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Stock-Based Compensation | 9 Months Ended
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Oct. 03, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 6. STOCK-BASED COMPENSATION Our current shareholder approved stock-based compensation plan is the BJ’s Restaurants, Inc. Equity Incentive Plan, (as amended from time to time, “the Plan”). Under the Plan, we may issue shares of our common stock to team members, officers, directors and consultants. We have historically granted incentive stock options, non-qualified stock options, restricted stock and performance and time-based restricted stock units. Stock options are charged against the Plan share reserve on the basis of one share for each share of common stock issuable upon exercise of options granted. All options granted under the Plan expire within 10 years of their date of grant. Grants of restricted stock, RSUs, performance shares and performance units, if any, are currently charged against the Plan share reserve on the basis of 1.5 shares for each share granted. The Plan also contains other limits on the terms of incentive grants such as the maximum number that can be granted to a team member during any fiscal year. Under the Plan, we issue time-based and performance-based RSUs and non-qualified stock options to senior vice presidents and above on an annual basis. We issue time-based RSUs and non-qualified stock options to vice presidents on an annual basis. New hires are given the option between receiving their full grant as a time-based RSU or split evenly between non-qualified stock options and time-based RSUs. We issue time-based RSUs to other select support team members, and we issue time-based RSUs to non-employee members of our Board of Directors. We also issue time-based RSUs in connection with the BJ’s Gold Standard Stock Ownership Program (the “GSSOP”), a long-term equity incentive program for our restaurant general managers, executive kitchen managers, directors of operations and directors of kitchen operations. All GSSOP participants are required to remain in good standing during their vesting period. The Plan permits our Board of Directors to set the vesting terms and exercise period for awards at their discretion; however, the grant of awards with no minimum vesting period or a vesting period less than one year may not exceed 5% of the total number of shares authorized under the Plan. Stock options and time-based RSUs vest ratably over one, three or five years for non-GSSOP participants and either cliff vest at five years or cliff vest at 33% on the third anniversary and 67% on the fifth anniversary for GSSOP participants. Performance-based RSUs cliff vest on the third anniversary of the grant date in an amount from 0% to 225% of the grant quantity, dependent on the level of performance target achievement. The following table presents the stock-based compensation recognized within our consolidated financial statements (in thousands):
|  | For the Thirteen Weeks Ended |  |  | For the Thirty-Nine Weeks Ended |
|  | October 3, 2023 |  |  | September 27, 2022 |  |  | October 3, 2023 |  |  | September 27, 2022 |
Labor and benefits |  | $ | 577 |  |  | $ | 653 |  |  | $ | 1,853 |  |  | $ | 2,043 |
General and administrative |  | $ | 2,092 |  |  | $ | 1,957 |  |  | $ | 6,236 |  |  | $ | 5,565 |
Capitalized (1) |  | $ | 97 |  |  | $ | 90 |  |  | $ | 285 |  |  | $ | 260 |
Total stock-based compensation |  | $ | 2,766 |  |  | $ | 2,700 |  |  | $ | 8,374 |  |  | $ | 7,868 |
(1) Capitalized stock-based compensation relates to our restaurant development personnel and is included in “Property and equipment, net” on the Consolidated Balance Sheets. Stock Options The fair value of each stock option was estimated on the grant date using the Black‑Scholes option-pricing model with the following weighted averag e assumptions:
|  | For the Thirty-Nine Weeks Ended |
|  | October 3, 2023 |  |  | September 27, 2022 |
Expected volatility |  |  | 66.9 | % |  |  | 63.2 | %
Risk-free interest rate |  |  | 3.5 | % |  |  | 1.6 | %
Expected option life |  | 5 years |  |  | 5 years |
Dividend yield |  |  | — | % |  |  | — | %
Fair value of options granted |  | $ | 18.31 |  |  | $ | 17.35 |
U.S. GAAP requires us to make certain assumptions and estimates regarding the grant date fair value. These include expected volatility, risk-free interest rate, expected option life, and dividend yield. These assumptions and estimates are determined using inputs that, in many cases, are outside of our control. Changes in these assumptions and estimates, including stock price volatility, dividend yield and risk-free interest rate, may significantly impact the fair value of future grants resulting in a significant impact to our financial results. Under our stock-based compensation plan, the exercise price of a stock option is required to equal or exceed the fair value of our common stock at market close on the option grant date or the last trading day prior to the date of grant when grants take place on a day when the market is closed. The following table presents stock option activity:
|  | Options Outstanding |  |  | Options Exercisable |
|  | Shares (in thousands) |  |  | Weighted Average Exercise Price |  |  | Shares (in thousands) |  |  | Weighted Average Exercise Price |
Outstanding at January 3, 2023 |  |  | 824 |  |  | $ | 40.48 |  |  |  | 601 |  |  | $ | 41.57 |
Granted |  |  | 122 |  |  |  | 31.32 |  |  |  |  |  |  |
Exercised |  |  | (8 | ) |  |  | 27.43 |  |  |  |  |  |  |
Forfeited |  |  | (52 | ) |  |  | 37.43 |  |  |  |  |  |  |
Outstanding at October 3, 2023 |  |  | 886 |  |  | $ | 39.52 |  |  |  | 664 |  |  | $ | 41.38 |
As of October 3, 2023, total unrecognized stock-based compensation expense related to non-vested stock options was approximate ly $2.4 million, w hich is expected to be recognized over the next three years. Restricted Stock Units Time-Based Restricted Stock Units The following table presents time-based restricted stock unit activity:
|  | Shares (in thousands) |  |  | Weighted Average Fair Value |
Outstanding at January 3, 2023 |  |  | 729 |  |  | $ | 34.10 |
Granted |  |  | 257 |  |  |  | 31.16 |
Released |  |  | (149 | ) |  |  | 36.38 |
Forfeited |  |  | (70 | ) |  |  | 31.93 |
Outstanding at October 3, 2023 |  |  | 767 |  |  | $ | 32.90 |
The fair value of time-based RSUs is equal to the fair value of our common stock at market close on the date of grant or the last trading day prior to the date of grant when grants take place on a day when the market is closed. The fair value of each time-based RSU is expensed over the vesting period (e.g., one, three or five years). As of October 3, 2023, total unrecognized stock-based compensation expense related to non-vested RSUs was a pproximately $11.8 million, w hich is expected to be recognized over the next five years. Performance-Based Restricted Stock Units The following table presents performance-based restricted stock unit activity:
|  | Shares (in thousands) |  |  | Weighted Average Fair Value |
Outstanding at January 3, 2023 |  |  | 123 |  |  | $ | 38.89 |
Granted |  |  | 52 |  |  |  | 31.87 |
Released |  |  | (40 | ) |  |  | 38.90 |
Forfeited |  |  | (7 | ) |  |  | 35.01 |
Outstanding at October 3, 2023 |  |  | 128 |  |  | $ | 36.24 |
The fair value of performance-based RSUs is equal to the fair value of our common stock at market close on the date of grant or the last trading day prior to the date of grant when grants take place on a day when the market is closed. The fair value of each performance-based RSU is expensed, based on management’s current estimate of the level that the performance goal will be achieved. As of October 3, 2023, based on the target level of performance, the total unrecognized stock-based compensation expense related to non-vested performance-based RSUs was approximately $2.0 million, whi ch is expected to be recognized over the next three years.

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