SHARE-BASED COMPENSATION

6 Months Ended

Jun. 26, 2022

Share-based Payment Arrangement [Abstract]

Share-based Compensation

SHARE-BASED COMPENSATION

Effective September 30, 2017, the Company adopted the 2017 Omnibus Equity Incentive Plan (the “Plan”). The Plan was amended on October 19, 2021 to increase the number of shares available for issuance under the Plan. The Plan is a comprehensive incentive compensation plan under which the Company can grant equity-based and other incentive awards to officers, employees and directors of, and consultants and advisers to, FAT Brands Inc. and its subsidiaries. The Plan provides a maximum of 4,000,000 shares available for grant.

The Company has periodically issued stock options under the Plan. All of the stock options issued by the Company to date have included a vesting period of three years, with one-third of each grant vesting annually. As of June 26, 2022, there were 2,610,936 shares of stock options outstanding with a weighted average exercise price of $10.51.

During the thirteen weeks ended June 27, 2021, the Company granted a total of 300,000 shares of its common stock to three employees (the “Grant Shares”). The Grant Shares vest one-third each year on the anniversary date of the grant. The grantees are entitled to any common dividends relating to the Grant Shares during the vesting period. The Grant Shares were valued at $2.8 million as of the date of grant. The related compensation expense will be recognized over the vesting period. There were no new grants during the twenty-six weeks ended June 26, 2022.

The Company recognized share-based compensation expense in the amount of $1.9 million and $0.2 million, during the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively. The Company recognized share-based compensation expense in the amount of $4.0 million and $0.2 million, during the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively. As of June 26, 2022, there remains $9.0 million of related share-based compensation expense relating to non-vested grants, which will be recognized over the remaining vesting period, subject to future forfeitures.