Stock-Based Compensation

12 Months Ended

Dec. 29, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The Company's Stock Incentive Plan, as amended and restated in May of 2013, authorizes the grant of nonqualified stock options, incentive stock options, stock appreciation rights ("SARs"), restricted stock, restricted stock units ("RSUs") and incentive bonuses

to employees, officers, nonemployee directors and other service providers. The number of shares of common stock available for issuance pursuant to awards granted under the Stock Incentive Plan on or after the IPO shall not exceed 3,750,500 shares. The Plan

is administered by the Compensation Committee of the Company's board of directors (the "Board") or another committee designated by the Board, or in the absence of any such committee, the Board itself (the "administrator"). Stock options are granted at a price determined by the administrator at an exercise price that is not less than the fair market value of the underlying stock on the date of option is grant. The administrator may also grant SARs and RSUs with terms determined by the administrator in accordance with the Plan. The fair market value of shares prior to the IPO was determined by the Compensation Committee of the Board, or the Board using historical or current transactions, comparable public company valuations, historical transactions, third-party valuations and other factors. Stock options generally have a 10-year term and vest equally over four years from the date of grant.

Stock-based compensation expense is generally recognized on a straight-line basis over the service period of the options. In 2015, 2014 and 2013, non-cash stock-based compensation expense of $1.7 million, $1.4 million and $4.3 million, respectively, was included in general and administrative expense. Stock-based compensation of approximately $229,000, $88,000 and $71,000 was included in capitalized internal costs in 2015, 2014 and 2013, respectively. Stock-based compensation expense also includes $45,803 related to the Employee Stock Purchase Plan, see Note 12-Employee Benefit Plans.

At December 29, 2015, options available for future share grants totaled 2,360,084. The intrinsic value associated with options exercised was $4.2 million and $6.0 million for the fiscal years ended December 29, 2015 and December 30, 2014, respectively.

The estimated fair value of each option granted is calculated using the Black-Scholes option-pricing model. Expected volatilities are based on the historical Company volatility, as well as volatilities from publicly traded companies operating in the Company's industry. The Company uses historical data to estimate expected employee forfeiture of stock options. The expected life of options granted is management's best estimate using recent and expected transactions. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The weighted-average assumptions used in the model were as follows:



	2015			2014			2013
Risk-free interest	1.6		%	1.7		%	1.1		%
Expected life (years)	5.0			5.0			4.3
Expected dividend yield	—			—			—
Volatility	36.8		%	36.5		%	39.7		%
Weighted-average Black-Scholes fair value per share at date of grant	$	5.04		$	10.52		$	6.04

The tables below summarize the option activity under the Plan:



	Shares		Weighted- Average Exercise Price
Outstanding—December 30, 2014	3,245,264		$	12.17
Granted	921,825		$	14.55
Forfeited	(307,318	)	$	18.76
Exercised	(792,363	)	$	8.86
Outstanding—December 29, 2015	3,067,408		$	13.08

10. Stock-Based Compensation (continued)



	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Years of Contractual Life	Aggregate Intrinsic Value⁽¹⁾ (in thousands)
Outstanding as of December 29, 2015	3,067,408	$	13.08	7.00	$	2,587
Vested and expected to vest	2,978,704	12.96		6.93	2,587
Exercisable as of December 29, 2015	1,940,770	10.93		5.72	2,586

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(1)	Aggregate intrinsic value represents the amount by which fair value of the Company's stock exceeds the exercise price of the option as of December 29, 2015.

As of December 29, 2015, there was $5.0 million of unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Stock Incentive Plan, which is expected to be recognized over 2.95 years.