Employee Benefit and Stock Incentive Plans

3 Months Ended

Mar. 29, 2026

Share-Based Payment Arrangement [Abstract]

Employee Benefit and Stock Incentive Plans

The Company sponsors a defined contribution benefit plan for substantially all of its employees. Company contributions to the plan are based on a percentage of employee wages. The Company’s contributions to the plan were $5.3 million for the three months ended March 29, 2026, and $5.1 million for the three months ended March 30, 2025.

The Company’s Omnibus Equity Incentive Plan (the “2016 Plan”), which became effective on April 28, 2016, provided for the grant of awards in the form of stock options that may be either incentive stock options or non-qualified stock options; stock purchase rights; restricted stock; restricted stock units (“RSUs”); performance shares; performance stock units (“PSUs”); stock appreciation rights; dividend equivalents; deferred stock units (“DSUs”); or other stock-based awards.

At the 2020 Annual Meeting of Stockholders of the Company on May 13, 2020, the Company’s stockholders approved the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which replaced the 2016 Plan. The 2020 Plan reserved 2,155,280 shares of the Company’s common stock for issuance under the 2020 Plan, consisting of 1,600,000 new shares plus 555,280 shares that were previously authorized for issuance under the 2016 Plan and that, as of May 13, 2020, were not subject to outstanding awards. No further grants of awards have been made under the 2016 Plan; however, outstanding awards granted under the 2016 Plan remained outstanding and continued to be administered in accordance with the terms of the 2016 Plan and the applicable award agreements. Any shares covered by an award, or any portion thereof, granted under the 2020 Plan or 2016 Plan that is forfeited or repurchased, or terminates, expires, or lapses for any reason will again be available for the grant of awards. Additionally, any shares tendered or withheld to satisfy the grant or exercise price, or tax withholding obligations pursuant to any award under the 2020 Plan or 2016 Plan, will again be available for issuance. As of March 29, 2026, the aggregate number of shares that remain available to be issued under the 2020 Plan is 2,882,823.

Stock options and RSUs granted to employees vest over a four-year period at 25% per year. Stock options expire 10 years after the date of grant. PSUs granted to employees vest upon the achievement of the performance conditions, over a three-year period, measured by the growth of the Company’s pre-tax income plus amortization relative to a performance peer group, subject to adjustment based upon the application of a return on invested capital modifier. Effective for the PSUs granted in the 2025 Fiscal Year and thereafter, the return on invested capital component was changed from a modifier to an independently weighted metric in the payout calculation.

Share-based compensation expense is recognized in the financial statements based upon the fair value on the date of grant. RSUs, PSUs, and DSUs have grant date fair values equal to the fair market value of the underlying stock on the date of grant. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. Since the start of the 2023 Fiscal Year, expected volatility has been based on the historical volatility of the Company’s common stock. Prior to the 2023 Fiscal Year, expected volatilities were based on the historical equity volatility of comparable publicly traded companies. This change in estimate was due to the length of time the Company’s common stock had been publicly traded, which exceeded the expected term of the stock options at the start of the 2023 Fiscal Year. The expected term of stock options is derived from the output of the option valuation model and represents the period of time that stock options granted are expected to be outstanding. The risk-free rates utilized for periods throughout the contractual life of the stock options are based on the U.S. Treasury security yields at the time of grant. Compensation costs for stock options and RSUs are recognized on a straight-line basis over the requisite vesting periods. The Company recognizes compensation expenses for PSUs when it is probable that the performance conditions will be achieved. The Company reassesses the probability of vesting at each reporting period and adjusts its compensation cost accordingly.

RSUs granted to non-employee directors vest at the earlier of the day preceding the next annual meeting of stockholders of the Company at which directors are elected or the first anniversary of the grant date, in each case, subject to the participant’s continued service as a director or other service provider (as applicable) from the grant date through such vesting date. Vested RSUs granted to non-employee directors settle into the Company’s common stock at the earlier to occur of the vesting date, termination of the director’s service on the Company’s Board of Directors, or until a change of control of the Company. Settlement may also be deferred at the director’s election until a specified date after the vesting date. DSUs granted to non-employee directors vest immediately but settlement is deferred until termination of the director’s service on the Company’s Board of Directors or until a change of control of the Company.

In February 2023, the Company’s Human Resources and Compensation Committee approved amendments to the applicable equity award agreements governing the terms of the stock options, RSUs, and PSUs granted under the 2020 Plan. Pursuant to such amendments, all unvested stock options and RSUs granted to an associate after the effective date of the amendments under an applicable award agreement, as amended, will fully vest following the end of their employment, generally in four equal annual installments and expire in 10 years for stock options, if such associate’s combined age (minimum of 55 years of age) and completed years of employment with the Company (minimum of five years of service) equals 65 or more (the “Rule of 65”). The amendments did not alter any equity award agreements outstanding on or prior to the effective date or the pro-rated vesting schedule with respect to PSUs, other than to change the definition of retirement to reflect the Rule of 65.

A summary of stock-based compensation activities during the three months ended March 29, 2026 was as follows (in thousands):


	Stock Options	RSUs	DSUs	PSUs
Outstanding as of December 28, 2025	468.7	334.7	62.6	124.5
Granted	—	160.6	—	54.7
Exercised/Vested/Settled(a)	(15.5)	(96.6)	—	—
Expired or forfeited	(0.1)	(6.5)	—	(0.5)
Outstanding as of March 29, 2026	453.1	392.2	62.6	178.7

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(a) Does not include 35.9 thousand stock options and 124.9 thousand RSUs granted to retirement eligible associates under the Rule of 65. While these shares immediately vested, they have not been settled.

There were no stock options or DSUs granted during the periods presented. The weighted average grant date fair value of awards granted were as follows:


	March 29, 2026		March 30, 2025

RSUs	$	148.40	$	135.61

PSUs	$	149.55	$	135.83

A summary of stock-based compensation expenses recognized during the periods was as follows (in millions):


	Three Months Ended
		March 29, 2026		March 30, 2025
Stock options(a)		$	0.2	$	0.7
RSUs(a)		12.2		11.3
DSUs		0.1		0.1
PSUs		1.7		1.5
Total stock-based compensation		$	14.2	$	13.6

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(a) Stock-based compensation expense for the three months ended March 29, 2026 and March 30, 2025 included accelerated expense related to retirement eligible associates under the Rule of 65. These amounts on a net expense basis included $7.3 million related to RSUs for the three months ended March 29, 2026, and $0.1 million related to stock options and $6.9 million related to RSUs for the three months ended March 30, 2025.

A summary of unrecognized stock-based compensation expense was as follows:


	March 29, 2026			December 28, 2025
	Unrecognized Compensation (in millions)		Weighted Average Remaining Period	Unrecognized Compensation (in millions)		Weighted Average Remaining Period
Stock options	$	0.3	0.8 years	$	0.5	0.9 years
RSUs	$	34.6	3.0 years	$	24.0	2.5 years
DSUs	$	0.1	0.8 years	$	0.2	0.9 years
PSUs	$	13.7	2.2 years	$	7.3	1.7 years