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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We award stock-based compensation to employees and directors under the 2018 Equity and Incentive Compensation Plan (“2018 Plan”), which was adopted by our Board of Directors and became effective upon the completion of our initial public offering in October 2018. The 2018 Plan replaced the 2012 Equity and Performance Incentive Plan, as amended and restated on June 20, 2018 (the “2012 Plan”). Any remaining shares available for issuance under the 2012 Plan as the date of our initial public offering in October 2018 are not available for future issuance. However, shares subject to stock awards granted under the 2012 Plan (a) that expire or terminate without being exercised or (b) that are forfeited under an award, return to the 2018 Plan. Subject to adjustments as described above, the 2018 Plan provides for up to 4.8 million shares of authorized stock to be awarded as stock options, appreciation rights, restricted stock (“RSAs”), restricted stock units (“RSUs”), performance shares, performance units, cash incentive awards, and certain other awards based on or related to shares of our common stock. The 2012 Plan provided for up to 8.8 million shares of authorized stock to be awarded as either stock options or RSUs. Stock options, RSUs, and RSAs granted generally have a three-year vesting period and vest one-third on the first anniversary of the grant date, and an additional one-sixth vest on each of the first four six-month anniversaries of the initial vesting date. Stock options have a ten year term. Performance-based restricted stock awards (“PBRSs”) cliff vest based on the attainment of certain predetermined three-year cumulative performance goals over a three-year performance period subject to continued employment. Depending on the estimated probability of attainment of those performance goals, the compensation expense recognized related to the awards could increase or decrease over the remaining vesting period. Deferred stock units (“DSUs”) are issued to non-employee directors in lieu of RSUs or certain cash compensation at the election of the grantee. DSUs generally vest one year from the grant date. In October 2022, we granted approximately 9,200 RSUs that will vest on the two-month anniversary of hiring a permanent Chief Financial Officer. The effect of these awards has been excluded from our disclosures below due to their contingent vesting. In November 2022, we granted RSUs that have a three-year vesting period and vest one-sixth on the each six-month anniversary of the initial vesting date. We recognized non-cash stock-based compensation expense of $17.8 million, $15.5 million, and $9.0 million for 2022, 2021, and 2020, respectively. The related income tax benefits were $3.8 million, $12.9 million, and $2.9 million for 2022, 2021, and 2020, respectively. As of December 31, 2022, total unrecognized stock-based compensation expense of $37.3 million for all stock-based compensation plans is expected to be recognized over a weighted-average period of 2.2 years. Restricted Stock Units, Restricted Stock Awards, and Deferred Stock Units Stock-based activity, excluding options, for the year ended December 31, 2022 is summarized below (in thousands, except per share data):
| Performance-Based Restricted Stock Awards |  | Restricted Stock Units, Restricted Stock Awards, and Deferred Stock Units (1) |  |
| Number of PBRSs |  | Weighted Average Grant Date Fair Value |  |  |  |  |  | Number of RSUs, RSAs, and DSUs |  | Weighted Average Grant Date Fair Value |  |  |  |  |  |  |  |  |  |
Nonvested, January 1, 2022 | 210 |  |  | $ | 48.64 |  |  |  |  |  |  | 433 |  |  | $ | 55.54 |  |  |  |  |  |  |  |  |  |  |
Granted | 113 |  |  | 64.48 |  |  |  |  |  |  | 723 |  |  | 50.51 |  |  |  |  |  |  |  |  |  |  |
Vested/released | — |  |  | — |  |  |  |  |  |  | (222) |  |  | 52.14 |  |  |  |  |  |  |  |  |  |  |
Forfeited/expired | (90) |  |  | 55.60 |  |  |  |  |  |  | (122) |  |  | 60.25 |  |  |  |  |  |  |  |  |  |  |
Nonvested, December 31, 2022 | 233 |  |  | $ | 53.63 |  |  |  |  |  |  | 812 |  |  | $ | 51.28 |  |  |  |  |  |  |  |  |  |  |
_________________________________________ (1)Excludes approximately 9,200 RSUs granted in 2022 that have a contingent vesting requirement. As of December 31, 2022, the weighted average remaining contractual term of PBRSs was 1.9 years and the aggregate intrinsic value of PBRSs expected to vest was $9.7 million. The weighted average remaining contractual term of RSUs, RSAs, and DSUs was 2.3 years and the aggregate intrinsic value of RSUs, RSAs, and DSUs was $33.5 million as of December 31, 2022. The following table summarizes additional information about PBRSs, RSUs, RSAs, and DSUs (in thousands, except per share data):
| Fiscal Year Ended
| December 31, 2022 |  | January 1, 2022 |  | January 2, 2021
Weighted average grant date fair value per share of awards granted(1) | $ | 52.42 |  |  | $ | 79.06 |  |  | $ | 33.58 |
Total grant date fair value of awards vested(2) | $ | 11,602 |  |  | $ | 7,145 |  |  | $ | 3,215 |
Intrinsic value of awards vested(2) | $ | 12,434 |  |  | $ | 19,346 |  |  | $ | 5,271 |
_________________________________________ (1)Excludes approximately 9,200 RSUs granted in 2022 that have a contingent vesting requirement. (2)Excludes approximately 4,200, 14,000, and 10,500 DSUs that vested but were not released in 2022, 2021, and 2020, respectively. Stock Options Fair Value The exercise price of options granted under the 2012 Plan and 2018 Plan is equal to the estimated fair market value of our common stock at the date of grant. Before our IPO in October 2018, we estimated the fair value of our common stock based on the appraisals performed by an independent valuation specialist. Subsequent to our IPO, we began using the market closing price for our common stock as reported on the New York Stock Exchange. We estimate the fair value of stock options on the date of grant using a Black-Scholes option-pricing valuation model, which uses the expected option term, stock price volatility, and the risk-free interest rate. The expected option term assumption reflects the period for which we believe the option will remain outstanding. We elected to use the simplified method to determine the expected option term, which is the average of the option’s vesting and contractual term. Our computation of expected volatility is based on the historical volatility of selected comparable publicly-traded companies over a period equal to the expected term of the option. The risk-free interest rate reflects the U.S. Treasury yield curve for a similar instrument with the same expected term in effect at the time of the grant. No stock options were granted in 2022, 2021, or 2020. A summary of the stock options is as follows for the periods indicated (in thousands, except per share data):
| Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Balance, December 28, 2019 | 1,618 |  |  | $ | 16.44 |  |  | 8.12 |  |
Exercised | (247) |  |  | 12.23 |  |  |  |  |
Forfeited/cancelled | (117) |  |  | 21.56 |  |  |  |  |
Balance, January 2, 2021 | 1,254 |  |  | $ | 16.79 |  |  | 7.22 |  |
Exercised | (408) |  |  | 10.03 |  |  |  |  |
Balance, January 1, 2022 | 846 |  |  | $ | 20.05 |  |  | 6.93 |  |
Exercised | (191) |  |  | 20.04 |  |  |  |  |
Forfeited/cancelled | (13) |  |  | 18.00 |  |  |  |  |
Balance, December 31, 2022 | 642 |  |  | $ | 20.10 |  |  | 5.93 |  | $ | 13,597 |
Exercisable, December 31, 2022 | 642 |  |  | $ | 20.10 |  |  | 5.93 |  | $ | 13,597 |
The total intrinsic value of stock options exercised was $3.3 million, $33.1 million, and $6.7 million for 2022, 2021, and 2021, respectively. The income tax benefits related to stock options exercised were $0.8 million, $8.1 million, and $1.7 million for 2022, 2021, and 2020, respectively. The total grant date fair value of stock options vested was $1.7 million, $2.2 million, and $2.9 million for 2022, 2021, and 2020, respectively. The following is a summary of our non-vested stock options for the periods indicated (in thousands, except per share data):
| Shares Under Outstanding Options |  | Weighted Average Grant Date Fair Value
Non-vested options at January 1, 2022 | 237 |  |  | $ | 7.48 |
Granted | — |  |  | — |
Forfeited | (13) |  |  | 7.22 |
Vested | (224) |  |  | 7.47
Non-vested options at December 31, 2022 | — |  |  | $ | — |

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