ARK RESTAURANTS CORPARKR
ARK RESTAURANTS CORP Stock Compensation Disclosure
STOCK OPTIONS
The Company has options outstanding under two stock option plans, the 2016 Stock Option Plan and the 2022 Stock Option Plan. Options granted under both plans are exercisable at prices at least equal to the fair market value of such stock on the dates the options were granted and expire 10 years after the date of grant.
On January 18, 2024, options to purchase 107,500 shares of common stock at an exercise price of $14.80 per share were granted to officers and directors of the Company under the 2022 Stock Option Plan (the "2024 Grant"). Such options are exercisable as to 25% of the shares commencing on the first anniversary of the date of grant and as to an additional 25% on each yearly anniversary thereafter. The grant date fair value of these stock options was $4.39 per share and totaled approximately $472,000.
On December 2, 2024, options to purchase 10,000 shares of common stock at an exercise price of $9.99 per share were granted to an employee of the Company under the 2022 Stock Option Plan (the "2025 Grant"). Such options are exercisable as to 25% of the shares commencing on the first anniversary of the date of grant and as to an additional 25% on each yearly anniversary thereafter. The grant date fair value of these stock options was $2.94 per share and totaled approximately $29,000.
The Company generally issues new shares upon the exercise of employee stock options.
The fair value of each of the Company’s stock options is estimated on the date of grant using a Black-Scholes option-pricing model that uses assumptions that relate to the expected volatility of the Company’s common stock, the expected dividend yield of the Company’s stock, the expected life of the options and the risk-free interest rate. The assumptions used for the 2024 Grant include a risk-free interest rate of 3.2%, volatility of 49.7%, a dividend yield of 4.2% and an expected life of 10 years and the assumptions used for the 2025 Grant include a risk-free interest rate of 4.1%, volatility of 34.1%, a dividend yield of 3.7% and an expected life of 10 years.
The Company also maintains a Section 162(m) Cash Bonus Plan. Under the Company's Section 162(m) Cash Bonus Plan, compensation paid in excess of $1,000,000 to any employee who is the chief executive officer or one of the three highest paid executive officers on the last day of that tax year (other than the chief executive officer or the chief financial officer) is not tax deductible.
The following table summarizes stock option activity under all plans:
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| Shares | Weighted Average Exercise Price | Weighted Average Contractual Term | Aggregate Intrinsic Value | Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value | |||||||||||||||||||||||||||||||||||
| Outstanding, beginning of year | 415,750 | $ | 17.89 | 6.3 years | 471,250 | $ | 19.57 | ||||||||||||||||||||||||||||||||||
| Options: | |||||||||||||||||||||||||||||||||||||||||
| Granted | 10,000 | $ | 9.99 | 107,500 | $ | 14.80 | |||||||||||||||||||||||||||||||||||
| Exercised | (2,000) | $ | 10.65 | — | |||||||||||||||||||||||||||||||||||||
| Canceled or expired | (36,500) | $ | 18.63 | (163,000) | $ | 20.70 | |||||||||||||||||||||||||||||||||||
| Outstanding and expected to vest, end of year | 387,250 | $ | 17.66 | 5.5 years | $ | — | 415,750 | $ | 17.89 | $ | 83,000 | ||||||||||||||||||||||||||||||
| Exercisable, end of year | 306,000 | $ | 18.52 | 4.8 years | $ | — | 276,875 | $ | 19.92 | $ | 41,000 | ||||||||||||||||||||||||||||||
| Shares available for future grant | 360,000 | 370,000 | |||||||||||||||||||||||||||||||||||||||
Compensation cost charged to operations for the years ended September 27, 2025 and September 28, 2024 for stock-based compensation programs was approximately $146,000 and $237,000, respectively, and total stock-based compensation activity for the years ended September 27, 2025 and September 28, 2024 was $34,000 and ($919,000), respectively, which includes reversal of stock-based compensation expense relating to forfeitures in the amounts of $112,000 and $1,156,000 for the years ended September 27, 2025 and September 28, 2024, respectively. Compensation cost recognized is classified as a general and administrative expense in the consolidated statements of operations.
As of September 27, 2025, there was approximately $347,000 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of 2.5 years.
The following table summarizes information about stock options outstanding as of September 27, 2025:
| Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||||||||||||||
| Range of Exercise Prices | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining contractual life (in years) | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining contractual life (in years) | ||||||||||||||||||||||||||||||||||||||
| $9.99 | 10,000 | $ | 9.99 | 9.2 | — | $ | — | — | ||||||||||||||||||||||||||||||||||||
| $10.65 | 68,750 | $ | 10.65 | 5.2 | 68,750 | $ | 10.65 | 5.2 | ||||||||||||||||||||||||||||||||||||
| $14.80 | 87,500 | $ | 14.80 | 8.3 | 21,875 | $ | 14.80 | 8.3 | ||||||||||||||||||||||||||||||||||||
| $17.80 | 22,500 | $ | 17.80 | 6.9 | 16,875 | $ | 17.80 | 6.9 | ||||||||||||||||||||||||||||||||||||
| $21.90 | 156,000 | $ | 21.90 | 4.4 | 156,000 | $ | 21.90 | 4.4 | ||||||||||||||||||||||||||||||||||||
| $19.61 | - | $22.30 | 42,500 | $ | 21.02 | 3.2 | 42,500 | $ | 21.02 | 3.2 | ||||||||||||||||||||||||||||||||||
| 387,250 | $ | 17.66 | 5.5 | 306,000 | $ | 18.52 | 4.8 | |||||||||||||||||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 18, 2025 | Showing above |
| 2018 | Dec 20, 2018 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.