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

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

NOTE 10: STOCK-BASED COMPENSATION

On June 24, 2020, the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan (the “2020 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. On June 8, 2023, the Company’s stockholders’ approved the Amended and Restated Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan (the “Amended 2020 Plan”), which increased the number of shares authorized under the Amended 2020 Plan by 4,000,000 shares. Subsequent to the amendment and restatement, an aggregate of 13,300,000 shares of common stock are authorized for issuance under the Amended 2020 Plan. 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.

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 the 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 cumulative financial targets established for each grant and are expected to be settled in stock.

Stock-based compensation expense for the three and nine months ended September 30, 2023 was $2.5 million and $7.3 million, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2022 was $1.7 million and $5.0 million, respectively.

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


	Nine Months Ended September 30, 2023
	Shares	Weighted Average Grant Date Fair Value (per share)
Outstanding at December 31, 2022	1,538,759	$	6.65
Granted	3,014,658	2.56
Vested	(1,205,687)	6.29
Forfeited	(361,178)	3.99
Outstanding and nonvested at September 30, 2023	2,986,552	$	3.02

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


	Nine Months Ended September 30, 2023
	Shares	Weighted Average Grant Date Fair Value (per share)
Outstanding at December 31, 2022	131,470	$	8.75
Granted	141,280	4.07
Vested	(14,862)	8.75

Outstanding and nonvested at September 30, 2023	257,888	$	6.18

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


	Nine Months Ended September 30, 2023
	Shares	Weighted Average Grant Date Fair Value (per share)
Outstanding at December 31, 2022	631,377	$	8.49
Granted	1,934,388	2.20

Forfeited	(209,885)	4.73
Outstanding and nonvested at September 30, 2023	2,355,880	$	3.66

As of September 30, 2023, 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	$	9,976	1.33

The nonvested awards excludes unvested PSUs that are deemed not probable of vesting constituting $4.7 million of unrecognized compensation expense at September 30, 2023.