Our current shareholder approved stock-based compensation plan is the BJ’s Restaurants, Inc. 2024 Equity Incentive Plan, (as it may be 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 grant non-qualified stock options, and service- and performance-based RSUs. Since fiscal 2024, we also grant performance-based RSUs with market-based metrics. Additionally, we issue time-based RSUs in connection with the BJ’s Gold Standard Stock Ownership Program (the “GSSOP”), a long-term equity incentive program under the Plan 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.

All options granted under the Plan expire within 10 years of their date of grant. Awards of stock options or stock appreciation rights are charged against the Plan share reserve on the basis of one share for each option granted. All other awards are charged against the 2024 Plan share reserve on the basis of 1.5 shares for each award unit granted. We estimate forfeitures based on historical data and we take into consideration future expectations. 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.

We use the Black-Scholes option-pricing model to determine the fair value of our stock options, and we use the Monte Carlo simulation model to determine the fair value of our performance-based RSUs that include a market-based metric. Both valuation models require management to make assumptions regarding stock price, volatility, the expected life of the award, risk-free interest rate and expected dividend yield. The fair value of service-based and performance-based RSUs without market-based metrics, is equal to

the fair value of our common stock at market close on the grant date, or the last trading day prior to the grant date if the grant occurs on a day when the market is closed.

The grant date fair value of each stock option, service-based RSU, and performance-based RSU with market-based metrics is recognized as stock-based compensation expense on a straight-line basis over the applicable vesting period (e.g., one, three or five years). For performance-based RSUs without market-based metrics, stock-based compensation expense recognition is recognized based on the estimated number of awards that is expected to vest, which is reassessed each reporting period based on management’s current estimate of achievement of the applicable performance goals. Forfeitures are estimated based on historical experience and adjusted for future expectations.

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 cliff vest at one year or ratably over three 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 150% of the grant quantity, depending 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
	April 1, 2025		April 2, 2024
Labor and benefits	$	400	$	508
General and administrative	$	1,550	$	1,969
Capitalized (1)	$	90	$	84
Total stock-based compensation	$	2,040	$	2,561

(1)

Capitalized stock-based compensation relates to our restaurant development personnel and is included in “Property and equipment, net” on the Consolidated Balance Sheets.

The fair value of each stock option was estimated on the grant date using the Black‑Scholes option-pricing model with the following assumptions:


	For the Thirteen Weeks Ended
	April 1, 2025			April 2, 2024
Volatility		67.9	%		67.5	%
Risk-free interest rate		4.6	%		3.9	%
Expected life (years)	5			5
Expected dividend yield		—	%		—	%
Fair value of options granted	$	20.62		$	18.86

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 December 31, 2024		933		$	39.10		741	$	41.00
Granted		35			34.28
Exercised		(23	)		29.81
Forfeited		(83	)		44.71
Outstanding at April 1, 2025		862		$	38.61		719	$	39.81

As of April 1, 2025, total unrecognized stock-based compensation expense related to non-vested stock options was approximately $2.1 million, which is expected to be recognized over the next three years.

The following table presents service-based restricted stock unit activity:


	Shares (in thousands)			Weighted Average Fair Value
Outstanding at December 31, 2024		772		$	30.45
Granted		85			34.28
Released		(99	)		32.70
Forfeited		(32	)		30.94
Outstanding at April 1, 2025		726		$	30.57

As of April 1, 2025, total unrecognized stock-based compensation expense related to non-vested service-based RSUs was approximately $11.7 million, which is expected to be recognized over the next three to five years.

The following table presents performance-based restricted stock unit activity:


	Shares (in thousands)			Weighted Average Fair Value
Outstanding at December 31, 2024		83		$	32.89
Awarded		90			37.40
Released		(39	)		32.27
Forfeited		(13	)		33.59
Outstanding at April 1, 2025		121		$	36.38

The fair value of performance-based RSUs, which include a market-based metric, was estimated on the grant date using the Monte Carlo simulation model with the following assumptions:


	For the Thirteen Weeks Ended
	April 1, 2025			April 2, 2024
Volatility		47.1	%		49.8	%
Risk-free interest rate		4.3	%		3.8	%
Expected life (years)	3			3
Expected dividend yield		—	%		—	%
Fair value of market-based awards granted	$	34.28		$	34.79

As of April 1, 2025, the total unrecognized stock-based compensation expense related to non-vested market-based and performance-based RSUs was approximately $2.9 million, which is expected to be recognized over the next three years.

6. STOCK-BASED COMPENSATION