10. Stock-Based Employee Compensation

We have had several long-term incentive compensation plans, including the Amended and Restated Cosi, Inc. Long-Term Incentive Plan, that provided for the granting of incentive and nonqualified stock options to employees. On May 2, 2005, the Cosi, Inc. 2005 Omnibus Long-Term Incentive Plan (the "Omnibus Plan") went into effect, superseding all prior long-term incentive plans. The Omnibus Plan provides for the issuance of restricted stock, restricted stock units, incentive and nonqualified stock options, and any other stock awards that may be payable in shares, cash, other securities, and any other form of property as may be determined by the Compensation Committee of our Board of Directors. The purpose of this plan is to attract and retain qualified individuals and to align their interest with those of stockholders by providing certain employees of Cosi, Inc. and its affiliates with the opportunity to receive stock-based and other long-term incentive grants. The terms and conditions of stock-based awards under the plans are determined by the Compensation Committee of the Board of Directors. The grants are issued at fair market value and generally vest over a period of four or five years. We currently account for stock option grants in accordance with ASC 718-10-25 Compensation—Stock Compensation.

When the Omnibus Plan went into effect, 3.7 million authorized but unissued common shares that were reserved under the Amended and Restated Cosi, Inc. Long Term Incentive Plan continued to be reserved for issuance under the Omnibus Plan. No additional awards will be granted under any of the prior long-term incentive plans. During fiscal 2012, an Amendment to the 2005 Omnibus Long-Term Incentive Plan was approved which increased the number of shares available for issuance under the Plan by 1.5 million.

As of December 31, 2012, approximately 3.6 million shares of common stock, in the aggregate, were reserved for issuance under the Omnibus Plan and for outstanding grants under the prior long-term incentive plans.

A summary of stock-based compensation follows:

	Fiscal Year

	2012		2011		2010
	(in thousands)
Stock option compensation expense	$	—	$	—	$	1
Restricted stock compensation expense, net of forfeitures		399		371		606

Total non-cash, stock-based compensation expense, net of forfeitures	$	399	$	371	$	607

As of December 31, 2012, all compensation expenses related to stock options granted under the Company's various incentive plans have been recognized in full. In addition, as of December 31, 2012, there were approximately $0.6 million of total unrecognized compensation expense related to restricted stock shares granted under the Omnibus Plan. The expense related to restricted stock grants will be recognized on a straight-line basis from the date of each grant through fiscal 2016 and is recorded in general and administrative expenses in our consolidated statements of operations.

A summary of option activity for fiscal years 2012, 2011, and 2010 follows:

			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value

					(in years)		(in thousands)
Outstanding as of December 28, 2009	662,534		$	9.96		1.3	$	—
Granted	—			—
Exercised	—			—
Cancelled/Expired	(119,557	)	$	11.20				—

Outstanding as of December 27, 2010	542,977		$	9.70		1.6	$	—
Granted	—			—
Exercised	—			—
Cancelled/Expired	(378,695	)	$	11.74				—

Outstanding as of January 2, 2012	164,282		$	5.00		2.5	$	—
Granted	—			—
Exercised	—			—
Cancelled/Expired	(10,073	)	$	3.47				—

Outstanding as of December 31, 2012	154,209		$	5.10		1.7	$	—
Exercisable as of December 31, 2012	154,209		$	5.10		1.7	$	—

No stock options were exercised during any of the fiscal years presented and all outstanding options were fully vested as of the end of fiscal 2010. The aggregate fair value of options vested during fiscal 2010 was $0.03 million. As of the last day of fiscal 2012, the outstanding stock options had no intrinsic value as they were all out-of-the-money.

The following table summarizes information about stock options outstanding at December 31, 2012:

	Options Outstanding						Options Exercisable

Range of Exercise Prices	Number of Options Outstanding		Weighted Average Remaining Contractual Life in Years		Weighted Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
$2.25 - $4.62		10,021		1.5	$	4.40		10,021	$	4.40
$4.63 - $4.72		64,978		1.6		4.70		64,978		4.70
$4.73 - $5.18		15,611		1.6		4.90		15,611		4.90
$5.19 - $5.59		28,135		1.8		5.20		28,135		5.20
$5.60 - $6.94		35,464		1.8		6.00		35,464		6.00

		154,209		1.7	$	5.10		154,209	$	5.10

We did not grant any shares of restricted stock to employees in fiscal 2012. During the same year, we converted 365,000 previously issues restricted stock units into restricted stock shares. During fiscal 2011, pursuant to the 2005 Plan and in accordance with the terms and conditions prescribed by the Compensation Committee of our Board of Directors, we granted and issued 1,198,000 restricted stock shares and 100,000 stock units to key employees. During fiscal 2010, we granted and issued 238,250 restricted stock shares and 200,000 restricted stock units to key employees. The vesting of the shares and stock units granted during fiscal years 2011 and 2010 occurs as follows, except where provided differently in the following paragraphs: (i) 20% of the stock shares and stock units vested on the grant date, and (ii) an additional 20% of the stock shares and stock units will vest on each anniversary of the grant date provided that at each such date the employee continues to be employed by the Company. The value of the shares and the stock units for the grants made during fiscal years 2011 and 2010, based on the closing price of our common stock on the date of the grants, was approximately $0.9 million and $0.4 million, respectively. During fiscal years 2012, 2011 and 2010, previously issued shares and units of restricted common stock of 53,850, 242,400 and 21,950, respectively, were forfeited. The value of the forfeited shares and units of restricted common stock, based on the closing price of our common stock on the dates of the grants, was approximately $0.05 million, $0.3 million and $0.04 million in fiscal years 2012, 2011 and 2010, respectively.

Included in the restricted stock activity table below are 172,410, 128,874, and 152,440, shares issued during fiscal years 2012, 2011, and 2010, respectively, to members of the Board of Directors pursuant to the Cosi Non-Employee Director Stock Incentive Plan and the Omnibus Plan. These shares had an aggregate value of approximately $0.1 million at the time of issuance in all three fiscal years and vested upon issuance.

The following tables summarize the Company's restricted stock activity:

			Weighted Average Grant-Date Fair Value

Non-vested at December 28, 2009	87,200		$	5.35

Granted	390,690			0.87
Vested	250,890			2.04
Forfeited / Canceled	(21,950	)		1.57

Non-vested at December 27, 2010	205,050		$	1.27

Granted	1,326,874			0.80
Vested	201,124			1.24
Forfeited / Canceled	(42,400	)		1.89

Non-vested at Janaury 2, 2012	1,288,400		$	0.77

Granted	172,410			0.87
Vested	321,360			0.89
Forfeited / Canceled	(53,850	)		1.17

Non-vested at December 31, 2012	1,085,600		$	0.74

			Weighted Average Grant-Date Fair Value

Non-vested at December 28, 2009	110,000			3.24

Granted	200,000			0.91
Vested	95,000			2.26
Forfeited	—			—

Non-vested at December 27, 2010	215,000		$	1.51

Granted	100,000			1.45
Vested	115,000			2.12
Forfeited	(200,000	)		1.13

Non-vested at January 2, 2012	—		$	—

Granted	—			—
Vested	—			—
Forfeited	—			—

Non-vested at December 31, 2012	—		$	—