What is the range of option vesting periods for the stock options related to Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
The Parent issues equity incentive grants under the 2022 Stock Option Plan (the "2022 Plan"). Prior to the 2022 Plan, equity incentive grants were issued under the 2013 Stock Option Plan (collectively with the 2022 Plan, the "Plans"). The 2022 Plan authorizes the granting of options to purchase common stock of the Parent and was established to attract and retain eligible employees, directors, and consultants and to provide an additional incentive to each eligible employee, director, and consultant to work to increase the value of the Parent's common stock. The Plans are administered by the Board. The Board has the authority to determine the amount of options granted to any individual, the dates on which each option will become exercisable, and the exercise price of all options subject to certain limitations in the Plans. As of December 29, 2024, there were 12,929 options available for issuance under the 2022 Plan.
The option vesting periods range from immediate vesting to a five-year vesting period, with accelerated vesting in the event of a change in control under certain circumstances, as defined in the Plans. In addition, certain options have vesting requirements based upon achieving certain operating results. The options expire 10 years from the date of grant or in the event of a change in control under certain circumstances, as defined in the Plans.
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to the 2025 FDD, the parent company of Moe's Southwest Grill, issues equity incentive grants under stock option plans. These plans are designed to attract, retain, and incentivize eligible employees, directors, and consultants by offering them the opportunity to purchase common stock, thereby aligning their interests with the company's success. The authority to determine the specifics of these options, including the amount granted, the dates they become exercisable, and the exercise price, lies with the Board, subject to certain limitations outlined in the plans. As of December 29, 2024, there were 12,929 options available for issuance under the 2022 Plan.
The vesting periods for these stock options vary, ranging from immediate vesting to a five-year vesting period. This means that some options may be exercisable immediately upon grant, while others may require the option holder to remain with the company for up to five years before they can exercise their options. Additionally, the vesting of options can be accelerated if there is a change in control of the company under certain circumstances, as defined in the Plans. Certain options also have vesting requirements based upon achieving certain operating results. The options typically expire 10 years from the date of grant or in the event of a change in control under certain circumstances, as defined in the Plans.
For a prospective franchisee, understanding the terms of these stock option plans is important. While franchisees themselves may not directly participate in these plans (as they are generally reserved for employees, directors, and consultants of the parent company), the plans can indirectly impact franchisees. For example, the incentives provided by these stock options can influence the performance and dedication of the management team overseeing the Moe's Southwest Grill brand. A well-incentivized management team may be more likely to make decisions that benefit the entire franchise system, including franchisees. Prospective franchisees should inquire about the details of these plans and how they align the interests of the management team with the success of the franchise system.