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Stock-Based Compensation | 12 Months Ended
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Jan. 01, 2022
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation [Text Block] | 17. Stock-Based Compensation For the years ended January 1, 2022, January 2, 2021 and December 28, 2019, stock-based compensation was recorded in the consolidated statements of operations as follows:
|  | January 1, 2022 |  |  | January 2, 2021 |  |  | December 28, 2019 |
|  | $ |  |  | $ |  |  | $ |
Selling, general and administrative expenses |  | 9,100 |  |  | 12,570 |  |  | 10,471 |
Other income(1) |  | — |  |  | (894 | ) |  | (4,131 | )
Earnings from discontinued operations(2) |  | — |  |  | 540 |  |  | 1,145 |
Total stock-based compensation expense |  | 9,100 |  |  | 12,216 |  |  | 7,485 |
(1) Represents the reversal of previously recognized stock-based compensation related to forfeited awards previously granted to employees who were terminated in connection with restructuring activities undertaken by the Company. (2) Represents stock-based compensation attributed to employees of Tradin Organic. Stock Incentive Plan On May 28, 2013, the Company's shareholders approved the 2013 Stock Incentive Plan, as amended (the "2013 Plan"), which permits the grant of a variety of stock-based awards, including stock options, restricted stock units ("RSUs") and performance share units ("PSUs") to selected employees and directors of the Company. As at January 1, 2022, 4,373,448 securities remained available for issuance under the 2013 Plan. Stock Options Stock options granted to employees during the three-year period ended January 1, 2022 vest ratably on each of the first through third anniversaries of the grant date and expire on the tenth anniversary of the grant date. Stock options granted by the Company contain an exercise price that is equal to the closing market price of the shares on the day prior to the grant date. Any consideration paid by employees or directors on the exercise of stock options or purchase of stock is credited to capital stock. The following table summarizes stock option activity for the year ended January 1, 2022:
|  |  |  |  |  |  |  | Weighted- |  |  |  |
|  |  |  |  |  |  |  | average |  |  |  |
|  |  |  |  | Weighted- |  |  | remaining |  |  |  |
|  |  |  |  | average |  |  | contractual |  |  | Aggregate |
|  | Stock options |  |  | exercise price |  |  | term (years) |  |  | intrinsic value |
Outstanding, beginning of year |  | 2,170,780 |  | $ | 6.95 |  |  |  |  |  |  |
Granted |  | 142,499 |  |  | 14.77 |  |  |  |  |  |  |
Exercised |  | (920,526 | ) |  | 7.18 |  |  |  |  |  |  |
Forfeited |  | (333,375 | ) |  | 7.56 |  |  |  |  |  |  |
Outstanding, end of year |  | 1,059,378 |  | $ | 7.75 |  |  | 6.5 |  | $ | 1,219 |
Exercisable, end of year |  | 665,988 |  | $ | 7.46 |  |  | 5.2 |  | $ | 653 |
The total intrinsic value of stock options exercised during the year ended January 1, 2022 was $5.1 million. The following table summarizes non-vested stock option activity during the year ended January 1, 2022:
|  |  |  |  | Weighted- |
|  |  |  |  | average grant- |
|  | Stock options |  |  | date fair value |
Non-vested, beginning of year |  | 554,987 |  | $ | 2.54 |
Granted |  | 142,499 |  |  | 8.10 |
Vested |  | (208,477 | ) |  | 2.49 |
Forfeited |  | (95,619 | ) |  | 3.26 |
Non-vested, end of year |  | 393,390 |  | $ | 4.49 |
The weighted-average grant-date fair values of all stock options granted in the years ended January 1, 2022, January 2, 2021 and December 28, 2019, were $8.10, $2.52 and $1.70, respectively. The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the stock options granted in those years were as follows:
| January 1, 2022 | January 2, 2021 | December 28, 2019
Grant-date stock price | $14.77 | $4.64 | $3.57
Dividend yield(a) | 0% | 0% | 0%
Expected volatility(b) | 61.7% | 60.0% | 48.6%
Risk-free interest rate(c) | 1.0% | 0.4% | 2.3%
Expected life of options (years)(d) | 6.0 | 6.0 | 5.8
(a) Determined based on expected annual dividend yield at the time of grant. (b) Determined based on historical volatility of the Company’s Common Shares over the expected life of the option. (c) Determined based on the yield on U.S. Treasury zero-coupon issues with maturity dates equal to the expected life of the option. (d) Determined based on the mid-point of vesting (one through three years) and expiration (10 years). Total compensation costs related to non-vested stock option awards not yet recognized as an expense was $1.3 million as at January 1, 2022, which will be amortized over a weighted-average remaining vesting period of 2.0 years. The following table summarizes stock options outstanding and exercisable as at January 1, 2022:
|  |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | average |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  | remaining |  |  | Weighted- |  |  |  |  |  | Weighted-
| Exercise price range |  |  | Outstanding |  |  | contractual life |  |  | average exercise |  |  | Exercisable |  |  | average exercise |
| Low |  |  | High |  |  | options |  |  | (years) |  |  | price |  |  | options |  |  | price |
$ | 3.25 |  | $ | 4.72 |  |  | 97,860 |  |  | 6.5 |  | $ | 3.58 |  |  | 87,060 |  | $ | 3.44 |
| 4.73 |  |  | 5.00 |  |  | 361,385 |  |  | 8.5 |  |  | 4.73 |  |  | 117,917 |  |  | 4.73 |
| 5.01 |  |  | 9.48 |  |  | 146,978 |  |  | 3.1 |  |  | 6.70 |  |  | 144,978 |  |  | 6.71 |
| 9.49 |  |  | 9.79 |  |  | 218,470 |  |  | 5.4 |  |  | 9.50 |  |  | 218,470 |  |  | 9.50 |
| 9.80 |  |  | 14.77 |  |  | 234,685 |  |  | 6.6 |  |  | 13.17 |  |  | 97,563 |  |  | 10.93 |
|  |  |  |  |  |  | 1,059,378 |  |  | 6.5 |  | $ | 7.75 |  |  | 665,988 |  | $ | 7.46 |
Restricted Stock Units RSUs granted to employees vest ratably on each of the first through third anniversaries of the grant date. RSUs granted to directors vest 100% on the first anniversary of the grant date. Each vested RSU entitles the employee or director to receive one Common Share without payment of additional consideration. The weighted-average grant-date fair values of all RSUs granted in the years ended January 1, 2022, January 2, 2021 and December 28, 2019, were $13.32, $3.20 and $3.33, respectively, based on the closing price of the Common Shares on the grant dates. The following table summarizes non-vested RSU activity during the year ended January 1, 2022:
|  |  |  |  | Weighted- |
|  |  |  |  | average grant- |
|  | RSUs |  |  | date fair value |
Non-vested, beginning of year |  | 647,299 |  | $ | 3.39 |
Granted |  | 245,848 |  |  | 13.32 |
Vested |  | (285,554 | ) |  | 3.93 |
Forfeited |  | (101,582 | ) |  | 3.78 |
Non-vested, end of year |  | 506,011 |  | $ | 7.71 |
The total intrinsic value of RSUs that vested during the year ended January 1, 2022 was $3.8 million. Total compensation costs related to non-vested RSU awards not yet recognized as an expense was $2.6 million as at January 1, 2022, which will be amortized over a weighted-average remaining vesting period of 2.0 years. Performance Share Units PSUs granted to certain employees under the Company's 2021, 2020 and 2019 short-term incentive plans and 2020 long-term incentive plan vest subject to the Company achieving predetermined measures of adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") (the "EBITDA PSUs"). Each vested EBITDA PSU entitles the employee to receive one Common Share without payment of additional consideration. The weighted-average grant-date fair values of the EBITDA PSUs granted during the years ended January 1, 2022, January 2, 2021 and December 28, 2019, were $13.90, $3.54 and $3.42, respectively, based on the closing price of the Common Shares on the grant dates. The following table summarizes non-vested EBITDA PSU activity during the year ended January 1, 2022:
|  |  |  |  | Weighted- |
|  |  |  |  | average grant- |
|  | EBITDA PSUs |  |  | date fair value |
Non-vested, beginning of year |  | 3,004,675 |  | $ | 3.56 |
Granted |  | 666,332 |  |  | 13.90 |
Vested |  | (2,813,175 | ) |  | 3.53 |
Forfeited |  | (187,661 | ) |  | 11.40 |
Non-vested, end of year |  | 670,171 |  | $ | 11.77 |
The total intrinsic value of EBITDA PSUs that vested during the year ended January 1, 2022 under the Company's 2020 short-term and long-term incentive plans was $37.3 million. Each reporting period, the number of unvested EBITDA PSUs that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of EBITDA PSUs is amortized on a straight-line basis over the remaining requisite service period less amounts previously recognized. As at January 1, 2022, the compensation cost not yet recognized as an expense related to unvested EBITDA PSUs granted under the Company's 2020 long-term incentive plan that are currently expected to vest was $0.4 million, which will be amortized over a weighted-average remaining vesting period of 1.5 years. As the EBITDA performance condition under the Company's 2021 short-term incentive plan was not achieved, the Company did not recognize any compensation expense related to those EBITDA PSUs, which was estimated to be $9.0 million as of the grant date. The vesting of 74,428 PSUs granted to selected employees under the Company's 2021 long-term incentive plan is dependent on the Company's total shareholder return ("TSR") performance relative to food and beverage companies in a designated index during the three-year period commencing January 1, 2021 and continuing through December 31, 2023, and the employee's continued employment with the Company through April 15, 2024 (the "TSR PSUs"). The TSR for the Company and each of the companies in the designated index will be calculated using a 20-trading day average closing price as of December 31, 2023. The percentage of vested TSR PSUs may range from 0% to 200% based on the Company's achievement of predetermined TSR thresholds. Each vested TSR PSU entitles the employee to receive one Common Share without payment of additional consideration. A grant-date fair value of $23.40 was estimated for the TSR PSUs using a Monte Carlo valuation model with the following assumptions:
Grant-date stock price | $ | 14.77 |
Dividend yield |  | 0% |
Expected volatility(a) |  | 76.9% |
Risk-free interest rate(b) |  | 0.3% |
Expected life (in years)(c) |  | 2.7 |
(a) Determined based on the historical volatility of the Common Shares over the performance period of the PSUs. (b) Determined based on U.S. Treasury yields with a remaining term equal to the performance period of the PSUs. (c) Determined based on the performance period of the PSUs. The following table summarized non-vested TSR PSU activity during the year ended January 1, 2022:
|  |  |  |  | Weighted- |
|  |  |  |  | average grant- |
|  | TSR PSUs |  |  | date fair value |
Non-vested, beginning of year |  | - |  | $ | - |
Granted |  | 74,428 |  |  | 23.40 |
Vested |  | - |  |  | - |
Forfeited |  | (3,082 | ) |  | 23.40 |
Non-vested, end of year |  | 71,346 |  | $ | 23.40 |
Total compensation costs related to non-vested TSR PSU awards not yet recognized as an expense was $1.3 million as at January 1, 2022, which will be amortized over a remaining vesting period of 2.3 years. Chief Executive Officer On April 1, 2019, Joseph D. Ennen was appointed CEO of the Company. In connection with his appointment, the Company granted Mr. Ennen options to purchase 960,061 Common Shares, 512,619 RSUs (of which 215,000 were issued to equal the number of Common Shares purchased by Mr. Ennen on the open market within the 60-day period after his employment began) and 1,785,714 PSUs. The stock options vest on April 1, 2022, subject to Mr. Ennen's continued employment during the vesting period, and expire on April 1, 2029. Each vested stock option entitles Mr. Ennen to purchase one Common Share at an exercise price of $3.36, which was equal to the closing price of the Common Shares on April 1, 2019. The RSUs vest in three equal annual installments beginning on April 1, 2020, and each vested RSU entitles Mr. Ennen to receive one Common Share of the Company without payment of additional consideration. The vesting of 892,857 of the PSUs granted is subject to the Company achieving predetermined annual thresholds of adjusted EBITDA from continuing operations during fiscal years 2019 through 2022, as follows: 297,619 PSUs vest upon the Company achieving annual adjusted EBITDA of $43 million, another 297,619 vest upon the Company achieving annual adjusted EBITDA of $65 million, and the final 297,619 vest upon the Company achieving annual adjusted EBITDA of $87 million, and subject to Mr. Ennen's continued employment with the Company through the end of the fiscal year during which the adjusted EBITDA performance condition is achieved. The vesting of the other 892,857 PSUs that were granted is subject to the Common Shares achieving certain volume-weighted average trading prices during a performance period commencing on April 1, 2019 and ending on December 31, 2022, as follows: 297,619 PSUs vest upon achieving a trading price of $5.00 per share, another 297,619 vest upon achieving a trading price of $9.00 per share, and the final 297,619 vest upon achieving a trading price of $14.00 per share, in each case for 20 consecutive trading days, and subject to Mr. Ennen's continued employment with the Company through the date the stock price performance condition is achieved. Each vested PSU entitles Mr. Ennen to receive one Common Share without payment of additional consideration. The weighted-average grant-date fair values of the RSUs and PSUs subject to the adjusted EBITDA performance condition were estimated to be $3.46 and $3.36, respectively, based on the closing price of Common Shares on the dates of grant. A grant-date fair value of $1.68 was estimated for the stock options using the Black-Scholes option pricing model, and a weighted-average grant-date fair value of $1.77 was estimated for the PSUs subject to the stock price performance condition using a Monte Carlo valuation model. The following table summarizes the inputs to the Black-Scholes option-pricing and Monte Carlo valuation models:
|  | Stock Options |  |  | PSUs |
Grant-date stock price | $ | 3.36 |  | $ | 3.36 |
Exercise price | $ | 3.36 |  |  | NA |
Dividend yield |  | 0% |  |  | 0% |
Expected volatility(a) |  | 47.9% |  |  | 55.7% |
Risk-free interest rate(b) |  | 2.4% |  |  | 2.3% |
Expected life (in years)(c) |  | 6.5 |  |  | 1.8 |
(a) Determined based on the historical volatility of the Common Shares over the expected life of the stock options and performance period of the PSUs. (b) Determined based on U.S. Treasury yields with a remaining term equal to the expected life of the stock options and performance period of the PSUs. (c) Determined based on the mid-point of vesting (three years) and expiration (ten years) for the stock options and the derived service period for the PSUs The aggregate grant-date fair value of the stock options, RSUs and PSUs awarded to Mr. Ennen was determined to be $8.0 million, which is being recognized on a straight-line basis over the vesting period for the stock options and RSUs and the derived service period for the PSUs. Each reporting period, the number of PSUs subject to the adjusted EBITDA performance condition that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of those PSUs is amortized over the remaining service period less amounts previously recognized. Total compensation costs related to Mr. Ennen's non-vested equity awards not yet recognized as an expense was $1.1 million as at January 1, 2022, which will be amortized over a weighted-average remaining vesting period of 0.8 years. The following table summarizes activity related to Mr. Ennen's non-vested equity awards during the year ended January 1, 2022:
|  | Stock |  |  |  |  |  | EBITDA |  |  | Stock price |
|  | options |  |  | RSUs |  |  | PSUs |  |  | PSUs |
Non-vested, beginning of year |  | 960,061 |  |  | 341,746 |  |  | 892,857 |  |  | 297,619 |
Vested |  | - |  |  | (170,873 | ) |  | (297,619 | ) |  | (297,619 | )
Non-vested, end of year |  | 960,061 |  |  | 170,873 |  |  | 595,238 |  |  | - |
The total intrinsic value of Mr. Ennen's equity awards that vested during the year ended January 1, 2022 was $11.5 million. Chief Financial Officer On September 3, 2019, Scott Huckins was appointed CFO of the Company. In connection with his appointment, the Company granted Mr. Huckins options to purchase 262,182 Common Shares, 327,819 RSUs (of which 154,500 were issued to equal the number of Common Shares purchased by Mr. Huckins on the open market prior to December 12, 2019) and 346,638 PSUs. The stock options vest on September 3, 2022, subject to Mr. Huckins' continued employment during the vesting period, and expire on September 3, 2029. Each vested stock option entitles Mr. Huckins to purchase one Common Share at an exercise price of $2.38, which was equal to the closing price of the Common Shares on September 3, 2019. The RSUs vest in three equal annual installments beginning on September 3, 2020, and each vested RSU entitles Mr. Huckins to receive one Common Share of the Company without payment of additional consideration. The vesting of 173,319 of the PSUs granted is subject to the Company achieving predetermined annual thresholds of adjusted EBITDA from continuing operations during fiscal years 2019 through 2022, as follows: 57,773 PSUs vest upon the Company achieving annual adjusted EBITDA of $43 million, another 57,773 vest upon the Company achieving annual adjusted EBITDA of $65 million, and the final 57,773 vest upon the Company achieving annual adjusted EBITDA of $87 million, and subject to Mr. Huckins' continued employment with the Company through the end of the fiscal year during which the adjusted EBITDA performance condition is achieved. The vesting of the other 173,319 PSUs that were granted is subject to the Common Shares achieving certain volume-weighted average trading prices during a performance period commencing on September 3, 2019 and ending on December 31, 2022, as follows: 57,773 PSUs vest upon achieving a trading price of $5.00 per share, another 57,773 vest upon achieving a trading price of $9.00 per share, and the final 57,773 vest upon achieving a trading price of $14.00 per share, in each case for 20 consecutive trading days, and subject to Mr. Huckins' continued employment with the Company through the date the stock price performance condition is achieved. Each vested PSU entitles Mr. Huckins to receive one Common Share without payment of additional consideration. The weighted-average grant-date fair values of the RSUs and PSUs subject to the adjusted EBITDA performance condition were estimated to be $2.45 and $2.38, respectively, based on the closing price of Common Shares on the dates of grant. A grant-date fair value of $1.18 was estimated for the stock options using the Black-Scholes option pricing model, and a weighted-average grant-date fair value of $0.79 was estimated for the PSUs subject to the stock price performance condition using a Monte Carlo valuation model. The following table summarizes the inputs to the Black-Scholes option-pricing and Monte Carlo valuation models:
|  | Stock Options |  |  | PSUs |
Grant-date stock price | $ | 2.38 |  | $ | 2.38 |
Exercise price | $ | 2.38 |  |  | NA |
Dividend yield |  | 0% |  |  | 0% |
Expected volatility(a) |  | 49.7% |  |  | 55.9% |
Risk-free interest rate(b) |  | 1.4% |  |  | 1.4% |
Expected life (in years)(c) |  | 6.5 |  |  | 2.1 |
(a) Determined based on the historical volatility of the Common Shares over the expected life of the stock options and performance period of the PSUs. (b) Determined based on U.S. Treasury yields with a remaining term equal to the expected life of the stock options and performance period of the PSUs. (c) Determined based on the mid-point of vesting (three years) and expiration (ten years) for the stock options and the derived service period for the PSUs. In connection with his employment agreement, the Company issued Mr. Huckins an additional 29,090 RSUs during the year ended January 1, 2022, which will vest on each of the first three anniversaries of the date of the grant, subject to Mr. Huckins continued employment with the Company. The grant-date fair value of these additional RSUs was estimated to be $15.49 based on the closing price of the Common Shares on the date of grant. The aggregate grant-date fair value of the stock options, RSUs and PSUs awarded to Mr. Huckins was determined to be $2.1 million, which is being recognized on a straight-line basis over the vesting period for the stock options and RSUs and the derived service period for the PSUs. Each reporting period, the number of PSUs subject to the adjusted EBITDA performance condition that are expected to vest is redetermined and the aggregate grant-date fair value of the redetermined number of those PSUs is amortized over the remaining service period less amounts previously recognized. Total compensation costs related to Mr. Huckins' non-vested equity awards not yet recognized as an expense was $0.7 million as at January 1, 2022, which will be amortized over a weighted-average remaining vesting period of 1.4 years. The following table summarizes activity related to Mr. Huckins' non-vested equity awards during the year ended January 1, 2022:
|  | Stock |  |  |  |  |  | EBITDA |  |  | Stock price |
|  | options |  |  | RSUs |  |  | PSUs |  |  | PSUs |
Non-vested, beginning of year |  | 262,182 |  |  | 218,546 |  |  | 173,319 |  |  | 57,773 |
Granted |  | - |  |  | 29,090 |  |  | - |  |  | - |
Vested |  | - |  |  | (109,273 | ) |  | (57,773 | ) |  | (57,773 | )
Non-vested, end of year |  | 262,182 |  |  | 138,363 |  |  | 115,546 |  |  | - |
The total intrinsic value of Mr. Huckins' equity awards that vested during the year ended January 1, 2022 was $2.8 million. Employee Stock Purchase Plan The Company maintains an Employee Stock Purchase Plan whereby employees can purchase common shares through payroll deductions. For the year ended January 1, 2022, the Company's employees purchased 66,834 Common Shares (January 2, 2021 - 113,581; December 28, 2019 - 185,415) for total proceeds of $0.6 million (January 2, 2021 - $0.5 million; December 28, 2019 - $0.5 million). As at January 1, 2022, 634,082 Common Shares are remaining to be granted under this plan.

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