Stockholders' Equity

12 Months Ended

Dec. 29, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Note 12 — Stockholders’ Equity

Incentive Plan

The Company maintains an Amended and Restated Omnibus Equity Incentive Plan (the “Equity Plan”). The Equity Plan allows for awards of stock options, stock appreciation rights, restricted stock, RSUs, and other stock- and cash-based awards, including awards that are subject to service-based and performance-based vesting conditions. As of December 29, 2023, the Company had outstanding grants of stock options, restricted stock awards, RSUs and PSUs.

Stock options granted under the Equity Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board, and expire over periods not exceeding 10 years from the date of grant. Certain stock options and stock-based awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Equity Plan). Grants of restricted stock outstanding under the Equity Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Equity Plan generally vest based on service, performance, or a combination of both. On June 15, 2023, the Company’s stockholders approved a proposal to increase the number of shares that may be issued pursuant to stock-based awards granted under the Equity Plan, which increased the share pool by 2,170,000 shares, for a total of 20,205,000 shares. As of December 29, 2023, there were 2,993,717 shares available for grants of stock-based awards under the Equity Plan.

Stock-Based Compensation

The following table represents the fair value of stock-based compensation granted during the year ended 2023 (in thousands):

	Fair Value
Stock options	$	21,239
RSUs		17,227
PSUs		10,338
Restricted stock		715
Total stock-based compensation expense	$	49,519

The Company recorded stock-based compensation expense by award as follows (in thousands):

	Years Ended
	2023		2022		2021
Employee stock options	$	12,842	$	10,403	$	10,373
Restricted stock		548		686		616
RSUs		7,987		4,512		2,667
PSUs		1,270		3,525		371
Nonemployee stock options		869		1,245		578
Total stock-based compensation expense	$	23,516	$	20,371	$	14,605

The Company recorded stock-based compensation expense in the following categories (in thousands):

	Years Ended
	2023		2022		2021
Cost of sales	$	716	$	501	$	215
General and administrative		12,125		9,402		6,495
Selling and marketing		4,083		4,795		3,454
Research and development		6,592		5,673		4,441
Total stock-based compensation expense, net		23,516		20,371		14,605
Amounts capitalized as part of inventory		1,672		1,881		1,295
Total stock-based compensation expense, gross	$	25,188	$	22,252	$	15,900

Note 12 — Stockholders’ Equity (Continued)

Stock-Based Compensation (Continued)

As of December 29, 2023, total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Equity Plan were as follows (in thousands):

	2023
Stock options	$	22,001
Restricted stock, RSUs and PSUs		16,952
Total unrecognized stock-based compensation cost	$	38,953

This cost is expected to be recognized over a weighted-average period of approximately two years.

Assumptions

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of stock options granted is derived from the historical exercises and post-vesting cancellations, and represents the period of time that stock options granted are expected to be outstanding. The Company has calculated a 7% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

	Years Ended
	2023			2022			2021
Expected dividend yield		0	%		0	%		0	%
Expected volatility		60	%		54	%		53	%
Risk-free interest rate		3.98	%		2.09	%		0.84	%
Expected term (in years)		5.05			5.10			5.38

Stock Options

A summary of stock option activity under the Equity Plan for the year ended December 29, 2023 was as follows:

	Shares (in 000’s)			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in 000’s)
Outstanding at December 30, 2022		2,469		$	39.63
Granted		749			51.88
Exercised		(518	)		18.67
Forfeited or expired		(70	)		72.30
Outstanding at December 29, 2023		2,630		$	46.38		6.04	$	10,088
Exercisable at December 29, 2023		1,704		$	40.70		4.55	$	10,088

Note 12 — Stockholders’ Equity (Continued)

Stock Options (Continued)

A summary of unvested stock options activity under the Equity Plan for the year ended December 29, 2023 was as follows:

	Shares (in 000’s)			Weighted- Average Grant-Date Fair Value
Outstanding at December 30, 2022		633		$	35.37
Granted		749			28.36
Forfeited or expired		(70	)		35.30
Vested		(386	)		34.63
Unvested at December 29, 2023		926		$	30.09

The weighted average grant date fair value of stock options granted under the Equity Plan and the total intrinsic value of stock options exercised were as follows:

	Years Ended
	2023		2022		2021
Weighted-average grant-date fair value	$	28.36	$	35.68	$	45.08
Intrinsic value of options exercised (in thousands)	$	17,041	$	25,000	$	127,024

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSU and PSU activity under the Equity Plan for the year ended December 29, 2023 was as follows:

	Restricted Stock					Restricted Stock Units					Performance Stock Units
	Units (in 000’s)			Weighted- Average Grant- Date Fair Value		Units (in 000’s)			Weighted- Average Grant- Date Fair Value		Units (in 000’s)			Weighted- Average Grant- Date Fair Value
Outstanding at December 30, 2022		4		$	62.10		192		$	73.25		118		$	73.78
Granted		15			46.70		336			51.28		182			56.64
Vested		(5	)		55.99		(95	)		68.43		(35	)		71.41
Forfeited or expired		—			—		(32	)		75.86		(209	)		58.93
Outstanding at December 29, 2023		14		$	47.61		401		$	55.75		56		$	74.80