Under Budget's stock unit awards, what does the holder receive upon vesting?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
stock-based awards with treasury shares.
Time-based awards generally vest ratably over a three-year period following the date of grant, and performance-based awards generally vest three years following the date of grant based on the attainment of performance goals, both of which are subject to a service condition.
Stock unit awards entitle the holder to receive shares of common stock upon vesting on a one-to-one basis, and certain performance-based RSUs vest based upon the level of performance attained.
As part of our declaration and payment of a special cash dividend in December 2023, we granted additional RSUs to our award holders with unvested shares as a dividend equivalent, which has been deferred until, and will not be paid unless, the shares of stock underlying the award vest.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, stock unit awards entitle the holder to receive shares of common stock upon vesting on a one-to-one basis. Certain performance-based Restricted Stock Units (RSUs) vest based upon the level of performance attained.
In December 2023, Budget granted additional RSUs to award holders with unvested shares as a dividend equivalent, which has been deferred until the shares of stock underlying the award vest. This means that the holder will not be paid unless the shares of stock underlying the award vest.
Time-based awards generally vest ratably over a three-year period following the date of grant, and performance-based awards generally vest three years following the date of grant based on the attainment of performance goals, both of which are subject to a service condition. This means that the vesting of the stock unit awards is dependent on the holder's continued service and, in some cases, the achievement of specific performance goals over a three-year period.