(11)	Stock Incentive Plans

In 2003, the Company adopted the Build-A-Bear Workshop, Inc. 2002 Stock Incentive Plan (the 2002 Plan). In 2004, the Company adopted the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan (the 2004 Plan) which the Company amended and restated in 2009 and 2014 (collectively, the Plans).

Under the Plans, as amended, up to 1,475,000 shares of common stock, in addition to shares of stock subject to awards outstanding under the 2002 Plan and the 2004 Plan that may lapse, terminate, be forfeited or otherwise expire were reserved and may be granted to employees and nonemployees of the Company. The Plans allow for the grant of awards including incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock and other stock-based and cash-based awards. Options granted under the Plans expire no later than 10 years from the date of the grant. The exercise price of all options, including each incentive stock option, shall not be less than 100% of the fair value of the stock subject to the option on the date the option is granted. The vesting provision of individual awards is at the discretion of the Compensation and Development Committee of the Company’s Board of Directors and generally ranges from one to four years.

(a)

Stock Options

The following table is a summary of the balance and activity for the Plans related to stock options for the periods presented:

					Weighted		Aggregate
			Weighted		Average		Intrinsic
	Number of		Average		Remaining		Value
	Shares		Exercise Price		Contractual Term		(in thousands)
Outstanding, December 29, 2012		1,155,239	$	8.53
Granted		195,512		6.56
Exercised		204,658		5.60
Forfeited		39,931		8.20
Canceled or expired		41,150		9.10
Outstanding, December 28, 2013		1,065,012		8.72
Granted		104,064		9.59
Exercised		351,856		6.64
Forfeited		96,019		21.54
Canceled or expired		6,750		8.78
Outstanding, January 3, 2015		714,451		8.14
Granted		71,517		20.58
Exercised		150,409		6.07
Forfeited		19,003		12.15
Canceled or expired		41,705		32.95
Outstanding, January 2, 2016		574,851	$	8.30		6.4	$	2,826

Options Exercisable As Of:
January 2, 2016		365,596	$	6.36		5.3	$	2,151

The expense recorded related to options granted during fiscal 2015, 2014 and 2013 was determined using the Black-Scholes option pricing model and the provisions of Staff Accounting Bulletin (SAB) 107 and 110, which allow the use of a simplified method to estimate the expected term of “plain vanilla” options. The assumptions used in the option pricing model during fiscal 2015, 2014 and 2013 were:

	2015			2014			2013

Dividend yield		0	%		0	%		0%
Historical volatility	51%	-	58%		65	%		65%
Risk-free rate	1.5	-	1.8 %	1.7	-	2.1%		1.3%
Expected life (years)		6	%	6	-	6.25		6.25

The total grant date fair value of options exercised in fiscal 2015, 2014 and 2013 was approximately $0.6 million, $0.6 million and $0.7 million, respectively. The total intrinsic value of options exercised in fiscal 2015, 2014 and 2013 was approximately $2.1 million, $1.6 million and $0.4 million, respectively. The Company generally issues new shares to satisfy option exercises.

Shares available for future option, non-vested stock and restricted stock grants were 1,271,884 and 1,323,925 at the end of 2015 and 2014, respectively.

(b)

Restricted Stock

Recipients of time-based restricted stock awards have the right to vote and receive dividends as to all unvested shares. The following table is a summary of the balance and activity for the Plans related to unvested time-based restricted stock granted as compensation to employees and directors for the periods presented:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding, December 29, 2012		860,325	$	5.78
Granted		321,664		6.00
Vested		399,405		5.39
Forfeited		62,386		5.78
Outstanding, December 28, 2013		720,198		5.91
Granted		202,274		10.31
Vested		345,577		6.25
Forfeited		157,221		6.21
Outstanding, January 3, 2015		419,674		7.64
Granted		107,004		19.59
Vested		205,137		7.84
Forfeited		44,988		8.89
Outstanding, January 2, 2016		276,553	$	11.93

In 2015, the Company also awarded performance-based restricted stock subject to the achievement of pre-established pre-tax income objectives for fiscal 2015. These shares of performance-based restricted stock had a payout opportunity ranging from 50% to 200% of the target number of shares. The target number of shares awarded was 36,222

with a weighted average grant date fair value of $20.58

per share. Based on the Company’s pre-tax income results for fiscal 2015, the number of shares earned was 22,458

. Additionally, the Company awarded three-year performance-based restricted stock subject to the achievement of pre-established cumulative pre-tax income goals for fiscal 2015, 2016 and 2017. These shares of three-year performance-based restricted stock also had a payout opportunity ranging from 50% to 200% of the target number of shares. The target number of shares awarded was 50,000 with a weighted average grant date fair value of $20.80 per share. The Company is currently unable to estimate the number of these shares expected to be earned.

The vesting date fair value of shares that vested in fiscal 2015, 2014 and 2013 was $4.0 million, $3.7 million and $2.2 million, respectively. The aggregate unearned compensation expense related to options and restricted stock was $3.5 million as of January 2, 2016 and is expected to be recognized over a weighted average period of 1.4 years.