Stock-Based Compensation

3 Months Ended

Mar. 31, 2017

5. Stock-based Compensation

During the three months ended March 31, 2017, the Company granted stock only stock appreciation rights (“SOSARs”) on 288 shares of its common stock to eligible employees. The weighted average grant date fair value of the SOSARs was $106.13 per share with a weighted average exercise price of $427.38 per share based on the closing price of common stock on the date of grant. The SOSARs vest in two equal installments on the second and third anniversary of the grant date. During the three months ended March 31, 2017, 11 SOSARs were exercised and 39 SOSARs were forfeited.

During the three months ended March 31, 2017, the Company granted restricted stock units (“RSUs”) on 81 shares of its common stock to eligible employees. The weighted average grant date fair value of the RSUs was $427.47 per share. The RSUs generally vest in two equal installments on the second and third anniversary of the grant date.

During the three months ended March 31, 2017, the Company awarded 36 performance shares (“PSUs”) that are subject to service, market and performance vesting conditions. Two-thirds of the PSUs had a grant date fair value of $485.53 per share and vest based on the price of the Company’s common stock reaching certain targets for a consecutive number of days during the three-year period starting on the grant date and the quantity of shares that will vest range from 0% to 350% of the targeted number of shares. The remaining one-third of PSUs had a grant date fair value of $427.61 and vest based on reaching certain comparable restaurant sales increases during the three-year period starting on January 1, 2017, and the quantity of shares that will vest range from 0% to 300% of the targeted number of shares. If the defined minimum targets are not met, then no shares will vest.

The following table sets forth total stock based compensation expense:



	Three months ended March 31,
	2017		2016
Stock based compensation expense	$	16,693	$	10,847
Stock based compensation expense (net of tax)		10,350		6,632
Stock based compensation expense recognized as capitalized development		237		342