On May 22, 2019, our shareholders approved, and we adopted the 2019 Equity and Incentive Compensation Plan (the “2019 Equity Plan”) whereby equity-based awards may be granted by the Board to eligible non-employee directors, selected officers and other employees, advisors and consultants of ours. A summary of certain key features and terms of the 2019 Equity Plan is set forth below. A more complete discussion about the 2019 Equity Plan is set forth in the Company’s proxy statement for its 2019 annual meeting of stockholders, which was filed with the SEC on April 23, 2019.

• sets forth the total number of shares of common stock available for grant thereunder, at 1,550,000,

• sets forth the types of awards eligible under the plan, including issuances of options, share appreciation rights, restricted shares, restricted share units, share bonuses, other share-based awards and cash awards, and

• sets forth the maximum number of shares that may be made subject to awards in any calendar year to any “covered employee” (within the meaning of Section 162(m) of the Internal Revenue Code).

• shares previously granted under predecessor plans, including the 2014 Equity Plan and the 2006 Equity Plan, may be available for issuance under the 2019 Equity Plan under certain circumstances described below.

There were 558,220 shares available for grant under the 2019 Equity Plan at January 1, 2022.

On March 28, 2014, we adopted the 2014 Omnibus Equity Incentive Plan (the “2014 Equity Plan”) whereby equity-based awards may be granted by the Board to eligible non-employee directors, selected officers and other employees, advisors and consultants of ours. On May 7, 2014, our stockholders approved the 2014 Equity Plan.

• sets forth the total number of shares of common stock available for grant thereunder, at 1,500,000,

• sets forth the maximum number of shares that may be made subject to awards in any calendar year to any “covered employee” (within the meaning of Section 162(m) of the Internal Revenue Code).

With the adoption of the 2019 Equity Plan effective on May 22, 2019, no further shares will be granted and, therefore, no shares are available under the 2014 Equity Plan. However, a previously issued grant under the 2014 Equity Plan that is cancelled or forfeited, expires, is settled for cash, or is unearned, is available to be issued under the 2019 Equity Plan.

On June 6, 2006, we adopted the 2006 Equity Incentive Plan (the “2006 Equity Plan”) whereby equity-based awards could be granted by the Board to eligible non-employee directors, selected officers and other employees, advisors and consultants of ours. On April 6, 2010, our stockholders approved the PGT Innovations, Inc. (formerly PGT, Inc.) Amended and Restated 2006 Equity Incentive Plan (the “Amended and Restated 2006 Equity Incentive Plan”). With the adoption of the 2014 Equity Plan effective on March 28, 2014, no further shares were granted under and, therefore, no shares were available under the Amended and Restated 2006 Equity Incentive Plan. However, a previously issued grant made under the Amended and Restated 2006 Equity Incentive Plan that is cancelled or forfeited, expires, is settled for cash, or is unearned, is available to be issued under the 2019 Equity Plan.

On February 15, 2021, we issued 289,210 shares of restricted stock to certain executive and non-executive employees of the Company, under the Company’s 2021 long-term incentive plan (“2021 LTIP”). The final number of half of the shares awarded under the 2021 LTIP, or 144,605 shares, is subject to adjustment based on the performance of the Company for the 2021 fiscal year and was not final as of January 1, 2022. Additionally, a portion of the 144,605 performance shares issued under the 2021 LTIP are subject to a total shareholder return ("TSR") component, which will not be finalized until the third anniversary of the February 15, 2021 grants date. Specifically, 37.5% of the one-half of the restricted stock awarded in the 2021 LTIP are performance restricted shares which will not be earned unless certain financial performance metrics are met by the Company for the 2021 fiscal year. The performance criteria, as defined in the share awards, provide for a graded awarding of shares based on the percentage by which the Company meets earnings before interest, taxes, depreciation and amortization ("EBITDA") as defined in our 2021 business plan. The percentages, ranging from less than 80% to greater than 120% of the target amount of that EBITDA metric, provide for the awarding of shares ranging from 0% to 200% of the target amount of shares with respect to 37.5% of half of the 289,210 shares, or 54,227 shares. The remaining 62.5% of the one-half of the restricted stock awarded in the 2021 LTIP, or 90,378 shares, are subject to the same EBITDA metric, but are also subject to a TSR component which stratifies the performance of the Company's common stock price compared to a defined peer group of companies over the three-year period subsequent to February 15, 2021, such that if the Company's TSR falls at the 75th percentile or higher compared to the peer group, grantees will receive an additional 25% of performance shares. If the Company's TSR falls at the 25th percentile or lower compared to the peer group, grantees will forfeit 25% of performance shares. If the Company's TSR falls within the 75th and 25th percentiles, there will be no additional adjustment and grantees will receive their performance shares as per the EBITDA metric previously discussed. The final award is also affected by forfeitures upon the termination of a grantee’s employment with the Company. The remaining 144,605 shares from the 2021 LTIP are not subject to adjustment based on any performance or other criteria, but rather, vest in three equal installments on each of the first, second and third anniversaries of the grant date, assuming the grantee is employed by the Company on those vesting dates. The grant date fair value of the 2021 LTIP was $23.00 per share for those shares not subject to adjustment based on any performance or other criteria except the passage of time, and the 37.5% of shares subject only to the EBITDA criteria of Company performance, which represents the closing price of the Company's common stock on the New York Stock Exchange on February 12, 2021, the trading day before the grant date per our policy. For the 62.5% of performance shares subject to both the EBITDA criteria of Company performance and the TSR component, the grant date fair value was $26.10 per share as determined by a third-party valuation specialist engaged by the Company, which used Monte Carlo simulation techniques to determine the fair value of such shares, which we consider to be a Level 3 input.

On May 20, 2021, we issued a total of 28,140 shares of restricted stock awards to seven non-employee board members of the Company, and 8,040 restricted stock units to two non-employee board members of the Company who elected to defer receipt of their stock awards, as the non-cash portion of their annual compensation for participation on the Company’s Board of Directors. The restrictions on these awards lapse one year after the grant date. The awards have a weighted average fair value on date of grant of $24.88 based on the New York Stock Exchange market price of the common stock on the close of business on the day the awards were granted.

On February 1, 2020, in connection with the NewSouth Acquisition, we issued 129,032 shares of restricted stock awards to the sellers of NewSouth, who became employees of the Company after the acquisition, representing 64,516 shares each of those two sellers. This restricted stock award cliff-vests on the third anniversary of the February 1, 2020 acquisition date of NewSouth and requires that the grantees be employees of the Company on the vesting date. This stock had a fair value on the date of grant of $15.50 per share, and the related stock-based compensation expense is being recognized on a straight-line basis over the three-year life of the grant. The two sellers also have the ability to earn shares of Company common stock for the opening of new stores in new markets in which NewSouth has not previously had a presence. These two sellers were granted a total of 351,612 shares of restricted stock to open eleven new stores over approximately three years from February 1, 2020 to December 31, 2022, which represents 32,258 shares per store for each of the first ten stores, and 29,032 shares for the eleventh store, with the primary goal of expanding our direct-to-consumer sales-model footprint in the southeastern United States. For stores opened in 2020, once the store achieves a trailing six-month ("TSM") EBITDA of $250,000 with TSM EBITDA margin of 8%, the two sellers will vest in the shares for that store. For stores opened in 2021, once the store achieves a TSM EBITDA of $125,000 with a TSM EBITDA margin of 6%, the two sellers will vest in the shares for that store. For stores opened in 2022, shares vest upon the opening of the store. In 2021, two stores that were opened in 2020 achieved the required TSM EBITDA and TSM EBITDA margin, which resulted in the sellers vesting in the shares relating to those stores. We recognize stock-based compensation expense on each store, based on our assessment of the probability of a store opening and achieving the metrics assigned to such store.

We record stock compensation expense over an equity award’s vesting period using the award’s fair value at the date of grant. We recorded compensation expense for stock-based awards of $7.8 million, $5.5 million and $3.9 million for the years ended January 1, 2022, January 2, 2021, and December 28, 2019, respectively.

Of the $7.8 million, $5.5 million and $3.9 million in stock-based compensation expense in the years ended January 1, 2022, January 2, 2021, and December 28, 2019, respectively, $6.4 million, $4.8 million and $3.2 million, respectively, are classified within selling, general and administrative expense in the accompanying consolidated statements of operations for those years, with the remainder classified within cost of sales.

A summary of the status of our stock options as of January 1, 2022, and changes during the year then ended, is presented below:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Life in Years
Outstanding at January 2, 2021		67,797		$	2.04
Exercised		(67,797	)	$	2.04

Outstanding at January 1, 2022		0			—		—

Exercisable at January 1, 2022		0			—		—

For the years ended January 1, 2022 and January 2, 2021, we received $138 thousand and $0.6 million in proceeds, from the exercise of 67,797 and 284,353 options for which we recognized $0.9 million and $0.8 million in excess tax benefits as discrete items of income tax expense in each of those year, respectively. The aggregate intrinsic value of stock options exercised during the years ended January 1, 2022 and January 2, 2021, was $1.6 million and $3.4 million, respectively.

A summary of the status of restricted share awards as of January 1, 2022, and changes during the year then ended, are presented below:


	Number of Shares			Weighted Average Fair Value
Outstanding at January 2, 2021		864,918		$	16.48
Granted		709,122		$	19.37
Vested		(312,982	)	$	16.03
Forfeited/Performance adjustment		(114,952	)	$	17.71

Outstanding at January 1, 2022		1,146,106		$	18.25

As of January 1, 2022, the remaining compensation cost related to non-vested share awards was $5.9 million which is expected to be recognized in earnings using an accelerated method resulting in higher levels of compensation costs occurring in earlier periods over a weighted average period of 1.6 years.