On May 6, 2008, the Company’s shareholders approved the 2008 Stock Incentive Plan (the “2008 Plan”). On May 6, 2014, the Company’s shareholders approved the 2014 Stock Incentive Plan (as amended and restated, the “2014 Plan”, and together with the 2008 Plan, the “Stock Plans”), which replaced the 2008 Plan for all equity-based awards granted on or after May 6, 2014. The 2014 Plan is designed to promote the long-term financial interests and growth of the Company by attracting, motivating and retaining employees with the ability to contribute to the success of the business and to align compensation for the Company’s employees over a multi-year period directly with the interests of the shareholders of the Company. The Company’s long-term equity incentive compensation program has historically included time-vesting non-qualified stock option and/or restricted stock unit (“RSUs”) (including performance-based stock unit with both time- and performance-vesting criteria (“PSUs”)) awards. From time to time, the Company has granted fully-vested shares of its common stock to individuals in connection with special circumstances. The Company’s Board of Directors or a committee thereof administers the 2014 Plan.

Under the 2014 Plan, grants may take the following forms at the Company’s Board of Directors’ Compensation and Benefits Committee’s (the “Compensation Committee”) discretion: non-qualified stock options, incentive stock options, stock appreciation rights, RSUs, restricted stock and other stock-based awards. As of December 30, 2023, the maximum number of shares of common stock available for grant under the 2014 Plan was 12,500, subject to increase and adjustment as set forth in the 2014 Plan.

Under the 2014 Plan, the Company also grants fully-vested shares of its common stock to certain members of its Board of Directors. While these shares are fully vested, the directors are restricted from selling these shares while they are still serving on the Company’s Board of Directors subject to limited exceptions. During the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, the Company granted to members of the Company’s Board of Directors an aggregate of 70, 77 and 29 fully-vested shares, respectively, and recognized compensation expense of $404, $624 and $757, respectively. Commencing during the fiscal year ended December 31, 2022, the above-referenced members of the Company’s Board of Directors could elect to defer receipt of such grants of fully vested shares of the Company’s common stock with respect to their service on the Company’s Board of Directors. Certain members of the Company’s Board of Directors made such an election such that for the fiscal years ended December 30, 2023 and December 31, 2022, the Company granted to those members of its Board of Directors an aggregate of 54 and 27 deferred stock units, respectively, and recognized compensation expense of $373 and $174, respectively. These deferred stock units will be settled on the date of separation from service from the Company's Board of Directors of the applicable member of the Company’s Board of Directors or earlier based on his or her election or upon a change in control of the Company. During the fiscal year ended December 30, 2023, an aggregate of 23 deferred stock units were settled.

In fiscal 2022, as part of an initial equity award, the Company granted stock options to purchase 1,000 shares in the aggregate of its common stock (collectively, the “Inducement Option”) to its new Chief Executive Officer upon commencement of her employment. The Inducement Option vests proportionately over four years on each anniversary of the grant date and expires on the seven-year anniversary of the grant date. While the Inducement Option was granted in reliance on an employment inducement exemption and not awarded pursuant to the 2014 Plan, it is subject to the same terms and conditions of the 2014 Plan.

The Company issues common stock for share-based compensation awards from treasury stock. The total compensation cost that has been charged against income for share-based compensation awards was $10,715, $12,333 and $21,348 for the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively. The total income tax benefit recognized in the Company’s consolidated statements of operations for all share-based compensation awards was $1,850, $2,603 and $5,175 for the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively. The tax benefits realized from options exercised and RSUs and PSUs vested totaled $1,287, $1,017 and $7,999 for the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively. No compensation costs were capitalized. As of December 30, 2023, there was $22,177 of total unrecognized compensation cost related to stock options and RSUs granted under the Stock Plans and the Inducement Option. That cost is expected to be recognized over a weighted average period of approximately 1.6 years. Additionally, the Company charged $3,882 of compensation costs against income for share-based compensation expense attributable to post combination vesting in relation to the Sequence acquisition. See Note 6 for additional information on the Company’s acquisitions. Such amounts have been included as a component of selling, general and administrative expenses.

Stock options with time-vesting criteria (“Time-Vesting Options”) are exercisable based on the terms and conditions outlined in the applicable award agreement. Time-Vesting Options outstanding at December 30, 2023, December 31, 2022 and January 1, 2022 vest over a period of three to four years and the expiration term is seven to ten years. Time-Vesting Options outstanding at December 30, 2023, December 31, 2022 and January 1, 2022 have an exercise price between $5.25 and $60.00 per share.

The fair value of each of these option awards is estimated on the date of grant using the Black-Scholes option pricing model with the weighted average assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company’s common stock. The expected term takes into consideration option exercise history. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant which most closely corresponds to the expected term of the Time-Vesting Options. The dividend yield is based on the Company’s historic average dividend yield. The Company did not grant any Time-Vesting Options for the fiscal year ended December 30, 2023.


	December 31,	January 1,
	2022	2022
Dividend yield	0.0%	0.0%
Volatility	57.0% - 57.1%	56.7%
Risk-free interest rate	2.36% - 2.86%	1.13%
Expected term (years)	6.0 - 7.0	6.5

A summary of all option activity for the fiscal year ended December 30, 2023 is presented below.


						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Life (Yrs.)		Value
Outstanding at December 31, 2022		7,404		$	33.23
Granted		—		$	—
Exercised		(98	)	$	6.69
Cancelled		(355	)	$	14.35
Outstanding at December 30, 2023		6,951		$	34.57		2.7	$	1,255
Exercisable at December 30, 2023		5,635		$	36.24		2.0	$	1,075

The weighted average grant date fair value of all options granted was $3.96 and $15.64 for the fiscal years ended December 31, 2022 and January 1, 2022, respectively. The total intrinsic value of all options exercised was $248, $0 and $18,497 for the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively.

Cash received from Time-Vesting Options exercised during the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022 was $718, $0 and $4,469, respectively.

RSUs are exercisable based on the terms outlined in the applicable award agreement. The RSUs generally vest over a period of two to four years. The fair value of RSUs is determined using the closing market price of the Company’s common stock on the date of grant. A summary of RSU activity under the Stock Plans for the fiscal year ended December 30, 2023 is presented below.


				Weighted Average
				Grant Date Fair
	Shares			Value
Outstanding at December 31, 2022		2,411		$	9.09
Granted		2,010		$	7.43
Vested		(743	)	$	10.68
Forfeited		(1,021	)	$	8.15
Outstanding at December 30, 2023		2,657		$	7.75

The weighted average grant date fair value of RSUs granted was $7.43, $6.69 and $24.29 for the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively. The total fair value of RSUs vested during the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022 was $7,943, $14,576 and $18,097, respectively.

In fiscal 2023, the Company granted 239 PSUs having both time- and performance-vesting criteria. The time-vesting criteria for these PSUs will be satisfied upon continued employment (with limited exceptions) on the third anniversary of the grant date. The performance-vesting criteria for these PSUs will be based on a relative total shareholder return performance goal, measuring the Company’s stock price performance against the performance of the Russell 2000 Index from the start of fiscal 2023 through the end of fiscal 2025.

The Company estimated the fair value of the PSUs granted in fiscal 2023 to be $13.80. The Company estimated this fair value using a Monte Carlo simulation that used various assumptions that included expected volatility of 86.2%, a risk-free rate of 3.79%, an expected term of 3.0 years and a dividend yield of 0.00%. Expected volatility was based on the historical volatility of the Company’s stock. The risk-free interest rate was based on the U.S. Treasury yield curve in effect on the date of grant which most closely corresponds to the performance measurement period. The expected term represents the three-year performance measurement period. Compensation expense is recognized ratably over the three-year required service period.

In fiscal 2019, the Company granted 280 PSUs having both time- and performance-vesting criteria. The time-vesting criteria for these PSUs was satisfied upon continued employment (with limited exceptions) on the third anniversary of the grant date. The performance-vesting criteria for these PSUs was not satisfied and 0 PSUs became vested in fiscal 2022 upon the satisfaction of the time-vesting criteria. The Company accrued compensation expense in an amount equal to the outcome upon vesting.

In fiscal 2018, the Company granted 81 PSUs having both time- and performance-vesting criteria. The time-vesting criteria for these PSUs was satisfied upon continued employment (with limited exceptions) on May 15, 2021. The performance-vesting criteria for these PSUs was not satisfied and 0 PSUs became vested in fiscal 2021 upon the satisfaction of the time-vesting criteria. The Company accrued compensation expense in an amount equal to the outcome upon vesting.

A summary of PSU activity for the fiscal year ended December 30, 2023 is presented below.


				Weighted Average
				Grant Date Fair
	Shares			Value
Outstanding at December 31, 2022		—		$	—
Granted		239		$	13.80
Vested		—		$	—
Forfeited		(24	)	$	13.80
Outstanding at December 30, 2023		215		$	13.80

The weighted average grant date fair value of PSUs granted was $13.80 during the fiscal year ended December 30, 2023. There were no PSUs vested during the fiscal year ended December 30, 2023. There were no PSUs granted or vested during the fiscal years ended December 31, 2022 and January 1, 2022.