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Stock Based Compensation
 9 Months Ended
Mar. 27, 2022
Share-based Payment Arrangement [Abstract]  
Stock Based Compensation Stock Based Compensation
The Company has three stock incentive plans: the 2017 Stock Incentive Plan (“2017 Plan”), the Bowlero Corp. 2021 Omnibus Incentive Plan (“2021 Plan”) and the Bowlero Corp. Employee Stock Purchase Plan (“ESPP”). These stock incentive plans are 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. There has been no activity or costs incurred for the ESPP.
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 December 15, 2021, 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.
The Company recorded compensation cost for all performance-based and unvested time-based options of $24,516 and $138, respectively, due to the Business Combination on December 15, 2021, since the terms of these options were such that the options vested upon the occurrence of a liquidity event. The Business Combination was a liquidity event that triggered the vesting of these options. For the nine months ended March 28, 2021, we recorded compensation cost of $2,351 in selling, general and administrative expenses and $20 in cost of revenues within the condensed consolidated statements of operations.
A summary of stock options outstanding under the 2017 Plan at March 27, 2022, and changes during the nine months then ended is presented below. The aggregate intrinsic value, which is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, is before applicable income taxes and represents the amount option holders realized (in the case of exercised options) or would realize if all in-the-money options had been exercised on the last business day of the period. The total intrinsic value of options exercised during the three and nine months ended March 27, 2022 was $69,985, and the total intrinsic value of options repurchased during the three and nine months ended March 27, 2022 was $4,362.
Number of OptionsWeighted Average Exercise Price Per ShareWeighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at June 27, 202149,331,480$8.60 9.13$— 
Granted—— — — 
Exercised - stock10,360,0783.25 — — 
Repurchased - cash639,122— — — 
Forfeited and cancelled17,962,45313.53 — — 
Outstanding at March 27, 202220,369,827$7.14 9.74$75,696 
Vested as of March 27, 202220,369,8277.14 9.7475,696 
Exercisable as of March 27, 202220,369,8277.14 9.7475,696 
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 stock 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. 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.
During the nine-months ended March 27, 2022, the Company recorded $3,323 in compensation cost recognized for 665,912 fully vested options reallocated and $14,228 in compensation cost for 1,422,813 shares for a share-based bonus.
As a result of the Business Combination, the Company issued fully vested and unvested stock options to certain employees. The unvested stock options vest based on a service condition. The stock options are measured based on a Black-Scholes-Merton model, and are expensed evenly over the service period. The expected volatility is based on historical volatility of companies considered comparable to the Company. The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The average expected life represents the weighted average period of time that options granted are expected to be outstanding. The following table presents the significant assumptions used in the Black-Scholes model with the following range of weighted average assumptions for options granted in fiscal 2022:
Expected term in years6.68
Interest rate1.39 %
Volatility55.6 %
Dividend yield—
A summary of stock options outstanding under the 2021 Plan at March 27, 2022, and changes during the period then ended is presented below:
Number of OptionsWeighted Average Exercise Price Per ShareWeighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at December 14, 2021—$— $— $— 
Granted9,415,91213.72 10.00— 
Exercised—— — — 
Forfeited and cancelled—— — — 
Repurchased or settled—— — — 
Outstanding at March 27, 20229,415,912$13.72 9.75$573 
Vested as of March 27, 2022665,91213.72 9.75573 
Exercisable as of March 27, 2022665,91213.72 9.75573 
The Company issued RSUs to employees and board members that vest based on service conditions (Service based RSUs). The Company measures the grant-date fair value based on the price of the Company's shares on the grant date. The following table presents a summary of RSUs subject to time-based service conditions and changes during the period then ended is presented below as of March 27, 2022:
Number of UnitsWeighted Average Grant Date
Fair Value Per Share		Weighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at December 14, 2021—$— $— $— 
Granted933,6009.72 2.51— 
Vested—— — — 
Forfeited—— — — 
Outstanding at March 27, 2022933,600$9.72 2.41$10,139 
As a result of the Business Combination, the Company issued earnout RSUs to employees that vest upon the achievement of market conditions with a 5-year expiration date (Earnout RSUs). The fair value of the earnout RSUs was determined based on a Monte-Carlo simulation method reflecting those market conditions, and the Company recognizes compensation expense evenly over the 5-year service period. The following table presents a summary of the earnout RSUs subject to market conditions and changes during the period then ended as of March 27, 2022:
Number of UnitsWeighted Average Grant Date
Fair Value Per Share		Weighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at December 14, 2021—$— — $— 
Granted152,3708.16 5.00— 
Vested—— — — 
Forfeited10,1988.16 — — 
Outstanding at March 27, 2022142,172$8.16 4.72$1,544 
The Company issued RSUs to employees and board members that vest based upon the achievement of market and service conditions (Market and service based RSUs). The fair value of those RSUs was determined using a Monte-Carlo simulation method reflecting those market conditions. The following table presents a summary those RSUs subject to market and service conditions, and changes during the period then ended as of March 27, 2022:
Number of UnitsWeighted Average Grant Date
Fair Value Per Share		Weighted Average Remaining Contractual TermAggregate Intrinsic Value
Outstanding at December 14, 2021—$— —$— 
Granted262,2006.64 2.79— 
Vested—— —— 
Forfeited—— —— 
Outstanding at March, 27, 2022262,200$6.64 2.72$2,847 
As of March 27, 2022, the total compensation cost not yet recognized is as follows:
Award PlanUnrecognized Compensation CostWeighted Average Period over which its expected to be recognized
Stock options2021 Plan$39,812 6.73
Service based RSUs2021 Plan8,472 2.41
Market and service based RSUs2021 Plan1,697 2.72
Earnout RSUs2021 Plan1,095 4.72
Total unrecognized compensation cost$51,076 5.84
Stock-based compensation recognized in the condensed consolidated statement of operations for the nine months ended March 27, 2022 is as follows:
Award Plan Selling, general and administrative expensesCost of revenuesTotal
Performance-based options2017 Plan$24,468 $48 $24,516 
Time-based options2017 Plan916 36 952 
Stock options2021 Plan5,966 — 5,966 
Service based RSUs2021 Plan592 13 605 
Market and service based RSUs2021 Plan41 3 44 
Earnout RSUs2021 Plan65 — 65 
Share-based bonus—14,228 — 14,228 
Total stock based compensation expense$46,276 $100 $46,376