NOTE

L – SHARE-BASED COMPENSATION

Total share-based compensation during the

thirteen

-week periods ended

December 24, 2017

and

December 25, 2016

was

$99,000

and

$136,000,

respectively. Total share-based compensation during the

thirty-nine

week periods ended

December 24, 2017

and

December 25, 2016

was

$298,000

and

$482,000,

respectively. Total share-based compensation is included in general and administrative expense in our accompanying Consolidated Statements of Earnings. As of

December 24, 2017,

there was

$200,000

of unamortized compensation expense related to share-based incentive awards. We expect to recognize this expense over approximately

seven

months

which represents the weighted average remaining requisite service periods for such awards.

The Company recognizes compensation cost for unvested stock-based incentive awards on a straight-line basis over the requisite service period. Compensation cost charged to expense under all stock-based incentive awards is as follows

(in thousands):

	Thirteen weeks ended				Thirty-nine weeks ended
	December 2 4, 2017		December 25, 2016		December 24, 2017		December 25, 2016

Stock options	$	38	$	38	$	114	$	114
Restricted stock		61		98		184		368
Total compensation cost	$	99	$	136	$	298	$	482

Stock options outstanding:

There were

new share-based awards granted during the

thirty-nine

week period ended

December 24, 2017.

In connection with the Company

’s special cash dividend, paid on

January 4, 2018,

to stockholders of record as of

December 22, 2017,

the Company performed an analysis, pursuant to the anti-dilution provisions of the

2010

Plan (the

“2010

Plan”), and issued replacement options to purchase

68,498

shares at an exercise price of

$33.438

for the unvested stock options outstanding as of the record date of

December 22, 2017,

cancelling

64,384

shares at an exercise price of

$35.58

per share. Nathan’s performed its evaluation based on the closing price of its common stock on

December 20, 2017,

the day before the stock went ex-dividend, of

$83.20

per share, or

$78.20

per share excluding the dividend of

$5.00

per share.

other terms or conditions of the outstanding options were modified. The anti-dilution provisions of the original award were structured to equalize the award’s fair value before and after the modification.

During the fiscal year ended

March 29, 2015,

the Company granted options to purchase

50,000

shares at an exercise price of

$53.89

per share, all of which expire

five

years from the date of grant.

All such stock options vest ratably over a

four

-year period commencing

August 6, 2015.

In connection with the Company

’s special cash dividend, paid on

March 27, 2015,

to stockholders of record as of

March 20, 2015,

the Company performed an analysis, pursuant to the anti-dilution provisions of the

2010

Plan, and issued replacement options to purchase

75,745

shares at an exercise price of

$35.58

for the unvested stock options outstanding as of

March 29, 2015,

canceling

50,000

shares at an exercise price of

$53.89.

Nathan’s performed its evaluation based on the closing price of its common stock on

March 27, 2015

$73.56

per share, or

$48.56

per share excluding the dividend of

$25.00

per share.

Transactions with respect to stock options for the

thirty-nine

weeks ended

December 24, 2017

are as follows:

				Weighted-		Weighted-		Aggregate
				Average		Average		Intrinsic
				Exercise		Remaining		Value
	Shares			Price		Contractual Life		(in thousands)

Options outstanding at the beginning of the fiscal year		75,745		$	35.58		2.36	$	1,899

Granted		-			-		-		-

Replacement options issued ( A)		68,498		$	33.438		1.61	$	3,093

Expired		-			-		-		-

Cancellation of outstanding options (A)		(64,384	)	$	35.58		1.61	$	3,093

Exercised		(11,361	)	$	35.58		-		379

Options Outstanding at December 24, 2017 ( A)		68,498		$	33.438		1.61	$	3,093

Options exercisable at December 24, 2017 ( A)		48,348		$	33.438		1.61	$	2,183

A-

Represents the effects on outstanding options after giving effect to the replacement options issued in connection with the Company

’s special dividend to shareholders of record on

December 22, 2017.

Restricted stock:

Transactions with respect to restricted stock for the

thirty-nine

weeks ended

December 24, 2017

are as follows:

	Shares			Weighted- Average Grant-date Fair value Per share
Unvested restricted stock at March 26, 2017		10,000		$	49.80

Granted		-			-
Vested		(5,000	)	$	49.80

Unvested restricted stock at December 24, 2017		5,000		$	49.80