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Stock-Based Compensation
 9 Months Ended
Oct. 03, 2017
Stock-Based Compensation  
Stock-Based Compensation

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
October 3, 2017

 

Thirteen
Weeks Ended
September 27, 2016

 

Thirty-Nine
Weeks Ended
October 3, 2017

 

Thirty-Nine
Weeks Ended
September 27, 2016

 

 

 

 

 

 

 

 

 

 

 

Labor expenses

 

$
1,726

 

$
1,494

 

$
5,187

 

$
4,458

 

Other operating costs and expenses

 
64

 
61

 
226

 
186

 

General and administrative expenses

 
3,489

 
3,318

 
9,654

 
11,533

 

 

 

 

 

 

 

 

 

 

 

Total stock-based compensation

 
5,279

 
4,873

 
15,067

 
16,177

 

Income tax benefit

 
2,019

 
1,864

 
5,763

 
6,188

 

 

 

 

 

 

 

 

 

 

 

Total stock-based compensation, net of taxes

 

$
3,260

 

$
3,009

 

$
9,304

 

$
9,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized stock-based compensation (1)

 

$
58

 

$
104

 

$
207

 

$
253

 

 

 

(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

 

We did not issue any stock options during the third quarters of fiscal 2017 or fiscal 2016.  Stock option activity during the thirty-nine weeks ended October 3, 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

 
(307

)
26.37

 

 

 

 

 

Forfeited or cancelled

 
(69

)
46.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at October 3, 2017

 
1,778

 

$
41.88

 
4.1

 

$
9,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at October 3, 2017

 
1,073

 

$
35.91

 
2.9

 

$
8,734

 

 

 

(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 thirty-nine weeks ended October 3, 2017 was $0.4 million and $10.4 million, respectively.  The total intrinsic value of options exercised during the thirteen and thirty-nine weeks ended September 27, 2016 was $6.0 million and $24.6 million, respectively.  As of October 3, 2017, total unrecognized stock-based compensation expense related to unvested stock options was $6.3 million, which we expect to recognize over a weighted average period of approximately 2.8 years.

 

Restricted Shares and Restricted Share Units

 

Restricted share and restricted share unit activity during the thirty-nine weeks ended October 3, 2017 was as follows:

 

 

 

Shares

 

Weighted
Average
Fair Value

 

 

 

(In thousands)

 

(Per share)

 

 

 

 

 

 

 

Outstanding at January 3, 2017

 
1,861

 

$
45.11

 

Granted

 
400

 
56.86

 

Vested

 
(396

)
38.27

 

Forfeited

 
(103

)
44.98

 

 

 

 

 

 

 

Outstanding at October 3, 2017

 
1,762

 

$
49.12

 

 

 

 

 

 

 

 

 

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 third quarter of fiscal 2017 and fiscal 2016 was $42.03 and $50.44, respectively.  The fair value of shares that vested during the thirteen and thirty-nine weeks ended October 3, 2017 was $2.2 million and $15.1 million, respectively.  The fair value of shares that vested during the thirteen and thirty-nine weeks ended September 27, 2016 was $1.4 million and $10.1 million, respectively.  As of October 3, 2017, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $39.4 million, which we expect to recognize over a weighted average period of approximately 2.7 years.