6. Stock-Based Compensation

On April 5, 2017, our Board approved an amendment to our 2010 Stock Incentive Plan to increase the number of shares of common stock available for grant under the plan to 12.7 million shares from 9.2 million shares. This amendment was approved by our stockholders at our annual meeting held on June 8, 2017.

The following table presents information related to stock-based compensation, net of forfeitures (in thousands):

	Thirteen Weeks Ended July 4, 2017		Thirteen Weeks Ended June 28, 2016		Twenty-Six Weeks Ended July 4, 2017		Twenty-Six Weeks Ended June 28, 2016

Labor expenses	$	1,716	$	1,708	$	3,461	$	2,964
Other operating costs and expenses	64		75		162		125
General and administrative expenses	3,393		4,336		6,165		8,215

Total stock-based compensation	5,173		6,119		9,788		11,304
Income tax benefit	1,979		2,340		3,744		4,324

Total stock-based compensation, net of taxes	$	3,194	$	3,779	$	6,044	$	6,980


Capitalized stock-based compensation (1)	$	93	$	76	$	148	$	149

(1)

It is our policy to capitalize the portion of stock-based compensation costs for our internal development and construction, legal, and facilities departments that relates to capitalizable activities such as the design and construction of new restaurants, remodeling existing locations, lease, intellectual property, liquor license acquisition activities and equipment installation. Capitalized stock-based compensation is included in property and equipment, net and other assets on the condensed consolidated balance sheets.

Stock Options

The weighted average fair value at the grant date for options issued during the second quarter of fiscal 2017 was $12.86 per share. The fair value of options was estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for the second quarter of fiscal 2017, respectively: (a) an expected option term of 6.9 years; (b) expected stock price volatility of 23.7%; (c) a risk-free interest rate of 2.0%; and (d) a dividend yield on our stock of 1.7%. We did not issue any stock options during the second quarter of fiscal 2016.

Stock option activity during the twenty-six weeks ended July 4, 2017 was as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
	(In thousands)		(Per share)		(In years)	(In thousands)
Outstanding at January 3, 2017	1,955		$	37.65	4.0	$	42,592
Granted	199		61.49
Exercised	(289	)	26.68
Forfeited or cancelled	(27	)	44.86

Outstanding at July 4, 2017	1,838		$	41.82	4.4	$	17,393


Exercisable at July 4, 2017	1,096		$	35.61	3.2	$	15,782

(1)

Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised their options on the fiscal period end date.

The total intrinsic value of options exercised during the thirteen and twenty-six weeks ended July 4, 2017 was $3.4 million and $10.0 million, respectively. The total intrinsic value of options exercised during the thirteen and twenty-six weeks ended June 28, 2016 was $2.4 million and $18.6 million, respectively. As of July 4, 2017, total unrecognized stock-based compensation expense related to unvested stock options was $8.7 million, which we expect to recognize over a weighted average period of approximately 3.1 years.

Restricted Shares and Restricted Share Units

Restricted share and restricted share unit activity during the twenty-six weeks ended July 4, 2017 was as follows:

	Shares		Weighted Average Fair Value
	(In thousands)		(Per share)

Outstanding at January 3, 2017	1,861		$	45.11
Granted	306		61.42
Vested	(333	)	38.85
Forfeited	(56	)	43.54

Outstanding at July 4, 2017	1,778		$	49.05

Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant. The weighted average fair value for restricted shares and restricted share units issued during the second quarter of fiscal 2017 and fiscal 2016 was $62.50 and $52.08, respectively. The fair value of shares that vested during the thirteen and twenty-six weeks ended July 4, 2017 was $2.0 million and $12.9 million, respectively. The fair value of shares that vested during the thirteen and twenty-six weeks ended June 28, 2016 was $0.3 million and $8.7 million, respectively. As of July 4, 2017, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $46.3 million, which we expect to recognize over a weighted average period of approximately 2.8 years.