Under what circumstances can accelerated vesting occur for Carvel's Parent's stock options?

According to Carvel's 2025 Franchise Disclosure Document, the Parent company issues equity incentive grants under the 2022 Stock Option Plan and previously under the 2013 Stock Option Plan. These plans allow for the granting of options to purchase common stock of the Parent, aiming to attract, retain, and incentivize eligible employees, directors, and consultants to increase the value of the Parent's common stock. The Board of Directors administers these plans, determining the amount of options granted, the dates they become exercisable, and the exercise price, subject to certain limitations. As of December 29, 2024, there were 12,929 options available for issuance under the 2022 Plan.

The vesting periods for these options can range from immediate vesting to a five-year vesting period. Accelerated vesting can occur in the event of a change in control under certain circumstances, as defined in the Plans. Additionally, some options have vesting requirements based on achieving specific operating results. The options typically expire 10 years from the grant date, but this can also be affected by a change in control, as defined in the Plans.

For a prospective Carvel franchisee, this information is relevant if they are also an employee, director, or consultant of the Parent company, as it outlines the conditions under which their stock options may vest more quickly. Understanding the terms of the stock option plans, particularly the definitions of "change in control" and the specific operating results required for vesting, is crucial. This could impact the value and timing of when they can exercise their options, especially in the event of significant company changes or performance milestones.