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Stock-Based Compensation | 9 Months Ended
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Sep. 28, 2024
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation [Text Block] | 10. Stock-Based Compensation Short-Term Incentive Plan On April 4, 2024, the Company granted 638,602 performance share units ("PSUs") to selected employees under the Company's 2024 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 2024 and subject to the employee's continued employment with the Company through April 1, 2025 (the requisite service period). The grant-date fair value of each PSU was estimated to be $6.42 based on the closing price of the Common Shares on the date of grant. For the period from the grant date to September 28, 2024, the Company recognized compensation expense of $1.9 million related to the PSUs that are currently expected to vest, with the remaining compensation cost not yet recognized as an expense related to these PSUs determined to be $2.0 million as at September 28, 2024, which will be amortized over the remaining requisite service period. On April 1 2024, the Company issued 474,228 Common Shares, net of 344,276 Common Shares withheld for taxes, in connection with the vesting of 818,504 PSUs previously granted to selected employees under the Company's 2023 STIP. The total intrinsic value of these vested PSUs was $5.6 million. Long-Term Incentive Plan On April 30, 2024, the Company granted 157,070 restricted stock units ("RSUs"), 252,656 PSUs and 243,660 stock options to selected employees under the Company's 2024 Long-Term Incentive Plan ("LTIP"). The RSUs vest in three equal annual installments beginning on April 30, 2025, and each vested RSU entitles the employee to receive one Common Share without payment of additional consideration. The vesting of one-half of the PSUs is contingent on the achievement of compound annual growth rate ("CAGR") benchmarks for revenue during the three-year performance period commencing January 1, 2024 and continuing through December 31, 2026, and the vesting of the other one-half of the PSUs is contingent on the achievement of return on invested capital ("ROIC") benchmarks within the same performance period, and subject to the employee's continued employment with the Company through April 30, 2027. The percentage of vested PSUs may range from 0% to 200% based on the Company's achievement of the predetermined CAGR and ROIC benchmarks. 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 $6.55, which was the closing price of the Common Shares on April 30, 2024. The grant-date fair values of each RSU and PSU were estimated to be $6.55 based on the closing price of the Common Shares on the date of grant. A grant-date fair value of $4.18 was estimated for each stock option using the Black-Scholes option pricing model with the following assumptions:
Grant-date stock price | $ | 6.55 |
Exercise price | $ | 6.55 |
Dividend yield |  | 0% |
Expected volatility(a) |  | 65.9% |
Risk-free interest rate(b) |  | 4.7% |
Expected life (in years)(c) |  | 6.0 |
(a) Determined based on the historical volatility of the Common Shares over expected life of the stock options. (b) Determined based on U.S. Treasury yields with a remaining term equal to the expected life of the stock options. (c) Determined based on 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 2024 LTIP was determined to be $5.4 million, which will be recognized on a straight-line basis over the requisite service period ending April 30, 2027. Special Awards On January 2, 2024, the Company granted special one-time awards of 144,404 restricted stock units ("RSUs"), 288,808 performance share units ("PSUs") and 230,804 stock options to Brian Kocher in connection with his appointment as the Company's Chief Executive Officer effective January 2, 2024. On March 13, 2024, the Company granted Mr. Kocher an additional 74,000 RSUs, equal to the number of Common Shares purchased by Mr. Kocher on the open market within the 75-day period after his employment began. The RSUs vest in three equal annual installments beginning on the first anniversary of the grant date, and each vested RSU entitles Mr. Kocher 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, 2024 and continuing through December 31, 2026, and subject to Mr. Kocher's continued employment with the Company through April 15, 2027. 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, 2026. 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 Mr. Kocher 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 Mr. Kocher to purchase one Common Share at an exercise price of $5.54, which was the closing price of the Common Shares on January 2, 2024. The weighted-average grant-date fair value of the RSUs was estimated to be $6.05 based on the closing prices of Common Shares on the dates of grant. A grant-date fair value of $3.47 was estimated for the stock options using the Black-Scholes option pricing model, and a grant-date fair value of $7.73 was estimated for the PSUs 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 | $ | 5.54 |  | $ | 5.54 |
Exercise price | $ | 5.54 |  |  | NA |
Dividend yield |  | 0% |  |  | 0% |
Expected volatility(a) |  | 65.6% |  |  | 58.4% |
Risk-free interest rate(b) |  | 3.9% |  |  | 4.1% |
Expected life (in years)(c) |  | 6.0 |  |  | 3.0 |
(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 performance period for the PSUs. The aggregate grant-date fair value of the stock options, RSUs and PSUs awarded to Mr. Kocher was determined to be $4.4 million, which will be recognized on a straight-line basis over the vesting period for the stock options and RSUs and the performance period for the PSUs.

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