10. SHARE-BASED COMPENSATION

Pre-IPO Options and Management Restricted Units

The Company recorded compensation expense, net of forfeitures, of $0.7 million and $1.4 million for the three and six-month periods ended June 28, 2025, respectively, and $0.0 million and $0.8 million for the three and six-month periods ended June 29, 2024, respectively, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations. Unrecognized compensation expense as of June 28, 2025 associated with these outstanding awards was $1.5 million.

Director Restricted Stock Units

In February 2025, the Compensation Committee of the Company's Board of Directors (the "Compensation Committee") approved grants of 173,914 restricted stock units, with a grant date per share fair value of $4.26, to certain independent Directors ("Director RSUs") under the Company's 2021 Omnibus Stock Incentive Plan (the "2021 Omnibus Incentive Plan"). Director RSUs vest on the first anniversary of the grant date, and each RSU settles for one share of common stock upon vesting. The Company recorded compensation expense of $0.3 million and $0.4 million for the three and six-month periods ended June 28, 2025, respectively, and $0.3 million and $0.5 million for the three and six-month periods ended June 29, 2024, respectively, which is included in corporate expenses in the accompanying consolidated statements of operations. Unrecognized compensation expense as of June 28, 2025 associated with outstanding director restricted stock units was $0.4 million.

Long-Term Incentive Plan ("LTIP")

In February 2025, the Compensation Committee approved grants of restricted stock units ("RSUs") and performance stock units ("PSUs") under the Company's 2021 Omnibus Stock Incentive Plan. Annual grants of RSUs and PSUs have been awarded since fiscal year 2022. Upon vesting, each RSU and each PSU settles for one share of common stock.

The RSUs are subject to a three-year service-based cliff vesting schedule commencing on the date of grant. Compensation cost for the RSUs is measured based on the grant date fair value of each underlying share of common stock and the number of RSUs granted and is recognized over the applicable vesting period on a straight-line basis. In February 2025, the Company granted 1,649,109 RSUs with a grant date per share fair value of $4.26. The Company recorded compensation expense, net of forfeitures, of $1.5 million and $3.1 million for the three and six-month periods ended June 28, 2025, respectively, and $1.1 million and $2.1 million for the three and six-month periods ended June 29, 2024, respectively, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations. Unrecognized compensation expense was $11.1 million as of June 28, 2025.

The PSUs contain performance criterion based on adjusted EBITDA targets for each of the three years during the vesting period. Achievement of any annual target during the three years subsequent to the grant date results in a cumulative achievement event for the target year and any prior year award not previously achieved. Additionally, the PSUs are subject to a three-year service-based cliff vesting schedule commencing on the date of grant. The PSUs have service and performance conditions, and compensation cost is initially measured based on the grant date fair value of each underlying share of common stock. Cumulative compensation cost is subsequently adjusted at the end of each reporting period to reflect the current estimation of achieving the performance condition. In February 2025, the Company granted 1,649,014 PSUs with a weighted average grant date per share fair value of $4.26. Further, during three-month period ended March 29, 2025, the Compensation Committee modified PSUs originally issued during the three-month period ended April 2, 2022. The previous performance criterion were replaced with an Adjusted EBITDA target for the fiscal year ending January 3, 2026. Effects of the modification are reflected in compensation expense, net of forfeitures, for the three and six-month periods ended June 28, 2025. The Company recorded compensation expense, net of forfeitures, of $2.2 million and $2.7 million for the three and six-month periods ended June 28, 2025, respectively, and $0.9 million and $1.6 million for the three and six-month periods ended June 29, 2024, respectively, which is included in corporate and branch and regional administrative expenses in the accompanying consolidated statements of operations. Unrecognized compensation expense was $12.5 million as of June 28, 2025.

Senior Management Retention Plan ("SMRP")

In the second quarter of 2023, the Compensation Committee approved SMRP awards to certain members of management to be paid in the form of RSUs under the 2021 Omnibus Stock Incentive Plan. The awards were granted based on a fixed dollar value for each member of senior management included in the plan. The performance condition related to the SMRP was achieved on March 29, 2025, resulting in the acceleration of the related compensation expense of the awards. The Company recorded no compensation expense during the three-month period ended June 28, 2025 and compensation expense, net of forfeitures, of $7.6 million during the six-month period ended June 28, 2025, and $0.8 million and $1.7 million during the three and six-month periods ended June 29, 2024, respectively, which is included in corporate expenses and branch and regional administrative expenses in the accompanying consolidated statements of operations. There was no unrecognized compensation expense as of June 28, 2025.

Total compensation expense, net of forfeitures, for all awards under the Company's previous stock incentive plan (the "Amended 2017 Plan") and 2021 Omnibus Incentive Plan was $4.7 million and $15.2 million for the three and six-month periods ended June 28, 2025 and $3.1 million and $6.7 million for the three and six-month periods ended June 29, 2024, respectively. Total unrecognized compensation expense for all awards under the Amended 2017 Plan and 2021 Omnibus Incentive Plan was $25.5 million as of June 28, 2025.

Employee Stock Purchase Plan

During the three-month periods ended June 28, 2025 and June 29, 2024, no purchase events related to the Employee Stock Purchase Plan occurred. During the six-month period ended June 28, 2025, participants purchased a total of 847,673 shares of common stock at an average price of $2.11 per share. During the six-month period ended June 29, 2024, participants purchased 1,010,635 shares of common stock at a weighted average price of approximately $1.33 per share.

The Company recorded compensation expense of $0.5 million and $0.9 million for the three and six-month periods ended June 28, 2025, respectively, and $0.4 million and $0.8 million for the three and six-month periods ended June 29, 2024, respectively, which is included in corporate expenses, branch and regional administrative expenses and cost of revenue, excluding depreciation and amortization in the accompanying consolidated statements of operations.