Share-Based Compensation

9 Months Ended

Oct. 01, 2022

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

Prior to July 24, 2022, under its long-term stock incentive plan, the Company had several share-based compensation award types, including stock options, restricted stock units and performance share unit awards. In connection with the merger, outstanding vested stock option awards were canceled and converted to the right to receive a fixed amount of cash equal to the intrinsic value of the awards and were paid in August 2022. Performance share units granted to certain key employees in March 2021 were paid in cash in September 2022 with the applicable total shareholder return metric determined using a per share price equal to the Merger Consideration and the EBITDA-based metric determined based on target performance.

Unvested awards were cancelled and converted into a contingent contractual right to receive a payment in cash, subject to the same time-based vesting conditions as the original awards. In the case of the performance share units that were granted in March 2020 to executives and certain key employees and in March 2021 to executives, the contingent contractual right to receive a cash payment from the Company will equal the product of the number of performance share units earned under the terms of the applicable award agreement, but with the applicable total shareholder return metric determined using a per share price equal to the Merger Consideration and the EBITDA-based metric determined based on actual performance as of the end of the performance period applicable to such performance share unit.

As of October 1, 2022, the Company has a liability of $103.5 million related to awards that will be cash settled as described above. The Company recorded $8.8 million in compensation expense in the Successor period from July 25, 2022 to October 1, 2022 for these awards.

In November 2022, pursuant to an incentive unit grant agreement, participants were granted a number of incentive units in Camelot Return Ultimate, LP. The Company will recognize compensation cost for the awards on a straight-line basis over the five-year vesting period based on the fair value of the award at the date of grant.