Former Parent Incentive Plan — In October 2017, the Former Parent Entity approved the Class B Unit Incentive Plan (the “2017 Plan”) pursuant to the Company’s partnership agreement (“Partnership Agreement”), which established the terms and provided for grants of certain incentive units to employees, officers, directors, consultants, and advisors of the Former Parent Entity containing service-based and/or market-based vesting criteria. Class B-1 Incentive Units (“B-1 Units”) issued under the 2017 Plan vest in installments over a five-year period, subject to the grantee’s continued employment or service. Class B-2 Incentive Units (“B-2 Units” and collectively with the B-1 Units, “Incentive Units”) issued under the 2017 Plan contain both service conditions consistent with the B-1 Units and market-based vesting conditions that require the achievement of a specified return hurdle to the controlling shareholders in order to vest. The fair value of equity-classified awards is determined on the date of grant and is not remeasured. All B-1 Units and B-2 Units are classified as equity awards. For B-2 Units, the determination of the fair value of these awards takes into consideration the likelihood of achievement of the market condition. Prior to the modification of the Incentive Units in connection with the Company’s IPO on July 27, 2021, the Company recognized $2,605 of compensation expense related to the Incentive Units within selling, general, and administrative expenses in the accompanying consolidated statements of operations during the year ended December 31, 2021. Prior to the IPO, the B-1 and B-2 Units granted and the total grant-date fair value of B-1 Units vested during the year-ended December 31, 2021 were not significant.

2021 Incentive Plan — On July 16, 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”) to provide a means through which to attract, retain, and motivate key personnel. Awards available for grant under the 2021 Plan include non-qualified and incentive stock options, restricted shares of our common stock, other equity-based awards tied to the value of our common stock, and cash-based awards.

The restricted stock awards issued in exchange for unvested B-1 Units were of commensurate value and did not result in any incremental fair value provided to the holders of such awards. The restricted shares of common stock that the holders received in exchange for their unvested B-1 Units are subject to the same vesting terms that applied to the B-1 Units prior to the Equity Award Conversion. The Company will recognize the remaining unrecognized compensation expense prospectively over the requisite service period under the straight-line method.

Prior to the exchange for newly issued restricted stock awards, B-2 Units vested based upon the satisfaction of an explicit service period and a market condition. The restricted stock awards issued to replace B-2 Units vest based upon achievement of one or more of: (i) a total return hurdle, (ii) an average return hurdle, and/or (iii) a volume weighted average price hurdle, which are substantially the same as the previous market-condition vesting criteria of the B-2 Units. Although the restricted stock awards that replace the B-2 Units do not contain an explicit service condition, the vesting is subject to continued employment and will be forfeited if these hurdles, which include both market and performance conditions, are not achieved on or prior to February 4, 2024, resulting in a derived service period. For the majority of B-2 Units, the requisite service period was extended as a result of the modification. The acceleration of compensation expense due to the modification of vesting terms was immaterial.

Awards issued in connection with the 2021 Plan — During the year ended December 31, 2021, the Company, under the 2021 Plan and in connection with the Equity Award Conversion, granted 4,243 options to holders of B-1 Units (“Time-based Options”) and 1,155 options to holders of B-2 Units (“Market-based Options” and collectively with the Time-based Options, “Leverage Replacement Options”). The Leverage Replacement Options have an exercise price equal to the initial public offering price per share of the Company’s common stock and a contractual term of ten years from the initial grant date of the related Incentive Unit. The Time-based Options are subject to the same time-based vesting and the Market-based Options are subject to the same market-condition vesting criteria outlined for the restricted stock awards issued for the Incentive Units. Additionally, recipients of the Leverage Replacement Options received both vested and unvested Leverage Replacement Options in the same proportion as their vested and unvested B-1 and B-2 Units held immediately prior to the IPO and upon the Equity Award Conversion. The Company immediately recognized compensation expense for vested Time-based Options on the grant date as the awards provide value to the holders that is incremental to the value of B-1 Units held prior to the IPO and related modification. There were no vested B-2 Units at the date of the IPO and therefore no immediate expense recognition. In addition to the Leverage Replacement Options, the Company issued additional Time-based Options which vest over three years during the year ended December 31, 2021.


	Restricted Stock Awards
	B-1 Incentive Units			B-2 Incentive Units
	Number of Units	Weighted- Average Grant-Date Fair Value		Number of Units	Weighted- Average Grant-Date Fair Value
Outstanding at December 30, 2022	223	$	18.00	792	$	18.00
Granted	—	—		—	—
Vested	106	18.00		—	—
Forfeited	14	18.00		130	18.00
Outstanding at December 29, 2023	103	$	18.00	662	$	18.00

No B-1 or B-2 Units were granted for the years ended December 29, 2023 and December 30, 2022. For the year ended December 31, 2021, the weighted average grant date fair value of B-1 and B-2 Units was $18.00 per share. The fair value of B-1 Units that vested during the years ended December 29, 2023, December 30, 2022, and December 31, 2021 was $1,901, $7,002, and $3,402, respectively. No B-2 Units vested during the years ended December 29, 2023, December 30, 2022, and December 31, 2021.

The Company utilized the Black-Scholes option pricing model to estimate the fair value of the Time-based Options. The Company used a Monte Carlo simulation to estimate the fair value and derived service period of the Market-based Options. Significant assumptions included in these models were the risk-free interest rate, the expected volatility, and the expected dividend yield. Volatility was estimated based on historical volatility of comparable companies. The average expected term for the Market-based Options was derived based on an average of the outcomes of various scenarios performed under the Monte Carlo simulation. The fair values of the stock options were derived using the following key assumptions:


	Time-based Options					Market-based Options
	Number of Units	Weighted- Average Grant-Date Fair Value		Aggregate Intrinsic Value(a)		Number of Units	Weighted- Average Grant-Date Fair Value		Aggregate Intrinsic Value(a)
Outstanding at December 30, 2022	4,233	$	6.47	$	—	1,125	$	5.66	$	—
Granted	—	—		—		—	—		—
Exercised	—	—		—		—	—		—
Forfeited	478	6.20		—		190	5.66		—
Outstanding at December 29, 2023	3,755	$	6.50	—		935	$	5.66	—
Options exercisable at December 29, 2023	3,201	$	6.36	$	—	—	$	—	$	—

No Time-based or Market-based Options were granted during the years ended December 29, 2023 and December 30, 2022. The weighted average grant date fair value of the Time-based and Market-based Options granted during the year ended December 31, 2021, was $6.47 and $5.66, respectively. The fair value of Time-based Options that vested during the years ended December 29, 2023, December 30, 2022 and December 31, 2021 was $902, $5,602 and $13,842, respectively. No Market-based Options vested during the years ended December 29, 2023, December 30, 2022 and December 31, 2021.

Restricted Stock Units — The Company awarded restricted stock units (“RSUs”) under the 2021 Plan to its employees and directors. These RSUs are subject to time-based vesting conditions based on the continued service of the RSU holder. RSUs granted typically have an initial annual cliff vest and then vest quarterly over the remaining service period, which is generally one to four years. The fair value of RSUs granted is based on the Company’s closing stock price on the date of grant.

The weighted average grant date fair value of the restricted stock units granted during the years ended December 29, 2023, December 30, 2022, and December 31, 2021, was $11.04, $16.99, and $18.22, respectively. The fair value of restricted stock units that vested was $11,147 and $4,012 for the years ended December 29, 2023 and December 30, 2022. No restricted stock units vested during the years ending December 31, 2021. As of December 29, 2023, there were 115 vested and unissued restricted stock units.

Performance Stock Units — During the years ended December 29, 2023 and December 30, 2022, the Company granted performance-based restricted stock units (“PSUs”) to certain employees under the 2021 Plan. The fair value of PSUs granted is based on the Company’s closing stock price on the date of grant. Each PSU grant vests in annual tranches over a three-year service period. Total units earned for grants may vary between 0% and 200% of the units granted based on the attainment company-specific targets during the performance period (generally the fiscal year of the date of the grant) and upon continued service. Adjustments to compensation expense are made each period based on changes in our estimate

The awards issued during the year ended December 29, 2023 contain three separate tranches, each for a separate one-year performance period and each with a performance target to be established concurrently with the annual budget process. Accordingly, each tranche is accounted for as a separate grant. The Company-specific targets include: (i) adjusted EBITDA, (ii) adjusted EBITDA margin, and (iii) the results of a survey of employees below the level of director, measuring their reported level of engagement with the Company. For the year-ended December 29, 2023, the Company determined that, based on actual performance with respect to the combined performance targets, the first tranche of awards were earned at 76.6%.

The awards issued during the year ended December 30, 2022, vest in annual tranches over a three-year service period, subject to a one-year performance target. Total units earned for grants are based on the attainment of net sales and Company-specific adjusted EBITDA targets during the performance period (the fiscal year of the date of the grant) and upon continued service. For the year-ended December 30, 2022, the Company determined that, based on actual performance with respect to Adjusted EBITDA and Net Sales combined, the awards were earned at 51.0%.

The weighted average grant date fair value of the PSUs granted during the years ended December 29, 2023 and December 30, 2022, was $11.31 and $19.01, respectively. No PSUs were granted during the year ended December 31, 2021. The fair value of PSUs vested was $2,073 for the year ended December 29, 2023. No PSUs vested during the years ending December 30, 2022 and December 31, 2021. As of December 29, 2023, there were 71 vested and unissued performance share units.


							December 29, 2023
	December 29, 2023		December 30, 2022		December 31, 2021		Unrecognized compensation expense		Weighted-Average Remaining Contractual Term (Years)
2017 Plan
Incentive units	$	—	$	—	$	2,605	$	—	—
2021 Plan
Restricted stock awards	2,113		4,187		1,975		1,804		0.22
Time-based options	3,635		6,375		14,152		3,314		1.14
Market-based options	1,481		2,487		1,113		212		0.10
Restricted stock units	11,220		7,316		1,677		26,384		2.77
Performance stock units	3,891		2,108		—		927		0.32
Other equity-based compensation	401		380		—		427		1.06
Total	$	22,741	$	22,853	$	21,522	$	33,068	1.39

Employee Stock Purchase Plan — The Company’s Board of Directors (the “Board”) adopted, and its shareholders approved, the Snap One Holdings Corp. 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP initially reserves 750 shares for issuance. The number of shares available for issuance under the ESPP is subject to adjustment for certain changes in our capitalization. Under the ESPP, shares of common stock may be purchased by eligible participants during defined purchase periods at 85% of the lesser of the closing price of the Company’s common stock on the first day or last day of each purchase period. The Company used a Black-Scholes option pricing model to value the common stock purchased as part of the Company’s ESPP. The fair value estimated by the option pricing model is affected by the price of the common stock as well as subjective variables that include assumed interest rates, our expected dividend yield, and our expected share volatility over the term of the award.

Offering periods are generally six months long and begin on May 23 and November 23 of each year. For the year ended December 29, 2023, 322 shares of common stock were purchased under ESPP at an average price of $6.49 per share. For the year ended December 30, 2022, 158 shares of common stock were purchased under ESPP at an average price of $6.79 per share. Stock based compensation expense recognized related to the ESPP was $751 for the year ended December 29, 2023 and $438 for the year ended December 30, 2022. As of December 29, 2023 and December 30, 2022, eligible participants contributed $256 and $287, which is included in accrued liabilities in the accompanying consolidated balance sheet. As of December 29, 2023, unrecognized compensation cost was $315.

Control4 Equity Awards — In connection with the acquisition of Control4 Corporation (“Control4”) in 2019, the Company agreed to a settlement of Control4 equity awards that were outstanding immediately prior to the acquisition date, consisting of stock options and restricted stock units (collectively “C4 Equity Awards”). As of the acquisition date, 2,998 shares of C4 Equity Awards were cancelled and converted into rights to receive cash payments (“Replacement Awards”). As of December 30, 2022, all Replacement Awards have vested, and the related expense has been recognized. The Company recognized $294 and $4,265 of compensation expense relating to the Replacement Awards within selling, general, and administrative expenses in the accompanying consolidated statements of operations during the years ended December 30, 2022 and December 31, 2021, respectively.