Burlington Stores, Inc. Stock Compensation Disclosure

9. Stock-Based Compensation

On May 20, 2025, the Company’s stockholders approved an amendment to the Company's 2022 Omnibus Incentive Plan to, among other things, increase the number of shares of Company common stock subject to the plan by 3,100,000.

The Company accounts for awards issued under the Plans in accordance with Topic No. 718. As of January 31, 2026, there were 6,080,426 shares of common stock available for issuance under the Company's 2022 Omnibus Incentive Plan.

Stock Options

All awards granted during Fiscal 2025, Fiscal 2024 and Fiscal 2023 generally vest in one-fourth annual increments (subject to continued employment through the applicable vesting date). The final exercise date for any option granted is the tenth anniversary of the grant date. Options granted during Fiscal 2025, Fiscal 2024 and Fiscal 2023 become exercisable if the grantee’s employment is terminated without cause or, in some instances, the recipient resigns with good reason, within a certain period of time following a change in control. Unless determined otherwise by the plan administrator, upon cessation of employment other than for cause, the majority of options that have not vested will terminate immediately, and unexercised vested options will be exercisable for a period of 60 to 180 days.

As of January 31, 2026, the Company had 1,260,295 options outstanding to purchase shares of common stock, and there was $20.8 million of unearned non-cash stock-based option compensation that the Company expects to recognize as expense over a weighted average period of 1.9 years. The awards are expensed on a straight-line basis over the requisite service period. During Fiscal 2025, the Company eliminated stock option grants and shifted to granting more restricted stock units.

During Fiscal 2025, the fair value of each stock option granted was estimated on the date of grant using the Black Scholes option pricing model. The fair value of each stock option granted during Fiscal 2025 was estimated using the following assumptions on a weighted average basis:

The expected dividend yield was based on the Company’s expectation of not paying dividends in the near term. To evaluate its volatility factor, the Company uses the historical volatility of its stock price over the expected life of the options. The risk free interest rate was based on the U.S. Treasury rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the awards being valued. The expected life of the options was estimated using historical exercise rates.

Restricted Stock Units

Restricted stock units granted during Fiscal 2025 were all service-based awards. The fair value of each unit of restricted stock granted during Fiscal 2025 was based upon the closing price of the Company’s common stock on the grant date. Most of the awards outstanding as of January 31, 2026 have graded vesting provisions that generally vest in one-fourth annual increments (subject to continued employment through the applicable vesting date). Certain awards outstanding as of January 31, 2026 cliff vest at the end of a designated service period, ranging from two years to four years from the grant date. Awards granted to non-employee members of the Company’s Board of Directors vest 100% on the first anniversary of the grant date. Following a change of control, all unvested restricted stock units shall remain unvested, provided, however, that 100% of such shares shall vest if, following such change of control, the employment of the recipient is terminated without cause or, in some instances, the recipient resigns with good reason, within a certain period of time following a change in control.

As of January 31, 2026, there was approximately $96.9 million of unearned non-cash stock-based compensation related to restricted stock units that the Company expects to recognize as expense over a weighted average period of 2.5 years. The awards are expensed on a straight-line basis over the requisite service periods.

Performance Share Units

The Company grants performance-based restricted stock units to its senior executives. Vesting of the performance stock units granted are based on continued service and the achievement of pre-established adjusted net income per share growth over a three-year performance period. Based on the Company’s achievement of these goals, each award may be earned up to 200% of the target award. In the event that actual performance is below threshold, no award will be made. Compensation costs recognized on the performance stock units are adjusted, as applicable, for performance above or below the target specified in the award.

As of January 31, 2026, there was approximately $44.9 million of unearned non-cash stock-based compensation related to performance share units that the Company expects to recognize as expense over a weighted average period of 1.7 years. The awards are expensed on a straight-line basis over the requisite service periods.