What are 'change in control events' as they relate to the 2022 Equity Plan for Benjamin Franklin Plumbing?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
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").
For the Class B Profit Interest Units granted under the 2022 Plan, for the years ended December 31, 2024, 2023 and 2022, the Company determined that it is not probable that any of the change in control events will occur and, as such, compensation expense related to the portion of the awards conditioned upon occurrence of these events has not been recognized in the consolidated financial statements for the years ended December 31, 2024, 2023 and 2022.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, the 'change in control events' related to Benjamin Franklin Plumbing's 2022 Equity Plan refer to specific conditions under which certain Class B Profit Interest Units vest. These units, issued under the Binford Aggregator LP Executive Equity Incentive Plan, have vesting conditions tied to both time and the company's financial performance. Specifically, 26.67% of these units vest over time, contingent on continued employment and achieving a set return on invested capital.
The remaining Class B Profit Interest Units are linked to the company's achievement of multiples of invested capital and are conditional upon the occurrence of a 'change in control' or a 'qualified leverage recapitalization'. These events trigger the vesting of these remaining awards.
For prospective Benjamin Franklin Plumbing franchisees, this information is relevant as it provides insight into the equity incentive structure for the company's executives and how their compensation is tied to specific performance metrics and potential change in control events. It's worth noting that for the years 2022, 2023, and 2024, Benjamin Franklin Plumbing determined that it was not probable that any of these 'change in control events' would occur, and therefore, related compensation expenses were not recognized in the consolidated financial statements for those years.