What are the awards issued under the 2022 Equity Plan for Benjamin Franklin Plumbing also referred to as?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
n revenue for the year ended December 31, 2022.
Prior to closing of the HELOC Transaction, the Parent modified the terms of the Class B Profit Interests previously granted to five management team members to allow for continued vesting post-separation. As a result of these modifications, the Company recognized stock-based compensation expense of approximately $1,215 for the year ended December 31, 2022 based on the modification date fair value which is reflected in amounts disclosed above.
2022 Equity Plan
In November of 2022, in connection with the HELOC Transaction, the Parent entered into the Binford Aggregator LP Executive Equity Incentive Plan (the "2022 Plan").
The awards issued under the 2022 Plan are also referred to as Class B Profit Interest Units. For the 2022 Plan, 26.67% of Class B Profit Interest Units vest over time and are conditioned upon the participant's continued employment and the achievement of a set return on invested capital. Remaining awards vest as the Company achieves multiples of the invested capital and are conditioned upon occurrence of a change in control or a qualified leverage recapitalization ("change in control events").
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the awards issued under the 2022 Equity Plan are also referred to as Class B Profit Interest Units. This plan, officially named the Binford Aggregator LP Executive Equity Incentive Plan, was established in November 2022 in connection with the HELOC Transaction.
The Class B Profit Interest Units have specific vesting conditions. Approximately 26.67% of these units vest over time, contingent upon the participant's continued employment and the achievement of a set return on invested capital. The remaining awards vest as the company achieves multiples of the invested capital, but only upon the occurrence of a change in control or a qualified leverage recapitalization, defined as "change in control events."
The document further clarifies that for the years ending December 31, 2024, 2023, and 2022, Benjamin Franklin Plumbing determined that it was not probable that any of these "change in control events" would occur. Consequently, compensation expenses related to the portion of the awards conditioned upon the occurrence of these events were not recognized in the consolidated financial statements for those years. The awards with a time-vesting component are earned in equal tranches on each anniversary over five years; however, these awards will not vest until the return on invested capital condition is met or upon the occurrence of the change in control events, even if the time-vesting condition is met. As of December 31, 2024 and 2023 no units were vested.