Stockholders' Equity

9 Months Ended

Oct. 01, 2013

Stockholders' Equity

Stockholders' Equity

5. Stockholders’ Equity

On July 23, 2012, our Board of Directors (“Board”) approved the initiation of a cash dividend to our stockholders which is subject to quarterly Board approval.  A cash dividend of $0.12 per common share was declared during the third quarter of fiscal 2012 and in each fiscal quarter since then through the second quarter of 2013.  On July 22, 2013, our Board increased the dividend to $0.14 per common share for the third quarter of fiscal 2013, equating to a 17% increase.  On October 21, 2013, our Board declared a dividend of $0.14 per common share for the fourth quarter of fiscal 2013.  There can be no assurance that dividends will be declared in the future or that the Board will approve further increases in dividend levels.

On July 22, 2013, our Board increased the authorization to repurchase our common stock by 7.5 million shares to 48.5 million shares.  Under this and all previous authorizations, we have cumulatively repurchased 37.8 million shares at a total cost of $967.3 million through October 1, 2013, including 2.1 million shares of our common stock at a cost of $90.2 million during the third quarter of fiscal 2013.  Our share repurchase authorization does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time.

On November 6, 2012, our Board approved the adoption of a trading plan under Rule 10b5-1 (“10b5-1 Plan”) of the Securities Exchange Act of 1934 (the “Act”), which was effective from December 6, 2012 through July 3, 2013.  This 10b5-1 Plan terminated on July 3, 2013 in accordance with its terms.  On May 29, 2013, our Board approved the adoption of another 10b5-1 Plan, which became effective July 5, 2013 and will terminate December 31, 2013.  On October 21, 2013, our Board approved the terms of an additional 10b5-1 Plan, which will be effective from January 2, 2014 through July 1, 2014.

On July 22, 2013, our Board approved the terms of a share repurchase plan (“10b-18 Plan”) under which we were authorized to repurchase shares of our common stock in open market transactions in accordance with Rule 10b-18 of the Act, effective from July 29, 2013 through August 15, 2013.  This 10b-18 Plan terminated on August 15, 2013 in accordance with its terms.  On October 21, 2013, our Board approved the terms of another 10b-18 Plan under which we are authorized to repurchase shares of our common stock in open market transactions in accordance with Rule 10b-18 of the Act, effective from October 28, 2013 through November 12, 2013.

The timing and number of shares repurchased pursuant to the share repurchase authorization are subject to a number of factors, including legal constraints and financial covenants under our Facility that limit share repurchases based on a defined ratio.  See Note 3 for further discussion of our long-term debt.  Shares may be repurchased in the open market or through privately negotiated transactions at times and prices considered appropriate by us.  Purchases in the open market are made in compliance with Rule 10b-18 of the Act.  We make the determination to repurchase shares based on several factors, including an evaluation of current and future capital needs associated with new restaurant development, current and forecasted cash flows, including dividend payments, a review of our capital structure and cost of capital, our share price and current market conditions.  Our objectives with regard to share repurchases are to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth.