Stock-Based Compensation Arrangements:

2014 Equity Incentive Plan

The 2014 Equity Incentive Plan provides Parent authority to grant equity incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards or performance compensation awards to certain directors, officers or employees of the Company.

During 2018, 2017 and 2016, Parent granted options to purchase 112,769 shares, 123,603 shares, and 101,110 shares, respectively, of its common stock to certain directors, officers and employees of the Company. The options are subject to certain service and performance based vesting criteria, and were split evenly between Tranches A, B and C, which have different vesting requirements. The options in Tranche A are service based, and vest and become exercisable in equal installments on each of the first five anniversaries of the respective grant dates. The Black-Scholes model was used to estimate the fair value of Tranche A stock options. Tranche B and Tranche C options are performance based and vest and become exercisable when certain return thresholds are achieved. The Monte Carlo simulation model was used to estimate the fair value of Tranche B and Tranche C stock options. Unvested Tranche A options are also subject to accelerated vesting and exercisability on the first anniversary of a change in control of Parent or within 12 months following such a change in control. Tranche B and C options may also vest and become exercisable if applicable hurdles are achieved in connection with an initial public offering. Compensation costs related to options in the Parent were recorded by the Company.

The weighted-average fair value of the options granted in 2018, 2017 and 2016 was estimated at $4.93, $1.93 and $0.98 per option, $3.71, $2.28 and $1.28 per option and $2.99, $1.68 and $0.87 per option, respectively, for Tranches A, B and C, respectively, on the date of grant based on the following assumptions:



	Fiscal Year
	2018		2017				2016
	February 2018		August 2017		February 2017		February 2016

Dividend yield	—	%	—	%	—	%	—	%
Volatility for Tranche A	33	%	35	%	34	%	30	%
Volatility for Tranches B and C	35	%	34	%	33	%	30	%
Risk-free interest rate for Tranche A	2.70	%	1.39	%	1.38	%	1.09	%
Risk-free interest rate for Tranches B and C	2.42	%	1.28	%	1.16	%	0.99	%
Expected life - years	3.7		1.7		2.2		3.6

A summary of the option activity under the equity incentive plan as of December 30, 2018 and the activity for 2018 is presented below:



	Stock Options		Weighted Average Exercise Price ⁽¹⁾	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
			($ per share)		($ in thousands)
Outstanding stock options, December 31, 2017	2,349,288		$9.00
Options Granted	112,769		$13.73
Options Exercised	(7,745	)	$9.96
Options Forfeited	(466,981	)	$10.53
Outstanding stock options, December 30, 2018	1,987,331		$8.87	5.6	$	—
Stock options expected to vest, December 30, 2018	1,360,557		$9.08	5.7	$	—
Exercisable stock options, December 30, 2018	475,603		$8.21	5.2	$	310

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⁽¹⁾ The weighted average exercise price reflects the original grant date fair value per option as adjusted for the dividend payment made in August 2015.

As of December 30, 2018, we had $0.6 million of total unrecognized share based compensation expense related to unvested options, net of expected forfeitures, which is expected to be amortized over the remaining weighted average period of 3.1 years.

In January 2019 and February 2019, the Parent granted additional options to purchase 314,051 shares and 110,994 shares, respectively, of its common stock to certain officers and employees of the Company.

A summary of stock based compensation costs recognized and capitalized is presented below:



	Fiscal Year
	December 30, 2018			December 31, 2017			January 1, 2017
	(in thousands)
Stock-based compensation costs	$	337		$	620		$	702
Portion capitalized as property and equipment ⁽¹⁾	(13		)	(14		)	(13		)
Stock-based compensation expense recognized	$	324		$	606		$	689
Tax benefit recognized from stock-based compensation awards	$	—		$	—		$	4

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(1)We capitalize the portion of stock-based compensation costs related to our design, construction, facilities and legal departments that are directly attributable to our venue development projects, such as the design and construction of a new venue and the remodeling and expansion of our existing venues. Capitalized stock-based compensation costs attributable to our venue development projects are included in “Property and equipment, net” in the Consolidated Balance Sheets.