Stock-Based Compensation (Notes)

3 Months Ended

Apr. 02, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based CompensationStock-based compensation expense for the three months ended April 2, 2023 and April 3, 2022 was $1.1 million and $1.9 million, respectively. The first quarter of 2022 included additional stock-based compensation expense of $0.7 million related to the accelerated vesting of certain awards upon the retirement of our former CEO.

As of April 2, 2023, the total unrecognized stock-based compensation expense relating to time-vested restricted shares and stock options was approximately $5.7 million and the Company expects to record an additional $2.6 million in stock-based compensation expense related to the vesting of these awards in the remainder of 2023. The remaining weighted average vesting period for stock options and non-vested shares was 2.2 years.

Time-based Non-vested Shares. During the three months ended April 2, 2023, the Company granted 1,001,915 non-vested shares of common stock to certain employees and officers of the Company and 384,807 non-vested shares of common stock to the outside directors of the Company. These shares generally vest in equal installments over their three-year service period, provided the participant has continuously remained an employee, officer or director of the Company.

A summary of all non-vested common share activity for the three months ended April 2, 2023 was as follows:


	Shares	Weighted Average Grant Date Price
Non-vested at January 1, 2023	1,767,811	$	3.79
Granted	1,386,722	$	2.04
Vested	(753,818)	$	4.28
Forfeited	(11,600)	$	2.48
Non-vested at April 2, 2023	2,389,115	$	2.62

The fair value of time-vested shares is based on the closing price on the date of grant.

Performance-based Restricted Shares. On April 1, 2022, 600,000 performance-based restricted shares were granted to the Company's former CEO of which 450,000 shares were subsequently forfeited on December 31, 2022. The remaining shares will fully vest on the third anniversary of the grant date based on the achievement of contractually defined EBITDA and share price growth targets. The fair value of the market-based restricted shares was determined using a Monte Carlo simulation valuation model and these shares will be expensed over their three year performance-based vesting period based on the probability of the Company's attainment of the contractually defined targets.

Stock Options. The Company has issued options to purchase shares of its common stock to certain employees and officers of the Company. These options become exercisable and are being expensed over their three-year vesting period. The options expire seven years from the date of the grant and were issued with an exercise price equal to the fair market value of the stock price on the date of grant, or $7.12 per share.

The following is a summary of all stock option activity for the three months ended April 2, 2023:


	Options	Weighted Average Exercise Price	Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1)
Options outstanding at January 1, 2023	975,500


Forfeited	—	$7.12
Options Outstanding at April 2, 2023	975,500	$7.12	4.4	$—
Vested or expected to vest at April 2, 2023	975,500	$7.12	4.4	$—
Options exercisable at April 2, 2023	868,250	$7.12	4.4	$—

(1)The aggregate intrinsic value is calculated using the difference between the market price of the Company's common stock at April 2, 2023 of $2.23 and the grant price for only those awards that have a grant price that is less than the market price of the Company's common stock at April 2, 2023. There were no awards having a grant price less than the market price of the Company's common stock at April 2, 2023.

Restricted Stock Units. The Company has issued restricted stock units ("RSUs") on shares of the Company's common shares to certain officers of the Company.

The following is a summary of all RSU activity for the three months ended April 2, 2023:


			Units
Non-vested at January 1, 2023			38,770

Vested			(19,381)

Non-vested at April 2, 2023			19,389