Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation [Text Block]

14. Stock-Based Compensation

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 December 31, 2022, 114,398 securities remained available for issuance under the 2013 Plan.

In addition, in 2019, the Board of Directors approved inducement equity awards related to the appointment of the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), which totaled 1,222,243 stock options, 840,438 RSUs, and 2,132,352 PSUs. The stock options vested 100% in 2022 and the RSUs vested in three equal annual installments from 2020 through 2022. The vesting of 1,066,176 of the PSUs granted was subject to the Common Shares achieving certain volume-weighted average trading prices during a performance period commencing on the grant dates and ending on December 31, 2022. All of these PSUs vested prior to 2022. The vesting of the other 1,066,176 PSUs granted was subject to the Company achieving predetermined annual thresholds of adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") during fiscal years 2019 through 2022.

Stock options, RSUs and PSUs granted under the 2013 Plan, together with the corresponding CEO and CFO inducement equity awards are reflected in the tables below.

For the years ended December 31, 2022, January 1, 2022 and January 2, 2021, stock-based compensation was recorded in the consolidated statements of operations as follows:

	December 31, 2022	January 1, 2022	January 2, 2021
	$	$	$
Selling, general and administrative expenses	13,830	9,100	12,570
Other income(1)	-	-	(894	)
Earnings from discontinued operations(2)	-	-	540
Total stock-based compensation expense	13,830	9,100	12,216

(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 Options

Stock options granted to employees during the three-year period ended December 31, 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 on the exercise of stock options is credited to capital stock.

The following table summarizes stock option activity for the year ended December 31, 2022:

					Weighted-
					average
				Weighted-	remaining
				average	contractual		Aggregate
	Stock options			exercise price	term (years)		intrinsic value
Outstanding, beginning of year	2,281,621		$	5.29
Granted	1,800,007			5.91
Exercised	(69,457	)		6.18
Forfeited	(61,307	)		8.12
Expired	(30,264	)		5.96
Outstanding, end of year	3,920,600		$	5.51	7.5	$	12,734
Exercisable, end of year	1,954,761		$	4.79	5.9	$	7,845

The total intrinsic value of stock options exercised during the year ended December 31, 2022 was $0.3 million.

The following table summarizes non-vested stock option activity during the year ended December 31, 2022:

				Weighted-
				average grant-
	Stock options			date fair value
Non-vested, beginning of year	1,615,633		$	2.28
Granted	1,800,007			3.49
Vested	(1,405,905	)		4.01
Forfeited	(43,896	)		1.89
Non-vested, end of year	1,965,839		$	3.63

The weighted-average grant-date fair values of all stock options granted in the years ended December 31, 2022, January 1, 2022 and January 2, 2021, were $3.49, $8.10 and $2.52, respectively, using a Black-Scholes option pricing model with the following assumptions:

		December 31, 2022		January 1, 2022		January 2, 2021
Grant-date stock price	$	5.91	$	14.77	$	4.64
Dividend yield(a)		0%		0%		0%
Expected volatility(b)		61.6%		61.7%		60.0%
Risk-free interest rate(c)		3.0%		1.0%		0.4%
Expected life of options (years)(d)		6.0		6.0		6.0

(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 $5.4 million as at December 31, 2022, which will be amortized over a weighted-average remaining vesting period of 2.2 years.

The following table summarizes stock options outstanding and exercisable as at December 31, 2022:

					Weighted-
					average
					remaining		Weighted-			Weighted-
	Exercise price range			Outstanding	contractual life		average exercise	Exercisable		average exercise
	Low		High	options	(years)		price	options		price
$	2.38	$	3.32	332,792	6.3	$	2.57	332,792	$	2.57
	3.33		3.73	960,061	6.3		3.36	960,061		3.36
	3.74		5.59	353,387	7.2		4.76	245,703		4.78
	5.60		6.28	1,780,431	9.3		5.91	5,793		5.91
	6.29		14.77	493,929	4.6		10.74	410,412		9.92
				3,920,600	7.5	$	5.51	1,954,761	$	4.79

Restricted Stock Units

RSUs granted to employees vest ratably on each of the first through third anniversaries of the grant date and 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 December 31, 2022, January 1, 2022 and January 2, 2021, were $6.40, $13.54 and $3.20, 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 December 31, 2022:

				Weighted-
				average grant-
	RSUs			date fair value
Non-vested, beginning of year	815,247		$	6.39
Granted	466,945			6.40
Vested	(549,754	)		5.40
Forfeited	(72,789	)		7.11
Non-vested, end of year	659,649		$	7.14

The total intrinsic value of RSUs that vested during the year ended December 31, 2022 was $3.8 million. Total compensation costs related to non-vested RSU awards not yet recognized as an expense was $3.1 million as at December 31, 2022, which will be amortized over a weighted-average remaining vesting period of 1.8 years.

Performance Share Units

The vesting of PSUs granted to employees under the Company's annual short-term incentive plans and 2020 long-term incentive plan are dependent on the Company achieving predetermined measures of adjusted 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 December 31, 2022, January 1, 2022 and January 2, 2021, were $5.45, $13.90 and $3.54, 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 December 31, 2022:

				Weighted-
				average grant-
	EBITDA PSUs			date fair value
Non-vested, beginning of year	1,380,955		$	7.62
Granted	1,846,196			5.45
Vested	(58,235	)		4.91
Cancelled or forfeited	(813,485	)		11.05
Non-vested, end of year	2,355,431		$	4.80

The total intrinsic value of EBITDA PSUs that vested during the year ended December 31, 2022 was $0.3 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 December 31, 2022, the compensation cost not yet recognized as an expense that are currently expected to vest was $2.6 million, which will be amortized over a weighted-average remaining vesting period of 0.3 years.

The vesting of PSUs granted to employees under the Company's 2022 and 2021 long-term incentive plans are dependent on the Company's total shareholder return ("TSR") performance relative to food and beverage companies in a designated index during a three-year performance period commencing on January 1 of the year of grant, and the employee's continued employment with the Company through the vesting date (the "TSR PSUs"). The TSR for the Company and each of the companies in the designated index will be calculated at the end of the applicable three-year performance period using a 20-trading day average closing price as of December 31. 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 respect to PSUs granted under the 2022 long-term incentive plan, the Board of Directors of the Company has the option to settle vested PSUs in whole or part in cash in lieu of Common Shares. As at December 31, 2022, the Company had the intent and ability to settle these PSUs in Common Shares.

The grant-date fair values of TSR PSUs granted in the years ended December 31, 2022 and January 1, 2022, were $8.48 and $23.40, respectively, using a Monte Carlo valuation model with the following assumptions:

		December 31, 2022		January 1, 2022
Grant-date stock price	$	5.91	$	14.77
Dividend yield		0%		0%
Expected volatility(a)		67.8%		76.9%
Risk-free interest rate(b)		2.8%		0.3%
Expected life (in years)(c)		2.7		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 December 31, 2022:

				Weighted-
				average grant-
	TSR PSUs			date fair value
Non-vested, beginning of year	71,346		$	23.40
Granted	547,071			8.48
Vested	-			-
Forfeited	(23,544	)		13.40
Non-vested, end of year	594,873		$	10.07

Total compensation costs related to non-vested TSR PSU awards not yet recognized as an expense was $4.2 million as at December 31, 2022, which will be amortized over a weighted-average remaining vesting period of 2.2 years.

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 December 31, 2022, the Company's employees purchased 87,850 Common Shares (January 1, 2022 - 66,834; January 2, 2021 - 113,581) for total proceeds of $0.6 million (January 1, 2022 - $0.6 million; January 2, 2021 - $0.5 million). As at December 31, 2022, 546,232 Common Shares remained available to be granted under this plan.