STOCK-BASED COMPENSATION

9 Months Ended

Oct. 01, 2022

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

13. STOCK-BASED COMPENSATION

On April 12, 2021, the Company’s stockholders approved the 2021 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), which became effective on April 22, 2021, upon pricing of the IPO. The Omnibus Incentive Plan provides for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based and cash-based awards. The maximum aggregate number of shares reserved for issuance under the Omnibus Incentive Plan is 13,170,212 shares. The maximum grant date fair value of cash and equity awards that may be awarded to a non-employee director under the Omnibus Incentive Plan during any one fiscal year, together with any cash fees paid to such non-employee director during such fiscal year, is $750,000.

The following table summarizes the Company’s stock-based compensation expense:

	Fiscal Quarter Ended				Three Fiscal Quarters Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Cost of sales	$	730	$	1,914	$	3,046	$	6,837
Selling, general and administrative		6,331		25,689		37,369		97,741
	$	7,061	$	27,603	$	40,415	$	104,578

As of October 1, 2022, total unrecognized stock-based compensation expense related to all unvested stock-based awards was $32.7 million, which is expected to be recognized over a weighted-average period of 1.21 years.

The following table sets forth the significant assumptions used in the Black-Scholes option-pricing model on a weighted-average basis to determine the fair value of option awards granted:

	Three Fiscal Quarters Ended
	October 1, 2022
Risk-free interest rate	2.04	%
Expected volatility	39.67	%
Expected term (in years)	6.25
Expected dividend yield	0.00	%

Restricted Stock Awards

The following table represents the Company’s restricted stock awards activity during the three fiscal quarters ended October 1, 2022:

		Weighted-
		Average Grant-
	Shares	Date Fair Value
Outstanding at January 1, 2022	5,803,124	$	19.00
Granted	—		—
Vested	(1,373,260)		19.00
Forfeited	(480,385)		19.00
Outstanding at October 1, 2022	3,949,479	$	19.00

Restricted Stock Units

The following table represents the Company’s restricted stock units activity during the three fiscal quarters ended October 1, 2022:

		Weighted-
		Average Grant-
	Shares	Date Fair Value
Outstanding at January 1, 2022	278,591	$	19.08
Granted	210,012		10.81
Vested	(182,383)		19.00
Forfeited	(17,324)		19.00
Outstanding at October 1, 2022	288,896	$	13.12

Stock Options

The following table represents the Company’s stock option activity during the three fiscal quarters ended October 1, 2022:

			Weighted-	Weighted-
			Average	Average
		Exercise Price		Remaining	Aggregate
	Shares	per Share		Contract Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding on January 1, 2022	822,886	$	19.08
Granted	1,500,149		13.30
Exercised	—		—
Expired	(1,557)		19.00
Forfeited	(240,420)		17.38
Outstanding at October 1, 2022	2,081,058	$	15.11	9.15	$	—
Vested and expected to vest at October 1, 2022	2,081,058	$	15.11	9.15	$	—
Options exercisable at October 1, 2022	179,714		19.00	8.26		—

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The weighted average grant-date fair value of stock options granted during the three fiscal quarters ended October 1, 2022 was $5.56 per share.