Equity-based Compensation

6 Months Ended

Jun. 25, 2022

Share-Based Payment Arrangement [Abstract]

The Company granted new awards during the three months ended June 25, 2022, including 14,670 restricted stock units (“RSUs”) and 29,390 performance stock units (“PSUs”). The Company granted new awards during the six months ended June 25, 2022, including 254,474 restricted stock units (“RSUs”) and 475,738 performance stock units (“PSUs”).

Awards are eligible to vest provided that the employee remains in continuous service on each vesting date. The RSUs vest ratably in three installments on each of the first three anniversaries of the grant date. The PSUs vest after a three-year performance period. The number of PSUs that vest is contingent on achieving certain performance goals, one being a market condition and the other being a performance condition. The number of PSU shares that vest may range from zero to 200% of the original grant, based upon the level of performance. The awards are considered probable of meeting vesting requirements, and therefore, the Company has started recognizing expense.

The fair value of the RSUs, performance based PSUs and market based PSUs granted during the three months ended June 25, 2022 were less than $1 million each. The fair value of the total RSUs, performance based PSUs and market based PSUs granted during the six months ended June 25, 2022 were $7 million, $8 million and $7 million, respectively. The Company based the fair value of the RSUs and performance based PSUs on the Company’s stock price on the grant date. The Company determined the fair value of the market based PSUs granted during the three months ended June 25, 2022 by using a Monte Carlo simulation, using the following assumptions: (i) an expected term of 3 years, (ii) an expected volatility of 43.90%, (iii) a correlation of the S&P Mid-cap Index peer group of 59.50%, and (iv) no expected dividend. The Company determined the fair value of the market based PSUs granted during the three months ended March 26, 2022 by using a Monte Carlo simulation, using the following assumptions: (i) an expected term of 3 years, (ii) an expected volatility of 40.90%, (iii) a correlation of the S&P Mid-cap Index peer group of 50.70%, and (iv) no expected dividend.

The Company recorded share-based compensation expense during the three and six months ended June 25, 2022 and June 26, 2021 within selling, general and administrative expenses on the consolidated statements of operations as follows:


	Three months ended				Six months ended
(in thousands)	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Share-based compensation expense	$	4,000	$	1,000	$	7,000	$	2,000