On March 28, 2019, the Company adopted the 2019 Management Incentive Plan (the “2019 Plan”) which allows for the issuance of stock options to directors, officers, key employees and other key individuals. Stock options awarded under the 2019 Plan contain both service and performance conditions. Awards issued under the 2019 Plan have a 10-year contractual term. In connection with the adoption of the Omnibus Incentive Compensation Plan (as defined below), the Company ceased issuing awards under the 2019 Plan. As a result, no shares remain available for issuance under the 2019 Plan; however, the 2019 Plan continues to govern awards that are outstanding under it. As of December 28, 2024, 12.7 million shares remain outstanding under the 2019 Plan.

In connection with the IPO, the Company’s Board of Directors approved the Omnibus Incentive Compensation Plan (the “Omnibus Incentive Plan”), which became effective on June 28, 2023, the date the SEC declared our IPO registration statement on Form S-1 effective.

The Omnibus Incentive Plan allows for issuance of up to 15.0 million new shares of common stock. In addition, should any awards under the 2019 Plan expire, terminate or be canceled, the shares of common stock underlying those awards will become available for issuance under the Omnibus Incentive Plan. Awards under the Omnibus Incentive Plan may be in the form of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, other stock-based awards and cash awards. Awards issued under the Omnibus Incentive Plan have a maximum contractual term of 10 years. As of December 28, 2024, there were 14.6 million shares available for future issuance under the Omnibus Incentive Plan.

The Company classifies stock-based compensation expense in salaries, wages and benefits in the Consolidated Statements of Operations and Comprehensive Income. The Company recognized stock-based compensation expense of $61.6 million, $72.6 million and $1.9 million during fiscal years 2024, 2023 and 2022, respectively. The total tax benefit associated with stock-based compensation for fiscal years 2024, 2023 and 2022 was $6.0 million, $7.2 million and $0.4 million, respectively.

Stock option awards containing only a service condition (“time-based options”) generally vest in equal annual installments over a one-year, three-year or five-year period from the date of grant provided the participant continues to be employed by, or provide service to, the Company through each vesting date. Stock-based compensation cost for time-based options is measured at the grant date based on the fair value of the award using the Black-Scholes-Merton option pricing model and is recognized on a straight-line basis over the requisite service period of the award. The Company accounts for forfeitures of time-based options as they occur.

Fiscal Year

2024

2023

2022

Expected volatility

35.9% to 43.0%

35.4% to 35.7%

32.7% to 39.8%

Risk-free interest rate

3.9% to 4.3%

3.4% to 4.2%

1.8% to 3.6%

Expected term (in years)

6.0 to 6.5

6.5

The dividend yield assumption is zero. Although the Company paid a cash dividend in February 2023 and December 2022, the Company has no history of making regular dividends, nor does it anticipate paying any cash dividends in the foreseeable future.

Expected volatility is based on historic share price volatilities of comparable publicly traded companies consistent with the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of each grant, which corresponds to the expected term of the stock options. Based upon limited exercise history, the Company has elected to use the simplified method for estimating the expected term. The expected term of options granted represents the period of time that options are expected to be outstanding.


(in thousands, except per share amounts and remaining term)	Number of Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding at December 30, 2023	7,530	$	5.99	6.93	$	85,774
Granted	527	19.08
Exercised	(1,420)	2.23
Forfeited or expired	(691)	14.52
Outstanding at December 28, 2024	5,946	7.06		6.30	29,842
Exercisable at December 28, 2024	3,900	3.77		5.47	27,419

The total intrinsic value of time-based options exercised during fiscal years 2024, 2023 and 2022 was $21.8 million, $2.6 million and $0.9 million, respectively. As of December 28, 2024, unrecognized compensation expense related to outstanding time-based options was $9.8 million, which is expected to be recognized over a weighted average remaining vesting period of 2.93 years.

Stock option awards containing a performance condition (“performance-based options”) vest in 25% increments as performance conditions are achieved through the term of the options. Twenty-five percent of outstanding performance-based options vested upon completion of the Company’s IPO, with the remainder scheduled to vest in equal increments over three years starting on June 30, 2024 provided market-specific conditions, including stock price performance, are achieved. The vesting of performance-based options is subject to continued employment through the vesting date. To the extent that the requisite service is rendered, compensation cost for accounting purposes is not reversed; rather, it is recognized regardless of whether the market-specific conditions are achieved. The Company accounts for forfeitures of performance-based options as they occur.

In October 2022, May 2023 and on July 2, 2023, the Company modified the vesting terms of its performance-based options to reflect the vesting terms above. The Company determined that the modified vesting terms constituted modifications under Topic 718 and thus remeasured the fair value of the outstanding performance-based options as of their respective modification dates. Forty-one grantees were affected by the modifications that occurred in October 2022, May 2023 and on July 2, 2023. A Black-Scholes-Merton option pricing model was used to determine the grant-date fair value of the performance-based options that were tied to the Company’s IPO and a Monte Carlo simulation under the option pricing framework was used to determine the grant-date fair value of the performance-based options subject to market-specific conditions.

During fiscal years 2024 and 2023, we recognized $51.3 million and $38.8 million, respectively, of expense related to amortization of the remaining outstanding performance-based options that are recognized on a graded vesting basis over their expected vesting period. During fiscal year 2023, we also recognized $28.0 million of expense related to performance-based options that vested upon completion of our IPO.

The following assumptions were used to remeasure the fair value of performance-based options resulting from the October 2022 and May 2023 modifications under the Black-Scholes-Merton option pricing model:


(in thousands, except per share amounts and remaining term)	Number of Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding at December 30, 2023	7,948	$	2.05	5.78	$	121,750

Exercised	(365)	1.66
Forfeited or expired	(338)	1.61
Outstanding at December 28, 2024	7,245	2.10		5.07	59,455
Exercisable at December 28, 2024	3,516	2.12		5.07	28,813

The total intrinsic value of performance-based options exercised during fiscal year 2024 was $4.1 million. No performance-based options were exercised during fiscal years 2023 and 2022. The Company did not award performance-based options during fiscal years 2024, 2023 or 2022. As of December 28, 2024, unrecognized compensation expense related to outstanding performance-based options was $29.0 million, which is expected to be recognized over a weighted average remaining vesting period of 1.5 years.

RSUs contain only a service condition and generally vest in equal annual installments over a one-year or three-year period from the date of grant, provided the participant continues to be employed by, or provide service to, the Company through each vesting date. The fair value of RSUs is determined using the closing price of the Company’s common stock on the date of the grant. All RSUs were granted after the Company’s common stock commenced trading on June 29, 2023.


(in thousands, except per share amounts)	Number of Units	Weighted Average Grant-Date Fair Value Per Share
Unvested at December 30, 2023	547	$	22.81
Granted	565	18.59
Vested	(186)	22.66
Forfeited	(87)	21.56
Unvested at December 28, 2024	839	20.13

As of December 28, 2024, unrecognized compensation expense related to outstanding RSUs was $12.4 million, which is expected to be recognized over a weighted average remaining vesting period of 2.2 years.