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Stock-Based Compensation | 3 Months Ended
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Apr. 02, 2022
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation [Text Block] | 6. Stock-Based Compensation On March 31, 2022, the Company granted a total of 1,271,371 performance share units ("PSUs") to certain employees of the Company under its 2022 Short-Term Incentive Plan ("STIP"). The vesting of these PSUs is subject to the Company achieving a predetermined measure of adjusted earnings before interest, taxes, depreciation and amortization for fiscal 2022 and subject to each employee's continued employment with the Company through March 31, 2023 (the requisite service period). The weighted-average grant-date fair value of each PSU was estimated to be $5.02 based on the closing price of the Common Shares on the date of grant. As at April 2, 2022, the remaining compensation cost related to these PSUs not yet recognized as an expense was determined to be $6.3 million, which will be amortized over the remaining requisite service period. On March 30, 2022, all outstanding PSUs previously granted to certain employees of the Company in connection with the Company's 2021 STIP were cancelled because the fiscal year 2021 performance condition was not achieved. No compensation expense was recognized related to these PSUs. The following table summarizes PSU activity for the quarter ended April 2, 2022:
|  |  |  |  | Weighted- |
|  |  |  |  | average grant- |
|  | PSUs |  |  | date fair value |
Non-vested, beginning of period |  | 670,171 |  | $ | 11.77 |
Granted |  | 1,271,371 |  |  | 5.02 |
Vested |  | (58,235 | ) |  | 4.91 |
Cancelled |  | (553,706 | ) |  | 13.87 |
Non-vested, end of period |  | 1,329,601 |  | $ | 5.02 |
Subsequent to the first quarter of 2022, on April 8, 2022, the Company granted an additional 479,564 PSUs to certain other employees of the Company under the 2022 STIP. The vesting date and requisite service period of these PSUs are on the same basis as the PSUs above granted on March 31, 2022. The aggregate grant-date fair value of these PSUs was estimated to be $2.9 million based on a closing price of $5.95 for the Common Shares on the date of grant, which will be amortized over the requisite service period. In addition, on May 5, 2022, the Company granted 92,877 restricted stock units ("RSUs"), 522,878 PSUs and 1,761,118 stock options to selected employees under its 2022 Long-Term Incentive Plan ("LTIP"). The RSUs vest in three equal annual installments beginning on May 5, 2023, and each vested RSU entitles the employee to receive one Common Share without payment of additional consideration. The vesting of the PSUs 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, 2022 and continuing through December 31, 2024, and the employee's continued employment with the Company through May 5, 2025. 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, 2024. The percentage of vested PSUs may range from 0% to 200% based on the Company's achievement of predetermined TSR thresholds. Each vested PSU entitles the employee to receive one Common Share without payment of additional consideration, with the Board of Directors having the option to settle vested PSUs in whole or part in cash in lieu of Common Shares. The stock options vest ratably on each of the first through third anniversaries of the grant date and expire on the tenth anniversary of the grant date. Each vested stock option entitles the employee to purchase one Common Share at an exercise price of $5.91, which was the closing price of the Common Shares on May 5, 2022. The grant-date fair value of each RSU was estimated to be $5.91 based on the closing price of the Common Shares on the date of grant. A grant-date fair value of $8.48 was estimated for each PSU using a Monte Carlo valuation model, and a grant-date fair value of $3.48 was estimated for each stock option using the Black-Scholes option pricing model. The following table summarizes the assumptions used to determine the fair values of the PSUs and stock options granted.
|  | PSUs |  |  | Stock options |
Grant-date stock price | $ | 5.91 |  | $ | 5.91 |
Exercise price |  | NA |  | $ | 5.91 |
Dividend yield |  | 0% |  |  | 0% |
Expected volatility(a) |  | 67.8% |  |  | 61.6% |
Risk-free interest rate(b) |  | 2.8% |  |  | 3.0% |
Expected life (in years)(c) |  | 2.7 |  |  | 6.0 |
(a) Determined based on the historical volatility of the Common Shares over the performance period of the PSUs and expected life of the stock options. (b) Determined based on U.S. Treasury yields with a remaining term equal to the performance period of the PSUs and expected life of the stock options. (c) Determined based on the performance period of the PSUs and the mid-point of vesting (three years) and expiration (ten years) for the stock options. The aggregate grant-date fair value of the RSUs, PSUs and stock options granted under the 2022 LTIP was determined to be $11.1 million, which will be recognized on a straight-line basis over the three-year requisite service period ending May 5, 2025.

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