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STOCK - BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK - BASED COMPENSATION | STOCK-BASED COMPENSATION 2021 Equity Incentive Plan In connection with the Company’s IPO, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which allows for issuance of stock options (including incentive stock options and non-qualified stock options), restricted stock units (“RSUs”), including performance-based awards, and other types of awards. The maximum number of shares of common stock that may be issued under the 2021 Plan is 35,166,753, which is the sum of (i) 11,500,000 new shares, plus (ii) an additional number of shares consisting of (a) shares that were available for the issuance of awards under any prior equity incentive plans in place (which shall include the Prior Stock Plans (as defined below)) and the options to purchase certain shares of common stock, assumed by the Company, pursuant to the Spyce Food Co. 2016 Stock Option and Grant Plan, prior to the time the Company’s 2021 Plan became effective and (b) any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Prior Stock Plans that on or after the Company’s 2021 Plan became effective, terminate or expire prior to the exercise or settlement; are not issued because the award is settled in cash; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. Options granted during, or prior to, the thirteen and twenty-six weeks ended June 30, 2024 generally have vesting terms between twelve months and four years and have a contractual life of 10 years. The Company issues shares of Class A common stock upon the vesting and settlement of RSUs and upon the exercises of stock options under the 2021 Plan. The 2021 Plan is administered by the Company’s board of directors (the “Board”), or a duly authorized committee of the Board. 2009 Stock Plan and 2019 Equity Incentive Plan Prior to the Company’s IPO, the Company granted stock options, RSUs and performance-based restricted stock awards (“PSUs”) to its employees, as well as non-employees (including directors and others who provide substantial services to the Company) under the Company’s 2009 Stock Plan and 2019 Equity Incentive Plan (collectively, the “Prior Stock Plans”). Awards permitted to be granted under the Prior Stock Plans include incentive stock options to the Company’s employees and non-qualified stock options to the Company’s employees and non-employees, as well as stock appreciation rights, restricted stock awards, RSUs (including PSUs), and other forms of stock awards to the Company’s employees, directors and consultants and any of the Company’s affiliated employees and consultants. Options granted in the fiscal year ended December 26, 2021 and prior generally have vesting terms between one year and four years and have a contractual life of 10 years. No further stock awards will be granted under the Prior Stock Plans now that the 2021 Equity Incentive Plan is effective; however, awards outstanding under the Prior Stock Plans will continue to be governed by their existing terms. Spyce Acquisition In conjunction with the Spyce acquisition, the Company issued shares of Class S stock which converted to the Class A common stock upon the Company’s IPO. Shares of Class S stock that were issued to certain Spyce employees, and the corresponding shares of Class A common stock received by such employees in connection with the Company’s IPO, were subject to time-based service requirements and vested on September 7, 2023, as these requirements were met. As the value is fixed, the grant date fair value of these shares represents the fair value of the shares on the acquisition date. For the thirteen and twenty-six weeks ended June 25, 2023, the Company recognized stock-based compensation expense of $0.9 million and $1.7 million, respectively, related to the vested portion of such shares. 2021 Employee Stock Purchase Plan In conjunction with the IPO, the Board adopted, and the Company’s stockholders approved, the Company’s 2021 employee stock purchase plan (the “ESPP”). The Company’s ESPP authorizes the issuance of 3,000,000 shares of common stock under purchase rights granted to the Company’s employees or to the employees of any of its designated affiliates. The number of shares of the Company’s common stock reserved for issuance will automatically increase on January 1 of each year for a period of 10 years, which began on January 1, 2023, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 4,300,000 shares, except before the date of any such increase, the Board may determine that such increase will be less than the amount set forth in clauses (i) and (ii). On January 1, 2023 the ESPP authorized shares increased by 1,111,331 to 4,111,331 in accordance with the above. The Board delegated the authority to manage the ESPP to the Compensation Committee of the Board, which provided that there would be no increase in the share reserve for the ESPP for calendar year 2024. As of June 30, 2024, there had bee n no offering period or purchase period under the ESPP, and no such period will begin unless and until determined by the administrator. Stock Options The following table summarizes the Company’s stock option activity for the twenty-six weeks ended June 30, 2024 and June 25, 2023:
(dollar amounts in thousands except per share amounts) | Number of Shares |  | Weighted Average Exercise Price Per Share |  | Weighted-Average Remaining Contractual Term (In Years) |  | Aggregate Intrinsic Value
Balance—December 31, 2023 | 13,219,388 |  | $ | 7.77 |  |  | 5.97 |  | $ | 53,758 |
Options granted | 1,934,005 |  | 16.99 |  |  |  |  |
Options exercised | (1,028,184) |  | 5.26 |  |  |  |  |
Options forfeited | (244,969) |  | 14.41 |  |  |  |  |
Options expired | (40,343) |  | 18.41 |  |  |  |  |
Balance—June 30, 2024 | 13,839,897 |  | $ | 9.10 |  |  | 6.23 |  | $ | 291,551 |
Exercisable—June 30, 2024 | 10,092,047 |  | $ | 7.33 |  |  | 5.25 |  | $ | 230,247 |
Vested and expected to vest—June 30, 2024 | 13,839,897 |  | $ | 9.10 |  |  | 6.23 |  | $ | 291,551 |
(dollar amounts in thousands except per share amounts) | Number of Shares |  | Weighted Average Exercise Price Per Share |  | Weighted-Average Remaining Contractual Term (In Years) |  | Aggregate Intrinsic Value
Balance—December 25, 2022 | 13,813,922 |  | $ | 7.86 |  |  | 6.63 |  | $ | 34,454 |
Options granted | 1,206,794 |  | 7.95 |  |  |  |  |
Options exercised | (521,242) |  | 4.81 |  |  |  |  |
Options forfeited | (497,994) |  | 10.74 |  |  |  |  |
Options expired | (128,219) |  | 10.25 |  |  |  |  |
Balance—June 25, 2023 | 13,873,261 |  | $ | 7.86 |  |  | 6.61 |  | $ | 50,641 |
Exercisable—June 25, 2023 | 9,916,948 |  | $ | 6.48 |  |  | 5.75 |  | $ | 46,246 |
Vested and expected to vest—June 25, 2023 | 13,873,261 |  | $ | 7.86 |  |  | 6.61 |  | $ | 50,641 |
The weighted-average fair value of options granted during the twenty-six weeks ended June 30, 2024 and June 25, 2023 was $8.32 and $8.67, respectively. The fair value of each option granted has been estimated as of the date of the grant using the Black-Scholes option-pricing model. The Company has elected to account for forfeitures as they occur. As of June 30, 2024, there was $22.4 million in unrecognized compensation expense related to unvested stock-based compensation arrangements and is expected to be recognized over a weighted average period 2.14 years. Restricted Stock Units and Performance Stock Units Restricted stock units The following table summarizes the Company’s RSU activity for the twenty-six weeks ended June 30, 2024 and June 25, 2023:
(dollar amounts in thousands except per share amounts) | Number of Shares |  | Weighted-Average Grant Date Fair Value
Balance—December 31, 2023 | 951,517 |  |  | $ | 17.41 |
Granted | 471,370 |  |  | 19.28 |
Released | (264,697) |  |  | 21.11 |
Forfeited | (68,260) |  |  | 18.28 |
Balance—June 30, 2024 | 1,089,930 |  |  | 17.29 |
(dollar amounts in thousands except per share amounts) | Number of Shares |  | Weighted-Average Grant Date Fair Value
Balance—December 25, 2022 | 1,780,681 |  |  | $ | 23.40 |
Granted | 353,743 |  |  | 8.67 |
Released | (298,778) |  |  | 21.52 |
Forfeited | (384,217) |  |  | 22.15 |
Balance—June 25, 2023 | 1,451,429 |  |  | $ | 19.30 |
As of June 30, 2024, unrecognized compensation expense related to RS Us was $11.5 million and is expected to be recognized over a weighted average period of 1.84 years. The fair value of shares released as of the vesting date during the twenty-six weeks ended June 30, 2024 wa s $6.1 million. Performance stock units In October 2021, the Company granted 2,100,000 PSUs to each founder (the “founder PSUs”) for a total of 6,300,000 PSUs, under the 2019 Equity Incentive Plan. The founder PSUs vest upon the satisfaction of a service condition and the achievement of certain stock price goals. As of June 30, 2024 unrecognized compensation expense related to the founder PSU s was $18.0 million and is expected to be recognized over a weighted average period of 1.00 year. Subsequent to the Company’s IPO, the Company issued 321,428 PSUs to the Spyce founders (“Spyce PSUs”) based on three separate performance-based milestone targets. During the twenty-six weeks ended June 30, 2024, the Company modified the number of shares underlying these grants and the vesting terms to remove the performance-based component, resulting in the total number of shares decreasing to 85,395, all of which are scheduled to vest on March 15, 2025. The expense related to these RSUs is included within the RSU section above. There wer e no PSU grants during the twenty-six weeks ended June 30, 2024 and June 25, 2023. A summary of stock-based compensation expense recognized during the thirteen and twenty-six weeks ended June 30, 2024 and June 25, 2023 is as follows:
| Thirteen weeks ended |  | Twenty-six weeks ended
(dollar amounts in thousands) | June 30, 2024 |  | June 25, 2023 |  | June 30, 2024 |  | June 25, 2023
Stock-options | $ | 2,957 |  |  | $ | 2,104 |  |  | $ | 5,294 |  |  | $ | 4,576 |
Restricted stock units | 3,088 |  |  | 3,249 |  |  | 4,736 |  |  | 5,994 |
Performance stock units | 4,858 |  |  | 9,049 |  |  | 10,499 |  |  | 18,097 |
Total stock-based compensation | $ | 10,903 |  |  | $ | 14,402 |  |  | $ | 20,529 |  |  | $ | 28,667 |

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