Lucky Strike Entertainment CorpLUCK
Lucky Strike Entertainment Corp Stock Compensation Disclosure
Share-Based Compensation
The Company has three stock plans: the 2017 Stock Incentive Plan (“2017 Plan”), the Lucky Strike Entertainment Corporation 2021 Omnibus Incentive Plan (“2021 Plan”) and the Lucky Strike Entertainment Corporation Employee Stock Purchase Plan (“ESPP”). The stock incentive plans are designed to attract and retain key personnel by providing them the opportunity to acquire equity interest in the Company and align the interest of key personnel with those of the Company’s stockholders.
2017 Plan
The 2017 Plan was approved on September 29, 2017 and is a broad-based plan that provides for the grant of non-qualified stock options to our executives and certain other employees for up to a maximum of 16,316,506 shares (retroactively stated for application of the recapitalization). The 2017 Plan was subsequently amended on January 7, 2020 to 50,581,181 shares (retroactively stated for application of the recapitalization). As of the Closing Date, no additional options are available to be granted under the 2017 Plan. The 2017 Plan was administered by the Board of Directors, which approved grants to individuals, number of options, terms, conditions, performance measures, and other provisions of the award. Awards were generally granted based on the individual’s performance. Stock options granted under the 2017 Plan had a maximum contractual term of twelve years from the date of grant, an exercise price not less than the fair value of the stock on the grant date and generally vested over four years in equal quarterly installments for the time-based options and upon occurrence of a liquidity event for the performance-based options.
A summary of the 2017 Plan stock options outstanding at June 29, 2025 and June 30, 2024, and changes during the years then ended is presented below:
| Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
| Outstanding at July 2, 2023 | 20,065,926 | $ | 7.20 | 8.49 | |||||||||||||||||||
| Exercised - stock | (99,092) | 3.30 | $ | 959 | |||||||||||||||||||
| Forfeited and cancelled | (1,490) | 4.13 | |||||||||||||||||||||
| Outstanding at June 30, 2024 | 19,965,344 | $ | 7.22 | 7.51 | |||||||||||||||||||
| Exercised - stock | (4,082,100) | 7.92 | $ | 11,809 | |||||||||||||||||||
| Outstanding at June 29, 2025 | 15,883,244 | $ | 7.05 | 6.51 | $ | 35,963 | |||||||||||||||||
| Vested as of June 29, 2025 | 15,883,244 | $ | 7.05 | 6.51 | $ | 35,963 | |||||||||||||||||
| Exercisable as of June 29, 2025 | 15,883,244 | $ | 7.05 | 6.51 | $ | 35,963 | |||||||||||||||||
2021 Plan
The 2021 Plan was effective December 14, 2021 and provides for the grant of equity awards to an individual employed by the Company or Subsidiary, a director or officer of the Company or Subsidiary, a consultant or advisor to the Company or an Affiliate or to a prospective employee, director, officer, consultant or director who has accepted an offer of employment or service from the Company. Equity awards include incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, RSUs and other share-based awards granted under the 2021 Plan. Shares to be granted under the 2021 Plan shall be not more than 26,446,033 shares of common stock, subject to an annual increase on the first day of each calendar year beginning January 1, 2022. As of June 29, 2025, the Company had 34,303,795 shares of common stock authorized under the 2021 Plan. The Compensation Committee of the Board of Directors or subcommittee thereof, administers the 2021 Plan. The Compensation Committee may delegate all or any portion of its responsibilities and powers to any person(s) selected by it, except for grants of Awards to persons who are non-employee members of the Board or are otherwise subject to Section 16 of the Exchange Act. Any such delegation may be revoked by the Committee at any time. The Board may at any time and from time to time grant awards and administer the 2021 Plan with respect to such awards. In any such case, the Board shall have all the authority granted to the Compensation Committee under the 2021 Plan. The Compensation Committee approves grants to individuals, number of options, terms, conditions, performance measures, and other provisions of the award. Stock options granted under the 2021 Plan have a maximum contractual term of ten years from the date of grant, unless trading is prohibited by the Company’s insider-trading policy or a Company-imposed blackout period, in which case the terms shall be extended automatically, and an exercise price not less than the fair value of the stock on the grant date. The manner and timing of vesting and expiration are determined by the Compensation Committee.
The Company issued unvested stock options to certain employees. The unvested stock options vest based on a service condition. The average expected life represents the weighted average period of time that options granted are expected to be outstanding. The following table presents the significant assumptions used in the Black-Scholes model with the following range of weighted average assumptions for options granted in the fiscal years ended June 29, 2025 and June 30, 2024:
| June 29, 2025 | June 30, 2024 | ||||||||||
| Expected term in years | 10.00 | 10.00 | |||||||||
| Interest rate | 4.31 | % | 3.96 | % | |||||||
| Volatility | 50.0 | % | 50.0 | % | |||||||
| Dividend yield | 2.12 | % | 1.85 | % | |||||||
A summary of stock options outstanding under the 2021 Plan at June 29, 2025 and June 30, 2024, and changes during the period then ended is presented below:
| Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
| Outstanding at July 2, 2023 | 9,860,027 | $ | 13.89 | ||||||||||||||||||||
| Granted | 689,908 | 17.31 | |||||||||||||||||||||
| Forfeited and cancelled | (1,396,832) | 15.45 | |||||||||||||||||||||
| Outstanding at June 30, 2024 | 9,153,103 | $ | 13.91 | 7.83 | |||||||||||||||||||
| Granted | 509,622 | 10.38 | |||||||||||||||||||||
| Settled - cash | (773,753) | 10.51 | |||||||||||||||||||||
| Forfeited and cancelled | (53,300) | 15.59 | |||||||||||||||||||||
| Outstanding at June 29, 2025 | 8,835,672 | $ | 13.99 | 6.94 | $ | — | |||||||||||||||||
| Vested as of June 29, 2025 | 3,849,279 | $ | 12.20 | 6.99 | $ | — | |||||||||||||||||
| Exercisable as of June 29, 2025 | 3,849,279 | $ | 12.20 | 6.99 | $ | — | |||||||||||||||||
The Company issued RSUs to employees and board members that vest based on service conditions (Service based RSUs). The Company measures the grant-date fair value based on the price of the Company's shares on the grant date. The following table presents a summary of RSUs subject to time-based service conditions and changes during the period then ended as of June 29, 2025 and June 30, 2024:
| Number of Units | Weighted Average Grant Date Fair Value Per Share | ||||||||||
| Outstanding at July 2, 2023 | 715,869 | $ | 10.97 | ||||||||
| Granted | 398,560 | 11.80 | |||||||||
| Vested | (351,384) | 10.89 | |||||||||
| Forfeited | (86,981) | 11.48 | |||||||||
| Outstanding at June 30, 2024 | 676,064 | $ | 11.44 | ||||||||
| Granted | 471,474 | 10.66 | |||||||||
| Vested | (393,393) | 10.95 | |||||||||
| Forfeited | (56,781) | 11.57 | |||||||||
| Outstanding at June 29, 2025 | 697,364 | $ | 11.18 | ||||||||
The Company issued earnout RSUs to employees that vest upon the achievement of market conditions with a 5-year expiration date (Earnout RSUs). The fair value of the earnout RSUs was determined based on a Monte-Carlo simulation method reflecting those market conditions, and the Company recognizes compensation expense evenly over the 5-year
service period. The following table presents a summary of the earnout RSUs subject to market conditions and changes during the period then ended as of June 29, 2025 and June 30, 2024:
| Number of Units | Weighted Average Grant Date Fair Value Per Share | ||||||||||
| Outstanding at July 2, 2023 | 55,152 | $ | 7.86 | ||||||||
| Forfeited | (11,687) | 7.86 | |||||||||
| Outstanding at June 30, 2024 | 43,465 | $ | 7.86 | ||||||||
| Forfeited | (3,545) | 7.86 | |||||||||
| Outstanding at June 29, 2025 | 39,920 | $ | 7.86 | ||||||||
The Company issued RSUs to employees that vest based upon the achievement of market and service conditions (market and service based RSUs). The fair value of those RSUs was determined using a Monte-Carlo simulation method reflecting those market conditions. The following table presents a summary those RSUs subject to market and service conditions, and changes during the period then ended as of June 29, 2025 and June 30, 2024:
| Number of Units | Weighted Average Grant Date Fair Value Per Share | ||||||||||
| Outstanding at July 2, 2023 | 291,804 | $ | 7.50 | ||||||||
| Granted | 4,250 | 9.28 | |||||||||
| Forfeited | (52,675) | 7.75 | |||||||||
| Outstanding at June 30, 2024 | 243,379 | $ | 7.48 | ||||||||
| Granted | 509,861 | 15.07 | |||||||||
| Vested | (183,075) | 6.64 | |||||||||
| Forfeited | (19,300) | 11.85 | |||||||||
| Outstanding at June 29, 2025 | 550,865 | $ | 14.63 | ||||||||
As of June 29, 2025, the total share-based compensation cost not yet recognized is as follows:
| Award Plan | Unrecognized Compensation Cost | Weighted Average Remaining Period of Recognition | |||||||||||||||
| Stock options | 2021 Plan | $ | 11,976 | 2.27 | |||||||||||||
| Service based RSUs | 2021 Plan | 5,286 | 1.71 | ||||||||||||||
| Market and service based RSUs | 2021 Plan | 5,988 | 2.32 | ||||||||||||||
| Earnout RSUs | 2021 Plan | 92 | 1.46 | ||||||||||||||
| ESPP | ESPP | 276 | 0.50 | ||||||||||||||
| Total unrecognized share-based compensation cost | $ | 23,618 | 2.16 | ||||||||||||||
Share-based compensation recognized in the consolidated statements of operations is as follows:
| Fiscal Year Ended | |||||||||||||||||||||||
| Award Plan | June 29, 2025 | June 30, 2024 | July 2, 2023 | ||||||||||||||||||||
| Stock options | 2021 Plan | $ | 9,486 | $ | 8,702 | $ | 9,708 | ||||||||||||||||
| Service based RSUs | 2021 Plan | 4,478 | 4,062 | 4,267 | |||||||||||||||||||
| Market and service based RSUs | 2021 Plan | 1,967 | 482 | 630 | |||||||||||||||||||
| Earnout RSUs | 2021 Plan | 48 | 40 | 538 | |||||||||||||||||||
Other stock-based awards & settlements (1) | 2021 Plan | 5,249 | — | — | |||||||||||||||||||
| ESPP | ESPP | 404 | 489 | 599 | |||||||||||||||||||
| Total share-based compensation expense | $ | 21,632 | $ | 13,775 | $ | 15,742 | |||||||||||||||||
(1) Consists of the impact of the $21,053 cash settlement of 1,747,434 shares of Class A common stock and 773,753 stock options as part of an employment separation agreement with a long-time executive and Director of the Company during fiscal 2025, which resulted in an equity charge of $16,244 within Additional paid-in capital and share-based compensation expense within Selling, general, and administrative expenses of $4,809. The settled Class A common stock and stock options were then cancelled.
ESPP
On December 14, 2021, the Board of Directors approved the ESPP, subject to stockholder approval. The ESPP became effective July 1, 2022, and purchase rights may be granted under the ESPP prior to stockholder approval, but no purchase rights may be exercised unless and until stockholder approval is obtained. The maximum number of shares of the Company’s Class A common stock available for sale under the ESPP shall not exceed an aggregate of 4,926,989 shares, subject to an annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the least of (i) 1% of the aggregate number of Shares outstanding on the final day of the immediately preceding calendar year, (ii) 1,753,487 Shares and (iii) such number of shares as is determined by the Board. If the aggregate funds available for purchase of the Shares would cause an issuance of Shares in excess of the Shares then available for issuance under the ESPP, the Committee will proportionately reduce the number of Shares that would otherwise be purchased by each participant to eliminate the excess. Under the ESPP, employees are offered the option to purchase discounted shares of Class A common stock during offering periods designated by the administrator. Each offering period will be one year commencing each January 1 and ending on December 31 with the exception of the initial offering period, which commenced on July 1, 2022 and will end on December 31, 2022. Shares are purchased on the applicable exercise dates, which is the last trading day of each purchase period. The Company uses the Black-Scholes option pricing model to determine the grant date fair values of ESPP awards.
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.