards.
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, the company recognizes stock-based compensation cost using fair value provisions. This cost is recognized on a straight-line basis over the vesting period for stock options issued. The expense is allocated from options granted by BPB.
BPB has adopted a stock-based compensation plan for employees, reserving shares of common stock for stock option exercises and the issuance of common stock under certain incentive compensation awards. Compensation costs are recognized on a straight-line basis over the vesting period for the stock compensation awards issued, and these expenses are allocated to the company to the extent that company employees are receiving the awards.
Batteries Plus Bulbs utilizes the 2016 Equity Incentive Plan (2016 Plan) to provide incentive-based awards to certain management and key employees. These options are dependent on service and performance-based conditions. Performance-based options vest and become exercisable at a rate of 20% per year over a five-year period if the employee remains continuously employed, a performance-based target is achieved, and an event occurs that includes a distribution of cash to the majority shareholder at a pre-determined amount. Service-based options vest annually at a rate of 20% if the employee remains continuously employed over their defined service period. The fair value of each stock option grant is determined using the Black-Scholes options-pricing model in the year of the grant.
As of December 31, 2024 and 2023, the total unrecognized compensation cost related to non-vested service options granted under the 2016 Plan was $4,364 and $2,800, respectively, which are expected to be recognized over a weighted-average period of approximately 54.6 months. Additionally, as of December 31, 2024 and 2023, approximately 86,560 and 100,810 performance-based options were outstanding, respectively, which vest upon the achievement of a realization value. No expense has been recognized for these awards as of December 31, 2024, because this value has not been achieved and management is not certain that it is probable.