EQUITY-BASED COMPENSATION

A summary of equity-based compensation expense recognized during fiscal 2017, 2016 and 2015 is as follows:



	2017		2016		2015
Unit appreciation rights	$	—	$	—	$	11,762
Restricted Class B units	—		—		605
Stock options	3,474		4,262		4,314
Performance stock units	1,869		1,092		—
Restricted stock units	280		—		—
Equity-based compensation expense	$	5,623	$	5,354	$	16,681

Total income tax benefit recognized related to equity-based compensation	$	198	$	168	$	482

Amounts are included in general and administrative expense and labor and related expenses on the Consolidated Statements of Income (Loss). We capitalized $109 and $139 of equity-based compensation in fiscal 2017 and 2016, respectively. No amounts were capitalized in fiscal 2015.

Unit Appreciation Rights

Prior to the IPO, we maintained a Unit Appreciation Rights Plan (the "UAR Plan"), effective in fiscal year 2012, and as amended, whereby we had the authority to grant up to 31,303 unit appreciation rights ("UARs") to employees. The UARs granted were subject to continued employment and were only exercisable upon a qualifying transaction. Our IPO constituted a qualifying transaction under the terms of the UAR Plan, and as a result 339,306 shares of Class A common stock were issued upon the settlement of the 22,554 outstanding UARs, net of employee withholding taxes. We recognized compensation expense of $11,762 during fiscal 2015 upon settlement of the outstanding UARs.

There were no UARs outstanding as of December 27, 2017 or December 28, 2016. No compensation expense was recognized during fiscal 2017 and 2016.

Restricted Class B Units

Prior to the IPO, we granted restricted Class B units to certain of our executive officers. These awards were to vest in equal installments over periods ranging from three to five years. If not already fully vested, these units would fully vest (i) upon the occurrence of a change in control event or (ii) upon the occurrence of an initial public offering. The IPO constituted a transaction under the terms of the restricted Class B unit award agreements that resulted in the accelerated vesting of all then-outstanding awards, and we recognized $605 of equity-based compensation expense upon the vesting of these awards during fiscal 2015.

There were no restricted Class B units outstanding as of December 27, 2017 or December 28, 2016. No compensation expense was recorded during fiscal 2017 and 2016.

Stock Options

In January 2015, we adopted the 2015 Incentive Award Plan (the "2015 Plan") under which we may grant up to 5,865,522 stock options and other equity-based awards to employees, directors and officers. The stock options granted generally vest equally over periods ranging from one to five years. We do not use cash to settle any of our equity-based awards, and we issue new shares of Class A common stock upon the exercise of stock options.

The fair value of stock option awards was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:



	2017		2016		2015
Expected term (years)⁽¹⁾	7.5		5.5		7.5
Expected volatility⁽²⁾	44.5	%	50.7	%	35.1	%
Risk-free interest rate⁽³⁾	2.1	%	1.5	%	1.6	%
Dividend yield⁽⁴⁾	—	%	—	%	—	%


(1)	Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.


(2)	Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.


(3)	The risk-free rate rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.


(4)	We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.

A summary of stock option activity for fiscal years 2017, 2016 and 2015 is as follows:



		Stock Options		Weighted Average Exercise Price			Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life (Years)
Outstanding as of December 31, 2014		—		$	—
	Granted	2,622,281		21.00
	Exercised	—		—
	Forfeited	(47,300	)	(21.00		)
	Expired	—		—
Outstanding as of December 30, 2015		2,574,981		$	21.00
	Granted	16,931		34.74
	Exercised	(160,230	)	21.00
	Forfeited	(66,960	)	(21.00		)
	Expired	—		—
Outstanding as of December 28, 2016		2,364,722		$	21.10
	Granted	5,150		38.91
	Exercised	(359,011	)	21.13
	Forfeited	(291,520	)	(21.00		)
	Expired	—		—
Outstanding as of December 27, 2017		1,719,341		$	21.16		$	39,851	7.1
Options vested and exercisable as of December 27, 2017		543,246		$	21.34		$	12,493	7.1
Options expected to vest as of December 27, 2017		1,098,577		$	21.08		$	25,549	7.1

As of December 27, 2017, total unrecognized compensation expense related to unvested stock options was $7,098, which is expected to be recognized over a weighted-average period of 2.1 years. The total intrinsic value of stock options exercised during fiscal 2017 and 2016 was $8,333 and $2,536, respectively. No stock options were exercised during fiscal 2015. Cash received from stock option exercises was $7,585 for fiscal 2017.

A summary of unvested stock option activity for fiscal years 2017, 2016 and 2015 is as follows:



		Stock Options		Weighted Average Grant-Date Fair Value
Unvested as of December 31, 2014		—		$	—
	Vested	—		—
	Granted	2,622,281		8.53
	Forfeited	(47,300	)	8.59
Unvested as of December 30, 2015		2,574,981		$	8.53
	Vested	(562,296	)	8.32
	Granted	16,931		16.32
	Forfeited	(65,365	)	8.59
Unvested as of December 28, 2016		1,964,251		$	8.66
	Vested	(503,686	)	8.85
	Granted	5,150		19.42
	Forfeited	(289,620	)	8.59
Unvested as of December 27, 2017		1,176,095		$	8.64

The total fair value of stock options vested during fiscal 2017 and 2016 was $4,458 and $4,678, respectively. No stock options vested during fiscal 2015.

The following table summarizes information about stock options outstanding and exercisable as December 27, 2017:



	Options Outstanding				Options Exercisable
	Number Outstanding at December 27, 2017	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number Exercisable at December 27, 2017	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price
Exercise Price	Number Outstanding at December 27, 2017	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number Exercisable at December 27, 2017	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price
$21.00	1,700,665	7.1	$	21.00	529,720	7.1	$	21.00
$34.62	12,418	8.4	$	34.62	12,418	8.4	$	34.62
$36.41	1,108	8.9	$	36.41	1,108	8.9	$	36.41
$38.91	5,150	9.5	$	38.91	—	—	$	—

Performance Stock Units

Under the 2015 Plan, we may grant performance stock units and other types of performance-based equity awards that vest based on the outcome of certain performance criteria that are established and approved by the Compensation Committee of the Board of Directors. The actual number of equity awards earned is based on the level of performance achieved over a predetermined performance period, relative to established financial goals, none of which are considered market conditions.

For performance stock units granted during fiscal 2017, the amount of awards that can be earned range from 0% to 125% of the number of performance stock units granted, based on the achievement of approved financial goals over a one-year performance period. In addition to the performance conditions, performance stock units are also subject to a requisite service period and the awards will vest ratably over three years. The fair value of performance stock units is determined based on the closing market price of our Class A common stock on the date of grant. Compensation expense related to the performance stock units is recognized using a graded-vesting attribution method over the vesting period based on the most probable outcome of the performance conditions.

A summary of performance stock unit activity for fiscal years 2017 and 2016 is as follows:



		Performance Stock Units		Weighted Average Grant Date Fair Value
Outstanding as of December 30, 2015		—		$	—
	Granted	63,600		38.41
	Performance achievement⁽¹⁾	—		—
	Vested	—		—
	Forfeited	(2,000	)	38.43
	Expired	—		—
Outstanding as of December 28, 2016		61,600		$	38.41
	Granted	87,596		37.90
	Performance achievement⁽¹⁾	9,545		38.40
	Vested	(22,703	)	38.40
	Forfeited	(11,196	)	38.28
	Expired	—		—
Outstanding as of December 27, 2017		124,842		$	38.06


(1)	Represents incremental awards earned based on the achievement of performance conditions.

No performance stock units were granted in fiscal 2015. As of December 27, 2017, there were 124,842 performance stock units outstanding, of which none were vested. As of December 27, 2017, total unrecognized compensation expense related to unvested performance stock units was $2,385, which is expected to be recognized over a weighted-average period of 1.6 years.

Restricted Stock Units

Under the 2015 Plan, we may grant restricted stock units to employees, directors and officers. The restricted stock units granted generally vest equally over periods ranging from one to five years. The fair value of restricted stock units is determined based on the closing market price of our Class A common stock on the date of grant. Compensation expense related to the restricted stock units is recognized using a straight-line attribution method over the vesting period.

In fiscal 2017, 44,476 restricted stock units were granted with a weighted average grant date fair value of $38.98. As of December 27, 2017, there were 44,476 restricted stock units outstanding, of which none were vested. No restricted stock units were granted in fiscal 2016 and 2015. As of December 27, 2017, total unrecognized compensation expense related to unvested restricted stock units was $1,453, which is expected to be recognized over a weighted-average period of 2.5 years.