Whole Earth Brands, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

NOTE 11: STOCK-BASED COMPENSATION

On June 24, 2020, the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan (the “Plan”) was approved for the purpose of promoting the long-term financial interests and growth of the Company and its subsidiaries by attracting and retaining management and other personnel and key service providers. The Plan provides for the granting of stock options (“SOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, performance share units (“PSUs”) and other stock-based awards to officers, employees and non-employee directors of, and certain other service providers to, the Company and its subsidiaries. These awards are settled in shares of the Company’s stock and therefore classified as equity awards. Under the terms of the Plan an aggregate of 9,300,000 shares of common stock are authorized for issuance under the Plan.

RSUs generally vest ratably on the anniversary of the grant date over a period of one to three years, depending on the specific terms of each RSU agreement.

PSU awards generally cliff vest subsequent to the completion of a cumulative three-year performance period, depending on the period specified in each respective PSU agreement. The number of PSUs that ultimately vest depends on the Company’s performance relative to specified three-year cumulative financial targets established for each grant and are expected to be settled in stock.

Stock-based compensation expense for the three and six months ended June 30, 2022 was $1.6 million and $3.2 million, respectively. Stock-based compensation expense for the three and six months ended June 30, 2021 was $2.8 million and $4.5 million, respectively. Stock-based compensation expense for the three and six months ended June 30, 2021 includes $0.4 million of expense related to 2021 management bonuses that were settled in stock during the second quarter of 2022.

A summary of activity and weighted average fair values related to the RSUs is as follows:


	Six Months Ended June 30, 2022
	Shares	Weighted Average Grant Date Fair Value (per share)
Outstanding at December 31, 2021	484,744	$	13.46
Granted	548,521	7.32
Vested	(188,759)	13.58
Forfeited	(11,094)	12.79
Outstanding and nonvested at June 30, 2022	833,412	$	9.40

A summary of activity and weighted average fair values related to the RSAs is as follows:


	Six Months Ended June 30, 2022
	Shares	Weighted Average Grant Date Fair Value (per share)
Outstanding at December 31, 2021	117,801	$	9.76
Granted	82,615	6.96
Vested	(68,946)	8.34

Outstanding and nonvested at June 30, 2022	131,470	$	8.75

A summary of activity and weighted average fair values related to the PSUs is as follows:


	Six Months Ended June 30, 2022
	Shares	Weighted Average Grant Date Fair Value (per share)
Outstanding at December 31, 2021	282,141	$	13.65
Granted	569,989	6.71

Forfeited	(11,654)	12.89
Outstanding and nonvested at June 30, 2022	840,476	$	8.95

As of June 30, 2022, the Company had not yet recognized compensation costs on nonvested awards as follows (in thousands):


	Unrecognized Compensation Cost		Weighted Avg. Remaining Recognition Period (in years)
Nonvested awards	$	13,848	1.93