Common Stock and Stock-Based Compensation

9 Months Ended

Sep. 26, 2015

Common Stock and Stock-Based Compensation

I. Common Stock and Stock-Based Compensation

Option Activity

Information related to stock options under the Equity Plan and the Non-Employee Director Plan is summarized as follows:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value (in thousands)
Outstanding at December 27, 2014		1,380,444		$	55.37
Granted		24,363			283.22
Forfeited		—
Expired		—
Exercised		(249,436	)		163.02
Outstanding at September 26, 2015		1,155,371		$	63.58		3.65	$	179,584
Exercisable at September 26, 2015		408,752		$	61.26		3.35	$	64,140
Vested and expected to vest at September 26, 2015		1,118,040		$	63.54		3.64	$	173,812

On January 1, 2015, the Company granted options to purchase an aggregate of 18,723 shares of the Company’s Class A Common Stock to senior management with a weighted average fair value of $130.43 per share.

On May 27, 2015, the Company granted options to purchase an aggregate of 5,640 shares of the Company’s Class A Common Stock to the Company’s non-employee Directors. These options have a weighted average fair value of $122.25 per share. All of the options vested immediately on the date of the grant.

On January 1, 2008, the Company granted the Chief Executive Officer a stock option to purchase 753,864 shares of its Class A Common Stock, which vests over a five-year period, commencing on January 1, 2014, at the rate of 20% per year. The exercise price is determined by multiplying $42.00 by the aggregate change in the DJ Wilshire 5000 Index from and after January 1, 2008 through the close of business on the trading date next preceding each date on which the option is exercised. The exercise price will not be less than $37.65 per share and the excess of the fair value of the Company’s Class A Common Stock cannot exceed $70 per share over the exercise price. At September 26, 2015 and September 27, 2014, 452,319 shares and 603,092 shares of the stock option remained outstanding, respectively. If the outstanding shares at September 26, 2015 were exercised on that date, the exercise price would have been $147.48 per share. If the outstanding shares at September 27, 2014 were exercised on that date, the exercise price would have been $150.19 per share.

Non-Vested Shares Activity

The following table summarizes vesting activities of shares issued under the investment share program and restricted stock awards:

	Number of Shares			Weighted Average Fair Value
Non-vested at December 27, 2014		73,098		$	115.99
Granted		14,405			195.07
Vested		(25,732	)		79.44
Forfeited		(817	)		121.36
Non-vested at September 26, 2015		60,954		$	150.01

On January 1, 2015, the Company granted 6,092 shares of restricted stock awards to certain senior managers and key employees of which 5,402 shares vest ratably over service periods of five years and 690 shares vest ratably over service periods of three years. On January 1, 2015 employees elected to purchase 8,313 shares under the investment share program. The weighted average fair value of the restricted stock awards and investment shares, which are sold to employees at discount under its investment share program, was $289.54 and $125.84 per share, respectively.

Stock-Based Compensation

Stock-based compensation expense related to share-based awards recognized in the thirteen and thirty-nine weeks ended September 26, 2015 was $1.6 million and $5.2 million, respectively, and was calculated based on awards expected to vest. Stock-based compensation expense related to share-based awards recognized in the thirteen and thirty-nine weeks ended September 27, 2014 was $1.4 million and $5.3 million, respectively, and was calculated based on awards expected to vest.