Blue Bird CorpBLBD
Blue Bird Corp Stock Compensation Disclosure
15. Share-Based Compensation
In fiscal 2015, we adopted the Omnibus Equity Incentive Plan ("Plan") and in fiscal 2020, amended and restated it. The Plan is administered by the Compensation Committee of our Board of Directors and the Committee may grant awards for the issuance of up to an aggregate of 5,200,000 shares of common stock in the form of non-qualified stock options, incentive stock options, stock appreciation rights (collectively, “SARs,” and each individually, a “SAR”), restricted stock, restricted stock units, performance shares, performance units, incentive bonus awards, other cash-based awards and other stock-based awards. The exercise price of a share subject to a stock option may not be less than 100% of the fair market value of a share of the Company's common stock with respect to the grant date of such stock option. No portion of the options vest and become exercisable after the date on which the optionee’s service with the Company and its subsidiaries terminates. The vesting of all unvested shares of common stock subject to an option will automatically be accelerated in connection with a “Change in Control,” as defined in the Plan.
New shares of the Company's common stock are issued upon stock option exercises, or at the time of vesting for restricted stock. We have granted performance awards as part of our overall compensation plans. The vesting of these awards is primarily based upon the attainment of certain performance metrics established under our annual Management Incentive Plan ("MIP"), with the Compensation Committee of the Board of Directors maintaining final discretion over vesting amounts.
Stock-based payments to employees, including grants of stock options, restricted stock and restricted stock units ("RSU"), are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. Because we do not have sufficient history with respect to stock option activity and post-vesting cancellations, the expected term assumption is based on the simplified method under U.S. GAAP, which is based on the vesting period and contractual term for each vesting tranche of awards. The mid-point between the vesting date and the expiration date is used as the expected term under this method. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury zero-coupon issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend on its common stock. Restricted stock and RSUs are valued based on the intrinsic value of the difference between the exercise price, if any, of the award and the fair market value of our common stock on the grant date.
Beginning in fiscal 2024, the Compensation Committee decided that all new annual stock awards issued in accordance with the terms of the Plan would be RSUs.
We expense any award with graded-vesting features using a straight-line attribution method and account for forfeitures in recording share-based compensation expense as they occur.
RSU Awards
The following table summarizes the Company's RSU activity for the fiscal year presented:
| 2025 | ||||||||||||||
| Restricted Stock Activity | Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||||
| Balance, beginning of year | 635,648 | $ | 23.07 | |||||||||||
| Granted | 302,129 | 38.09 | ||||||||||||
| Vested | (643,475) | 26.51 | ||||||||||||
| Forfeited | (3,300) | 34.87 | ||||||||||||
| Balance, end of year | 291,002 | 31.80 | ||||||||||||
The weighted-average grant date fair value of restricted stock awards granted in fiscal 2024 and fiscal 2023 was $21.35 and $23.41, respectively.
Compensation expense for restricted stock awards, recognized in selling, general and administrative expenses on the Consolidated Statements of Operations, was $13.1 million, $7.2 million, and $3.2 million for fiscal 2025, fiscal 2024, and fiscal 2023, respectively, with associated tax benefits of $3.3 million, $1.8 million, and $0.8 million, respectively. At September 27, 2025, unrecognized compensation cost related to restricted stock awards totaled $3.6 million and is expected to be recognized over a weighted-average period of 0.7 years.
Stock Option Awards
The following table summarizes the Company's stock option activity for the fiscal year presented:
| 2025 | ||||||||||||||
| Number of Options | Weighted Average Exercise Price per Share ($) | |||||||||||||
| Outstanding options, beginning of year | 435,427 | $ | 16.27 | |||||||||||
| Granted | 41,506 | 12.35 | ||||||||||||
| Exercised (1) | (277,291) | 16.88 | ||||||||||||
| Expired | — | — | ||||||||||||
| Forfeited | — | — | ||||||||||||
| Outstanding options, end of year (2) | 199,642 | $ | 14.60 | |||||||||||
| Fully vested and exercisable options, end of year (3) | 116,624 | $ | 16.20 | |||||||||||
(1) Stock options exercised during the fiscal year had an aggregate intrinsic value totaling $9.7 million.
(2) Stock options outstanding at the end of the fiscal year had $8.7 million intrinsic value.
(3) Fully vested and exercisable options at the end of the fiscal year had $4.9 million intrinsic value.
The total aggregate intrinsic value of stock options exercised during fiscal 2024 and fiscal 2023 was $6.2 million and $0.3 million, respectively.
Compensation expense for stock option awards, recognized in selling, general and administrative expenses on the Consolidated Statements of Operations, was $1.6 million, $1.2 million, and $0.8 million for fiscal 2025, fiscal 2024, and fiscal 2023, respectively, with associated tax benefits of $0.4 million, $0.3 million, and $0.2 million, respectively. At September 27, 2025, unrecognized compensation cost related to stock option awards totaled $0.3 million and is expected to be recognized over a weighted-average period of 0.2 years.
The fair value of each option award at grant date was estimated using the Black-Scholes option-pricing model with the following assumptions made and resulting grant-date fair values during the fiscal years presented:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Expected volatility | 61 | % | 62 | % | 51 | % | ||||||||||||||
| Expected dividend yield | 0 | % | 0 | % | 0 | % | ||||||||||||||
| Risk-free interest rate | 4.17 | % | 4.24 | % | 3.78 | % | ||||||||||||||
| Expected term (in years) | 4.5 | 4.5 - 5.0 | 4.5 - 6.0 | |||||||||||||||||
| Weighted-average grant-date fair value | $ | 33.55 | $ | 16.30 | $ | 6.17 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 24, 2025 | Showing above |
| 2024 | Nov 25, 2024 | |
| 2023 | Dec 11, 2023 | |
| 2022 | Dec 12, 2022 | |
| 2021 | Dec 15, 2021 | |
| 2020 | Dec 17, 2020 | |
| 2019 | Dec 12, 2019 | |
| 2018 | Dec 12, 2018 | |
| 2017 | Dec 8, 2017 | |
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.