Equity Incentive Plan

The Company’s 2019 Equity Incentive Plan ("2019 Plan") and its predecessor equity plan provide for the grant of shares of restricted stock, restricted stock units, stock options, stock appreciation rights, dividend or dividend equivalent rights, stock awards and other awards valued in whole or in part by reference to or otherwise based on the Company’s common stock, to officers, employees and directors of the Company.

Restricted Stock Units

The Company grants restricted stock units (“RSUs”) to employees in connection with a long-term incentive plan. Awards with time-based vesting requirements primarily vest ratably over a three-year period. Awards with performance-based vesting requirements cliff vest after a three-year performance cycle and only after the achievement of certain performance criteria over that cycle. The number of shares ultimately issued for the performance-based units may vary from 0% to 200% of their target amount based on the achievement of defined performance targets. Compensation expense recognized for RSUs granted to employees totaled $3,978 and $2,796, respectively, for the six months ended July 2, 2022 and July 3, 2021.

Effective January 1, 2022, the board terminated the 2012 Non-Employee Director Fees Plan (the “2012 Directors Plan”) and approved a new Helios Technologies, Inc. Non-Employee Director Compensation Policy (the “Director Compensation Policy”), which revised the compensation for Non-Employee Directors. The Director Compensation Policy compensates Non-Employee Directors for their board service with cash awards and equity-based compensation through grants of RSUs, issued pursuant to the 2019 Plan, which vest over a one year period. Directors were granted 7,580 RSUs during the six months ended July 2, 2022. The Company recognized director stock compensation expense on the RSUs of $139 for the six months ended July 2, 2022. Directors were granted 14,250 shares of stock and the Company recognized director stock compensation expense of $1,043 for the six months ended July 3, 2021, under the 2012 Directors Plan.

The Company had $11,269 of total unrecognized compensation cost related to the RSU awards as of July 2, 2022. That cost is expected to be recognized over a weighted average period of 2.0 years.

Stock Options

In 2020 and 2021, the Company granted stock options to its officers. As of July 2, 2022, there were 13,222 unvested options and 11,011 vested unexercised options. The exercise prices per share, which range from $35.04 to $55.30, are equal to the market price of Helios stock on the respective grant dates. The options vest ratably over a three-year period and have a 10-year expiration. The grant date fair value of the options was estimated using a Black Scholes valuation model. At July 2, 2022, the Company had $198 of unrecognized compensation cost related to the options, which is expected to be recognized over a weighted average period of 1.5 years.

Employee Stock Purchase Plans

The Company maintains an Employee Stock Purchase Plan (“ESPP”) in which U.S. employees are eligible to participate. Employees who choose to participate are granted an opportunity to purchase common stock at 85 percent of market value on the first or last day of the quarterly purchase period, whichever is lower. Employees in the United Kingdom (“UK”), under a separate plan, are granted an opportunity to purchase the Company’s common stock at market value, on the first or last day of the quarterly purchase period, whichever is lower, with the Company issuing one additional free share of common stock for each six shares purchased by the employee under the plan. Employees purchased 17,076 shares at a weighted average price of $62.05, and 14,918 shares at a weighted average price of $53.37, under the ESPP and UK plans during the six months ended July 2, 2022 and July 3, 2021, respectively. The Company recognized $183 and $311 of compensation expense during the six months ended July 2, 2022 and July 3, 2021, respectively.