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Equity-Based Compensation | 12 Months Ended
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Apr. 02, 2022
Share-based Payment Arrangement [Abstract] |
Equity-Based Compensation | 12. Equity-Based Compensation The Company has equity incentive plans under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. Equity-based compensation expense of $9.8 million, $6.0 million, and $8.3 million was recognized in fiscal 2022, 2021, and 2020, respectively. Equity-based compensation expense is included in SG&A expenses in the accompanying consolidated statements of operations. The total associated income tax benefit recognized was $2.8 million, $1.0 million, and $1.3 million in fiscal 2022, 2021, and 2020 respectively. Total unrecognized equity-based compensation for all share-based payment plan s was $16.8 million at April 2, 2022, of which $8.7 million is expected to be recognized in fiscal 2023, $5.2 million in fiscal 2024 and $2.9 million thereafter, or a weighted-average period of 1.65 ye ars. Time-Vesting and Performance-Vesting Restricted Share Awards The Company granted awards to its officers, management employees, and certain members of the Board of Managers under an equity-classified management incentive plan (the “MIP”). In accordance with the provisions of the MIP, as modified on June 1, 2018, unvested units granted under the MIP were exchanged for unregistered, time-vesting restricted shares and performance-vesting restricted shares of the Company subject to stock restriction agreements (the “SRAs”). The exchange was accounted for as a modification. The fair value of the awards that vested during fiscal both 2021 and 2020 was $4.2 million. A summary of the activity associated with these awards is as follows:
(amounts in thousands) |  | Time Based Restricted Share Awards |
Outstanding at March 30, 2019 |  |  | 290 |
Vested |  |  | (145 | )
Outstanding at March 28, 2020 |  |  | 145 |
Vested |  |  | (145 | )
Outstanding at April 3, 2021 |  |  | — |
Vested |  |  | — |
Outstanding at April 2, 2022 |  |  | — |
On September 26, 2018, the Company’s shareholders approved the Company’s 2018 Equity Incentive Plan (the “Equity Plan”) which provides for grants of options, stock appreciation rights, restricted and unrestricted stock and stock units, performance awards, and other awards convertible into or otherwise based on shares of the Company’s common stock. General terms and methods of valuation for the Company’s share-based awards granted under the Equity Plan are described below. Stock Options Stock options generally have terms of 10 years, with one-third of each grant vesting each year for three years, and are assigned an exercise price that is equal to or greater than the closing market price of a share of the Company’s common stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. When determining expected volatility, the Company considered volatility of guideline public companies. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term. The expected term of the options is based on the time period to exercise for each vesting tranche, which is calculated based on the average of: (i) the full option contractual term; and (ii) the starting vest date. A summary of the activity associated with these awards is as follows:
|  | Shares (in thousands) |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Term (in years) |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at March 30, 2019 |  |  | 146 |  |  | $ | 15.00 |  |  |  |  |  |  |
Granted |  |  | 266 |  |  | $ | 32.11 |  |  |  |  |  |  |
Exercised |  |  | (8 | ) |  | $ | 15.00 |  |  |  |  |  |  |
Forfeitures |  |  | (1 | ) |  | $ | 15.00 |  |  |  |  |  |  |
Outstanding at March 28, 2020 |  |  | 403 |  |  | $ | 26.29 |  |  |  |  |  |  |
Granted |  |  | 138 |  |  | $ | 31.21 |  |  |  |  |  |  |
Exercised |  |  | (5 | ) |  | $ | 15.00 |  |  |  |  |  |  |
Outstanding at April 3, 2021 |  |  | 536 |  |  | $ | 27.51 |  |  |  |  |  |  |
Granted |  |  | 13 |  |  | $ | 53.06 |  |  |  |  |  |  |
Exercised |  |  | (61 | ) |  | $ | 25.04 |  |  |  |  |  |  |
Forfeitures |  |  | (1 | ) |  | $ | 31.68 |  |  |  |  |  |  |
Outstanding at April 2, 2022 |  |  | 487 |  |  | $ | 28.50 |  |  |  | 7.8 |  |  | $ | 13,169 |
Vested and expected to vest at April 2, 2022 |  |  | 487 |  |  | $ | 28.50 |  |  |  | 7.8 |  |  | $ | 13,169 |
Exercisable at April 2, 2022 |  |  | 297 |  |  | $ | 25.61 |  |  |  | 7.5 |  |  | $ | 8,900 |
The assumptions used in the Black-Scholes option-pricing model along with the weighted average grant date fair value for awards granted in the periods presented are as follows:
Option Award Assumptions |  | Fiscal 2022 |  |  | Fiscal 2021 |  |  | Fiscal 2020 |
Weighted-average assumptions used: |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 50.0 | % |  |  | 45.0 | % |  |  | 30.0 | %
Dividend yield |  |  | — |  |  |  | — |  |  |  | — |
Risk-free interest rate |  |  | 1.0 | % |  |  | 0.5 | % |  |  | 1.7 | %
Expected term, in years |  |  | 6.00 |  |  |  | 6.00 |  |  |  | 5.88 |
Weighted average grant date fair value per share |  | $ | 25.29 |  |  | $ | 12.48 |  |  | $ | 10.33 |
Performance Share Units In fiscal 2022, the Company issued performance share units that contain market vesting conditions, performance vesting conditions, and service conditions. The performance condition is based on the Company's market share of single family home completions ("SFC Market Share"). The SFC Market Share component of the awards are valued at the market price of a share of the Company's common stock on the date of grant. The market condition is based on the Company’s total shareholder return (“TSR”) compared to the median TSR of certain companies over a three year performance period. The Company used a Monte-Carlo simulation to determine the grant date fair value for the awards, which takes into consideration the possible outcomes pertaining to the TSR market condition. Per the terms of the awards, 0% to 200% of the Company’s performance share units vest on the third anniversary of the vesting commencement date based upon achievement of the performance and market conditions as specified in the performance share unit agreement. In fiscal 2021 and 2020, the Company issued performance share units that contain market vesting conditions and service conditions. The market condition is based on the Company’s TSR compared to the median TSR of certain companies over a three year performance period. The Company used a Monte-Carlo simulation to determine the grant date fair value for the awards. Per the terms of the awards, 0% to 150% of the Company’s performance share units vest on the third anniversary of the vesting commencement date based upon achievement of the market condition as specified in the performance share unit agreement. A summary of the activity associated with these awards is as follows:
|  | Shares (in thousands) |  |  | Weighted Average Grant Date Fair Value Per Unit |
Outstanding at March 30, 2019 |  |  | 146 |  |  | $ | 3.62 |
Granted |  |  | 86 |  |  | $ | 29.05 |
Forfeitures |  |  | (2 | ) |  | $ | 3.62 |
Outstanding at March 28, 2020 |  |  | 230 |  |  | $ | 13.85 |
Granted |  |  | 61 |  |  | $ | 28.38 |
Outstanding at April 3, 2021 |  |  | 291 |  |  | $ | 16.90 |
Granted |  |  | 96 |  |  | $ | 83.04 |
Vested |  |  | (84 | ) |  | $ | 6.38 |
Forfeitures |  |  | (61 | ) |  | $ | 6.57 |
Outstanding at April 2, 2022 |  |  | 242 |  |  | $ | 49.27 |
The assumptions used in the Monte-Carlo simulation for the performance condition of performance share units along with the weighted-average grant date fair value for awards granted in the periods presented are as follows:
Performance Unit Assumptions |  | Fiscal 2022 |  |  | Fiscal 2021 |  |  | Fiscal 2020 |
Weighted-average assumptions used: |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 54.8 | % |  |  | 50.0 | % |  |  | 30.0 | %
Dividend yield |  |  | — |  |  |  | — |  |  |  | — |
Risk-free interest rate |  |  | 1.1 | % |  |  | 2.0 | % |  |  | 1.6 | %
Expected term, in years |  |  | 2.98 |  |  |  | 3.00 |  |  |  | 2.84 |
Weighted average grant date fair value per share |  | $ | 83.04 |  |  | $ | 28.38 |  |  | $ | 29.05 |
Restricted Stock and Restricted Share Awards Restricted stock units and restricted share awards are valued at the market price of a share of the Company’s common stock on the date of grant. In general, these awards have graded vesting conditions in which a portion of awards vest ratably in three equal installments on the anniversary of the vesting commencement date. The total fair value of restricted stock which vested was approximately $8.0 million, $2.5 million, and $2.1 million during fiscal 2022, 2021, and 2020, respectively. The weighted average grant date fair value for restricted stock units granted in fiscal 2022, 2021, and 2020 wa s $67.90, $28.33, and $31.34, respectively.
(units and shares in thousands) |  | Restricted Stock Units |
Outstanding at March 30, 2019 |  | 158 |
Granted |  |  | 112 |
Vested |  |  | (75 | )
Forfeitures |  |  | (1 | )
Outstanding at March 30, 2019 |  |  | 194 |
Granted |  |  | 87 |
Forfeitures |  |  | (98 | )
Outstanding at April 3, 2021 |  |  | 183 |
Granted |  |  | 109 |
Vested |  |  | (126 | )
Forfeitures |  |  |  |  | (1 | )
Outstanding at April 2, 2022 |  |  | 165 |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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