Equity Based Compensation |
3 Months Ended | |||||||||||||||||||||||||||||||||||
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Apr. 04, 2026 | ||||||||||||||||||||||||||||||||||||
| E W C Ventures L L C And Subsidiaries [Member] | ||||||||||||||||||||||||||||||||||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||
| Equity Based Compensation | 6. Equity Based Compensation 2025 Inducement Plan On March 21, 2025, the board of directors of the Company (the “Board”) approved the European Wax Center, Inc. 2025 Inducement Plan (the “2025 Inducement Plan”). In accordance with Nasdaq Listing Rule 5635(c)(4), the Company did not seek approval of the 2025 Inducement Plan by its stockholders. Pursuant to the Inducement Plan, the Company may grant nonqualified stock options, stock appreciation rights, restricted stock units and certain other stock-based awards for up to a total of 4,000,000 shares of Class A Common Stock of the Company, par value $0.00001 per share, to employees entering into employment or returning to employment after a bona fide period of non-employment with the Company.
Restricted Stock Units During the 13 weeks ended April 5, 2025, we granted 1,615,782 restricted stock units (“RSUs”) to certain employees and directors under the 2021 Omnibus Incentive Plan (the “2021 Incentive Plan”). In addition, during the 13 weeks ended April 5, 2025, we granted 244,000 RSUs to certain employees under the 2025 Inducement Plan. The RSUs granted generally vest on the anniversaries of the date of grant over a period of two to four years, subject in all cases to continued employment on the applicable vesting date. The total grant date fair value of the RSUs will be recognized as equity-based compensation expense over the vesting period. The weighted average grant date fair values of the RSUs granted during the 13 weeks ended April 5, 2025 was $5.00. The weighted average grant date fair values of the RSUs granted were equal to the closing price of the underlying Class A common stock on the grant dates. No RSUs were granted during the 13 weeks ended April 4, 2026.
Class A Common Stock Options During the 13 weeks ended April 5, 2025, we granted 1,767,187 options, to certain employees under the 2021 Incentive Plan. In addition, during the 13 weeks ended April 5, 2025, we granted 900,000 options to certain employees under the 2025 Inducement Plan. The weighted average exercise prices of options granted during the 13 weeks ended April 5, 2025 were $8.19 per share. The options granted have a ten-year contractual term and will cliff vest on either the third or fourth anniversary of the grant date, subject in all cases to continued employment on the applicable vesting date. The weighted average grant date fair values of the options were $3.47 for the 13 weeks ended April 5, 2025. The total grant date fair value of the stock options will be recognized as equity-based compensation expense over the vesting period. As these options were granted with exercise prices 20% higher than the closing price, it was determined that the options contained an implicit market condition. As such, the Company estimated the fair value of the options using a trinomial lattice model. No stock options were granted during the 13 weeks ended April 4, 2026.
The following table presents the weighted average assumptions used in the lattice model to determine the fair value of the options granted during the 13 weeks ended April 5, 2025:
A description of each of the inputs to the lattice model is as follows: • Expected dividend yield - The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention to not pay regular dividends in the foreseeable future. An increase in the expected dividend yield would decrease compensation expense. • Expected volatility - This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. The expected volatility was based on the historical volatility of the Company as well as that of a group of guideline companies. An increase in expected volatility would increase compensation expense. • Risk-free interest rate - This is the U.S. Treasury rate as of the measurement date having a term approximating the contractual term of the award. An increase in the risk-free interest rate would increase compensation expense. •
Suboptimal exercise factor - The multiple of the exercise price at which an option exercise would be expected to occur. An increase in the suboptimal exercise factor would increase compensation expense. |
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