Stock-Based Compensation

6 Months Ended

Jul. 01, 2023

Share-based Payment Arrangement [Abstract]

8. Stock-Based Compensation

During the second quarter of 2023, the Company granted 1,107,650 performance share units ("PSUs") to selected employees under the Company's 2023 Short-Term Incentive Plan ("STIP"), which vest subject to the Company achieving a predetermined measure of adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") for fiscal 2023 and subject to the employee's continued employment with the Company through April 1, 2024 (the requisite service period) (the "EBITDA PSUs"). The grant-date fair value of each EBITDA PSU was estimated to be $6.99 based on the closing price of the Common Shares on the date of grant. As at July 1, 2023, the remaining compensation cost related to these EBITDA PSUs not yet recognized as an expense was determined to be $7.4 million, which will be amortized over the remaining requisite service period.

During the first quarter of 2023, the Company issued 1,242,659 Common Shares, net of 1,057,041 Common Shares withheld for taxes, in connection with the vesting of 2,299,700 EBITDA PSUs previously granted to selected employees. The total intrinsic value of these vested EBITDA PSUs was $18.0 million.

The following table summarizes all EBITDA PSU activity for the two quarters ended July 1, 2023:

				Weighted-
				average grant-
	EBITDA PSUs			date fair value
Non-vested, beginning of period	2,355,431		$	4.80
Granted	1,109,309			6.99
Vested	(2,299,700	)		4.78
Cancelled	(60,157	)		5.59
Non-vested, end of period	1,104,883		$	6.99

Subsequent to the second quarter of 2023, on July 10, 2023, the Company granted 186,906 restricted stock units ("RSUs"), 384,330 PSUs and 498,299 stock options to selected employees under the Company's 2023 Long-Term Incentive Plan ("LTIP"). The RSUs vest in three equal annual installments beginning on July 10, 2024, 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, 2023 and continuing through December 31, 2025, and subject to the employee's continued employment with the Company through April 15, 2026. 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, 2025. 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. 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 $6.35, which was the closing price of the Common Shares on July 10, 2023.