Stock-Based Compensation (Tables)

6 Months Ended

Jul. 02, 2024

Stock-Based Compensation Recognized within Our Consolidated Financial Statements

The following table presents the stock-based compensation recognized within our consolidated financial statements (in thousands):

	For the Thirteen Weeks Ended				For the Twenty-Six Weeks Ended
	July 2, 2024		July 4, 2023		July 2, 2024		July 4, 2023
Labor and benefits	$	529	$	410	$	1,037	$	1,276
General and administrative	$	2,237	$	2,368	$	4,206	$	4,144
Capitalized (1)	$	79	$	95	$	163	$	189
Total stock-based compensation	$	2,845	$	2,873	$	5,406	$	5,609

(1)Capitalized stock-based compensation relates to our restaurant development personnel and is included in “Property and equipment, net” on the Consolidated Balance Sheets.

Black-Scholes Option-Pricing Model, Weighted Average Assumptions Used to Estimate the Fair Value of Each Stock Option

The fair value of each stock option was estimated on the grant date using the Black‑Scholes option-pricing model with the following weighted average assumptions:

	For the Twenty-Six Weeks Ended
	July 2, 2024			July 4, 2023
Volatility		67.5	%		66.9	%
Risk-free interest rate		3.9	%		3.5	%
Expected life (years)	5			5
Expected dividend yield		—	%		—	%
Fair value of options granted	$	18.86		$	18.29

Stock Option Activity

Under our stock-based compensation plan, the exercise price of a stock option is required to equal or exceed the fair value of our common stock at market close on the option grant date or the last trading day prior to the date of grant when grants take place on a day when the market is closed. The following table presents stock option activity:

	Options Outstanding					Options Exercisable
	Shares (in thousands)			Weighted Average Exercise Price		Shares (in thousands)		Weighted Average Exercise Price
Outstanding at January 2, 2024		867		$	39.70		648	$	41.65
Granted		121			31.86
Exercised		(5	)		31.54
Forfeited		(6	)		37.69
Outstanding at July 2, 2024		977		$	38.79		727	$	41.03

Service-Based Restricted Stock Units

Restricted Stock Unit Activity

The following table presents service-based restricted stock unit activity:

	Shares (in thousands)			Weighted Average Fair Value
Outstanding at January 2, 2024		822		$	31.46
Granted		199			32.13
Released		(165	)		38.61
Forfeited		(49	)		29.89
Outstanding at July 2, 2024		807		$	30.25

Market-Based and Performance-Based Restricted Stock Units

Restricted Stock Unit Activity

The following table presents market-based and performance-based restricted stock unit activity:

	Shares (in thousands)			Weighted Average Fair Value
Outstanding at January 2, 2024		128		$	36.24
Awarded		79			39.09
Released		(65	)		46.91
Forfeited		(1	)		38.23
Outstanding at July 2, 2024		141		$	32.87

Monte Carlo Simulation Model, Weighted Average Assumptions Used to Estimate the Fair Value of Market-Based RSUs

The fair value of market-based RSUs was estimated on the grant date using the Monte Carlo simulation model with the following weighted average assumptions:

	For the Twenty-Six Weeks Ended
	July 2, 2024			July 4, 2023
Volatility		49.8	%	n/a
Risk-free interest rate		3.8	%	n/a
Expected life (years)	3			n/a
Expected dividend yield		—	%	n/a
Fair value of market-based awards granted	$	34.79		n/a