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6. Stock-Based Compensation
The following table presents information related to stock-based compensation (in thousands):
|
|
|
Thirteen
Weeks Ended
October 2, 2012 |
|
Thirteen
Weeks Ended
September 27, 2011 |
|
Thirty-Nine
Weeks Ended
October 2, 2012 |
|
Thirty-Nine
Weeks Ended
September 27, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Labor expenses |
|
$ |
932 |
|
$ |
993 |
|
$ |
2,765 |
|
$ |
3,072 |
|
|
Other operating costs and expenses |
|
47 |
|
44 |
|
142 |
|
135 |
|
|
General and administrative expenses |
|
1,174 |
|
1,814 |
|
5,520 |
|
5,590 |
|
|
Total stock-based compensation |
|
2,153 |
|
2,851 |
|
8,427 |
|
8,797 |
|
|
Income tax benefit |
|
823 |
|
1,091 |
|
3,223 |
|
3,365 |
|
|
Total stock-based compensation, net of taxes |
|
$ |
1,330 |
|
$ |
1,760 |
|
$ |
5,204 |
|
$ |
5,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized stock-based compensation (1) |
|
56 |
|
76 |
|
206 |
|
206 |
|
(1) It is our policy to capitalize the portion of stock-based compensation costs for our internal development and construction, legal, and facilities departments that relates to capitalizable activities such as the design and construction of new restaurants, remodeling existing locations, lease, intellectual property and liquor license acquisition activities and equipment installation. Capitalized stock-based compensation is included in property and equipment, net and other assets on the consolidated balance sheets.
Stock Options
The weighted average fair value at the grant date for options issued during the third quarter of fiscal 2012 and 2011 was $10.27 and $11.88 per option, respectively. The fair value of options at the grant date was estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for the third quarter of fiscal 2012 and 2011, respectively: (a) an expected option term of 6.1 and 6.0 years, (b) expected stock price volatility of 37.3% and 38.5%, (c) a risk-free interest rate of 1.1% and 1.4%, and (d) a dividend yield on our stock of 1.4% and 0.0%.
Stock option activity during the thirty-nine weeks ended October 2, 2012 was as follows:
|
|
|
Shares |
|
Weighted
Average
Exercise Price |
|
Weighted
Average
Remaining
Contractual
Term |
|
Aggregate
Intrinsic Value |
|
|
|
|
(In thousands) |
|
(Per share) |
|
(In years) |
|
(In thousands) |
|
|
Outstanding at January 3, 2012 |
|
8,827 |
|
$ |
23.51 |
|
4.8 |
|
$ |
58,857 |
|
|
Granted |
|
485 |
|
$ |
29.32 |
|
|
|
|
|
|
Exercised |
|
(1,210 |
) |
$ |
22.56 |
|
|
|
|
|
|
Forfeited or cancelled |
|
(165 |
) |
$ |
22.73 |
|
|
|
|
|
|
Outstanding at October 2, 2012 |
|
7,937 |
|
$ |
24.03 |
|
4.4 |
|
$ |
91,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at October 2, 2012 |
|
4,281 |
|
$ |
27.35 |
|
3.4 |
|
$ |
35,214 |
|
The total intrinsic value of options exercised during the thirteen and thirty-nine weeks ended October 2, 2012 was $3.4 million and $11.6 million, respectively. The total intrinsic value of options exercised during the thirteen and thirty-nine weeks ended September 27, 2011 was $0.9 million and $4.6 million, respectively. As of October 2, 2012, the total unrecognized stock-based compensation expense related to unvested stock options was $16.8 million, which we expect to recognize over a weighted average period of approximately 2.3 years.
Restricted Shares and Restricted Share Units
Restricted share and restricted share unit activity during the thirty-nine weeks ended October 2, 2012 was as follows:
|
|
|
Shares |
|
Weighted
Average
Fair Value |
|
|
|
|
(In thousands) |
|
(Per share) |
|
|
|
|
|
|
|
|
|
Outstanding at January 3, 2012 |
|
826 |
|
$ |
20.40 |
|
|
Granted |
|
523 |
|
30.68 |
|
|
Vested |
|
(175 |
) |
13.98 |
|
|
Forfeited |
|
(13 |
) |
23.43 |
|
|
Outstanding at October 2, 2012 |
|
1,161 |
|
$ |
25.97 |
|
Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant. The weighted average fair value at the grant date for restricted shares and restricted share units issued during the third quarter of fiscal 2012 and fiscal 2011 was $34.00 and $26.98, respectively. The fair value of shares that vested during thirty-nine weeks ended October 2, 2012 was $2.4 million. No shares vested during the thirteen weeks ended October 2, 2012. The fair value of shares that vested during the thirteen and thirty-nine weeks ended September 27, 2011 was $0.3 million and $1.2 million, respectively. As of October 2, 2012, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $21.4 million, which we expect to recognize over a weighted average period of approximately 3.7 years.
|