Quarterly report pursuant to Section 13 or 15(d)

Equity-Based Compensation

v3.22.1
Equity-Based Compensation
6 Months Ended
Apr. 02, 2022
Share-based Payment Arrangement [Abstract]  
Equity-Based Compensation

Note 14—Equity-Based Compensation

Equity-Based Compensation

2020 Omnibus Incentive Plan

In October 2020, we adopted the Leslie’s, Inc. 2020 Omnibus Incentive Plan (the “Plan”). The Plan provides for the grant of awards such as stock options to purchase Leslie’s common stock (each, a “Stock Option”) and restricted stock units (“RSUs”) which may settle in Leslie’s, Inc. common stock to our directors, executives and eligible employees of the Company. Stock Options granted under the Plan generally expire ten years from the date of grant and consist of Stock Options that vest upon the satisfaction of time-based requirements (“Service Stock Option”) and performance-based Stock Options that vest upon satisfaction of a performance-based requirement (“Performance Stock Options”). RSUs consist of grants that vest ratably upon the satisfaction of time-based requirements (“Service RSU”) and performance-based RSUs that vest upon satisfaction of performance-based requirements (“Performance RSU”). In each case, vesting of the Company’s outstanding and unvested Stock Options and RSUs is contingent upon the holder’s continued service through the date of each applicable vesting event. As of April 2, 2022, we had approximately 7.5 million shares of common stock available for future grants under the Plan.

As of April 2, 2022, the aggregate unamortized value of all outstanding equity-based compensation awards was approximately $34.8 million, which is expected to be recognized over a weighted average period of approximately 2.8 years.

Stock Options

The following tables summarizes our Stock Option activity under the Plan during the six months ended (in thousands, except per share amounts):

 

 

April 2, 2022

 

 

 

Number of Options

 

 

Weighted Average
Exercise Price

 

Outstanding, Beginning

 

 

4,877

 

 

$

18.22

 

Granted

 

 

 

 

 

 

Exercised

 

 

(19

)

 

 

17.00

 

Forfeited

 

 

(334

)

 

 

18.33

 

Balance, Ending

 

 

4,524

 

 

$

18.22

 

 

 

 

 

 

 

 

Vested as of April 2, 2022(1)

 

 

1,363

 

 

$

17.71

 

(1)
Includes 550,736 stock options that were subject to the Company’s achievement of the fiscal 2021 net income target which was deemed to have been met during the six months ended April 2, 2022.

 

 

 

As of April 2, 2022

 

Aggregate intrinsic value of options outstanding

 

$

12,009

 

Unamortized value of unvested stock options

 

$

12,122

 

Weighted average period (years) that expense is expected to be recognized

 

 

2.1

 

Weighted average remaining contractual life (years) for options outstanding

 

 

9.0

 

 

Restricted Stock Units

The following table summarizes our RSU activity under the Plan during the six months ended (in thousands, except per share amounts):

 

 

April 2, 2022

 

 

 

Number of RSUs

 

 

Weighted Average
Grant Date Fair Value

 

Outstanding, Beginning

 

 

3,135

 

 

$

6.90

 

Granted

 

 

455

 

 

 

19.94

 

Vested

 

 

(444

)

 

 

4.13

 

Forfeited

 

 

(276

)

 

 

6.76

 

Balance, Ending

 

 

2,870

 

 

$

9.41

 

 

 

 

As of April 2, 2022

 

Unamortized value of unvested RSUs

 

$

22,701

 

Weighted average period (years) expense is expected to be recognized

 

 

3.2

 

During the three and six months ended April 2, 2022, equity-based compensation expense was $2.9 million and $5.7 million, respectively, and includes Company related payroll tax expense. During the three months ended April 3, 2021, equity-based compensation expense was $2.0 million. During the six months ended April 3, 2021, equity-based compensation expense was $14.1 million and was primarily due to the vesting of performance-based equity units as a result of the Company’s IPO. These costs are reported in selling, general and administrative expenses (“SG&A”) in our condensed consolidated statements of operations.