XML 33 R17.htm IDEA: XBRL DOCUMENT v3.22.2
Stock-Based Compensation
 6 Months Ended
Jul. 02, 2022
Share-based Payment Arrangement [Abstract]  
Stock-based compensation[Text Block] Stock-Based CompensationOur shareholders approved the 2014 Omnibus Stock Plan (the “2014 Stock Plan”) at our annual meeting of shareholders on May 20, 2014. The 2014 Stock Plan replaced the expired 2004 Omnibus Stock Plan (the “2004 plan”) previously approved by the shareholders in 2004. The 2014 Stock Plan is administered by the Compensation Committee of the Board of Directors and has a term of ten years. All directors of the Company and employees of the Company and its subsidiaries are eligible to participate in the 2014 Stock Plan. The 2014 Stock Plan (similar to the 2004 plan) continues the maintenance of the Employee Stock Purchase Plan, as well as provisions for the grant of stock options and other stock-based incentives. The 2014 Stock Plan provides for the grant of five percent of the number of the Company’s common shares outstanding as of the first day of each fiscal year plus the number of common shares that were available for grant of awards, but not granted, in prior years. In no event, however, may the number of common shares available for the grant of awards in any fiscal year exceed ten percent of the common shares outstanding as of the first day of that fiscal year. Common shares subject to an award
that is forfeited, terminated, or canceled without having been exercised are generally added back to the number of shares available for grant under the 2014 Stock Plan.
Stock-based compensation expense under all share-based payment plans -- our Employee Stock Purchase Plan, stock option plans, stock-settled stock appreciation rights ("SSARs") and restricted stock units ("RSUs") -- was included in the results of operations as follows:
 Three Months EndedSix Months Ended
July 2,
2022		July 3,
2021		July 2,
2022		July 3,
2021
Compensation expense, all share-based payment plans
$2,316 $1,374 $3,586 $2,265 
Stock-based compensation consisted of the following:
Employee Stock Purchase Plan--Under the Employee Stock Purchase Plan, all full-time employees with one year of service are eligible to purchase, through payroll deduction, common shares. Employee purchases under the Employee Stock Purchase Plan are at 85% of the fair market value of the common shares--a 15% discount. We recognize compensation costs as payroll deductions are made. The 15% discount of total shares purchased under the plan resulted in compensation cost of $914 being recognized for the six months ended July 2, 2022 and $770 for the six months ended July 3, 2021.
Stock Option Plans--The stock options outstanding were awarded under a graded vesting schedule, measured at fair value, and have a term of ten years. Compensation costs for stock options are recognized over the requisite service period on the straight-line recognition method. Compensation cost recognized for stock options was $219 for the six months ended July 2, 2022 and $256 for the six months ended July 3, 2021. Beginning in 2021, management and the Compensation Committee replaced the issuance of stock options with performance-based restricted stock units ("PRSUs") for certain employees.
Stock-Settled Stock Appreciation Rights--A SSAR is an award that allows the recipient to receive common shares equal to the appreciation in the fair market value of our common shares between the date the award was granted and the conversion date of the shares vested. Effective January 1, 2019, management and the Compensation Committee replaced the issuance of future SSARs with PRSUs for certain management employees.
The following table summarizes our SSARs as of July 2, 2022.
Stock-Settled
Stock Appreciation Rights		Number
of
Rights		Weighted-
Average
Award Date
Value		Weighted-
Average
Remaining
Contractual
Life		Unrecognized
Compensation
Cost		Aggregate
Intrinsic
Value
Unvested, January 1, 202287,534 $1.92    
Granted— —    
Forfeited— —    
Vested(43,752)1.92    
Unvested, July 2, 202243,782 $1.92 0.5 years$40 $792 

Compensation costs for SSARs are determined using a fair-value method and amortized over the requisite service period. “Intrinsic value” is defined as the amount by which the fair market value of a common share exceeds the grant date price of a SSAR. Compensation expense for SSARs was $44 for the six months ended July 2, 2022 and $82 for the six months ended July 3, 2021.
Restricted Stock Units--During the six months ended July 2, 2022, the Compensation Committee awarded 336,664 PRSUs to certain management employees and 14,693 RSUs to nonemployee directors. The Compensation Committee made similar awards in prior periods. The awards vest over specified periods. The following table summarizes PRSUs and RSUs as of July 2, 2022.
Restricted Stock UnitsNumber
of
Stock
Units		Weighted-
Average
Grant Date
Value		Weighted-
Average
Remaining
Contractual
Life		Unrecognized
Compensation
Cost		Aggregate
Intrinsic
Value
Unvested, January 1, 2022740,160 $12.49    
Granted351,357 17.89    
Forfeited(500)17.89    
Vested(171,688)10.86    
Unvested, July 2, 2022919,329 $14.86 2.2 years$9,424 $16,640 
Employee PRSUs861,628 $14.89 2.2 years$8,905 $15,596 
Nonemployee Director RSUs57,701 $14.42 2.6 years$519 $1,044 

Compensation cost for PRSUs and RSUs is determined using a fair-value method and amortized on the straight-line recognition method over the requisite service period. “Intrinsic value” is defined as the amount by which the fair market value of a common share exceeds the grant date price of a PRSU or an RSU. Compensation expense on PRSUs and RSUs totaled $2,409 for the six months ended July 2, 2022 and $1,157 for the six months ended July 3, 2021.
We estimated the fair value of each stock-based award on the date of grant using a binomial option-pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial model are based on historical volatility of our stock prices and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The binomial model also incorporates exercise and forfeiture assumptions based on an
analysis of historical data. The expected life of the stock-based awards is derived from the output of the binomial model and represents the period of time that awards granted are expected to be outstanding.
The fair values of stock-based awards granted were estimated at the dates of grant with the following weighted-average assumptions.
 Six Months Ended
July 2,
2022		July 3,
2021
Volatility rate9.7 %9.9 %
Risk-free interest rate1.7 %.3 %
Expected dividend yield.4 %.4 %
Expected life of awards (years)3.03.0
General Stock Option Information--The following table summarizes activity under the stock option plans for the six months ended July 2, 2022.
Stock OptionsNumber
of
Options
Outstanding		Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Life		Aggregate
Intrinsic
Value
Outstanding, January 1, 20222,350,934 $8.56   
Granted— —   
Exercised(201,901)8.28   
Forfeited(11,910)8.08   
Outstanding, July 2, 2022
2,137,123 $8.59 4.4 years$20,324 
Exercisable, July 2, 2022
1,749,031 $8.00 3.7 years$17,665 

As of July 2, 2022, there was approximately $568 of unrecognized compensation cost related to stock options outstanding. The cost is expected to be recognized over a weighted-average period of 1.4 years. “Intrinsic value” is defined as the amount by which the market price of a common share exceeds the exercise price of an option. 
Common shares are issued from treasury upon the exercise of stock options and SSARs, the vesting of RSUs and PRSUs or purchases under the Employee Stock Purchase Plan.