Stockholders’ Equity

We have 1.6 million shares of common stock reserved for issuance under the current Equity Incentive Plan (Plan) for our employees, officers, and directors. The Plan has 641,933 shares available for grant as of December 25, 2016.


(a)	Stock Options

The exercise price for stock options issued under the Plan is to be not less than the fair market value on the date of grant with respect to incentive and nonqualified stock options. Incentive stock options become exercisable in four equal installments from the date of the grant and have a contractual life of seven years. Nonqualified stock options issued pursuant to the Plan have a four-year vesting period and have a contractual life of seven years. Incentive stock options may be granted under this plan until March 12, 2022. We issue new shares of common stock upon exercise of stock options. Option activity is summarized for the year ended December 25, 2016 as follows:



	Number of shares		Weighted average exercise price		Average remaining contractual life (years)	Aggregate Intrinsic Value
Outstanding, December 27, 2015	131,248		$	113.12	4.0	$	7,051
Granted	42,889		152.03
Exercised	(22,033	)	65.79
Forfeited	(5,280	)	152.01
Expired	(1,200	)	167.17
Outstanding, December 25, 2016	145,624		$	129.89	4.1	$	5,076
Exercisable, December 25, 2016	95,878		114.54		3.4	4,692

The aggregate intrinsic value in the table above is before applicable income taxes, based on our closing stock price of $160.10 as of the last business day of the year ended December 25, 2016, which would have been received by the optionees had all options been exercised on that date. As of December 25, 2016, total unrecognized stock-based compensation expense related to nonvested stock options was approximately $2,256, which is expected to be recognized over a weighted average period of approximately 2.3 years. During 2016, 2015, and 2014, the total intrinsic value of stock options exercised was $1,863, $7,021, and $3,029, respectively. During 2016, 2015, and 2014, the total fair value of options vested was $1,521, $1,361, and $1,138, respectively. During 2016, 2015, and 2014, the weighted average grant date fair value of options granted was $46.80, $59.11, and $50.23, respectively.

The following table summarizes our stock options outstanding at December 25, 2016:



				Options outstanding				Options exercisable
Range				Shares	Average remaining contractual life (years)	Weighted average exercise price		Shares	Weighted average exercise price
$	53.75	—	53.75	13,466	1.0	$	53.75	13,466	$	53.75
87.53		—	94.42	42,159	2.6	90.06		42,159	90.06
147.52		—	147.55	55,031	5.2	147.54		24,437	147.53
169.15		—	182.97	34,968	5.3	179.46		15,816	180.59
				145,624				95,878


(b)	Restricted Stock Units

Restricted stock units are granted annually under the Plan at the discretion of the Compensation Committee of the Board of Directors.

In 2016, 2015, and 2014, we granted restricted stock units subject to three-year cliff vesting and a cumulative three-year earnings target. The number of units which vest at the end of the three-year period is based on performance against the target. These restricted stock units are subject to forfeiture if they have not vested at the end of the three-year period. Stock-based compensation is recognized for the number of units expected to vest at the end of the period and is expensed beginning on the grant date through the end of the performance period.

For each grant, restricted stock units meeting the performance criteria will vest as of the end of our fiscal year. The distribution of vested restricted stock units as common stock typically occurs in March of the following year. The common stock is issued to participants net of the number of shares needed for the required minimum employee withholding taxes. We issue new shares of common stock upon the disbursement of restricted stock units. Restricted stock units are contingently issuable shares, and the activity for fiscal 2016 is as follows:



	Number of shares		Weighted average grant date fair value
Outstanding, December 27, 2015	190,120		$	161.06

Granted	130,881		148.31
Vested	(95,068	)	145.66
Cancelled	(23,886	)	161.24
Outstanding, December 25, 2016	202,047		$	160.03

As of December 25, 2016, the stock-based compensation expense related to nonvested awards not yet recognized was $929, which is expected to be recognized over a weighted average period of 1.8 years. During fiscal years 2016 and 2015 the total grant date fair value of shares vested was $13,848 and $14,157, respectively. The weighted average grant date fair value of restricted stock units granted during 2016, 2015, and 2014 was $148.31, $180.60, and $147.46, respectively. During 2016, 2015, and 2014, we recognized $(1,953), $11,454, and $12,474 respectively, of stock-based compensation expense related to restricted stock units. The twelve-month period ended December 25, 2016 included reversals of $(3,222) of previously recognized expenses as we revised our estimate of financial performance.


(c)	Employee Stock Purchase Plan

We have reserved 600,000 shares of common stock for issuance under the ESPP. The ESPP is available to substantially all employees subject to employment eligibility requirements. Participants may purchase our common stock at 85% of the beginning or ending closing price, whichever is lower, for each six-month period ending in May and November. During 2016, 2015, and 2014, we issued 24,619, 18,510, and 17,040 shares, respectively, of common stock. As of December 25, 2016, we had 161,139 shares available for future issuance under the ESPP.