Stock Based Compensation

6 Months Ended

Jun. 26, 2011

Stock Based Compensation [Abstract]

Stock Based Compensation

4. Stock Based Compensation

2006 Plan

Stock option activity for the twenty-six weeks ended June 26, 2011 is summarized as follows:

	Number of			Weighted Average
	Shares			Exercise Price
Outstanding at December 26, 2010		1,414,203		$	1.44
Exercised		(61,732	)	$	1.30
Granted		—			—
Forfeited		—			—
Outstanding at June 26, 2011		1,352,471		$	1.45
Exercisable at June 26, 2011		1,352,471		$	1.45

At June 26, 2011, the weighted-average remaining contractual term of options outstanding was approximately 5.8 years and all of the options were exercisable. Aggregate intrinsic value is calculated as the difference between the Company’s closing price at the end of the fiscal quarter and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders had they all exercised such options on the fiscal quarter end date. The aggregate intrinsic value for outstanding and exercisable options at June 26, 2011 was $30.4 million.

The total weighted-average grant-date fair value of all options granted in 2009 and prior was $0.52, and was estimated at the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for these options: weighted-average risk-free interest rate of 4.49%, no expected dividend yield, weighted-average volatility of 32.2%, based upon competitors within the industry, and an expected option life of five years. In October 2010 in connection with the IPO, the Company’s board of directors determined, pursuant to the exercise of its discretion in accordance with the Bravo Development, Inc. Option Plan (the “2006 Plan”), that upon the consummation of the IPO (i) each then outstanding option award under the 2006 Plan would be deemed to have vested in a percentage equal to the greater of 80.0% or the percentage of the option award already vested as of that date and, (ii) each then outstanding option award would be deemed 80.0% exercisable. As a result of such determination, all of the options were subject to modification accounting and therefore were revalued in their entirety at the date of the modification. The Company recorded all of the stock compensation expense related to the 2006 Plan in the thirteen weeks ended December 26, 2010 and no additional stock compensation expense will be recorded with respect to options granted under this plan.

Following the modification, the total weighted-average fair value of options granted under the 2006 Plan was $12.64 per share, and was estimated at the date of the modification using the Black-Scholes option-pricing model. The following assumptions were used for these options: weighted-average risk-free interest rate of 1.1%, no expected dividend yield, weighted-average volatility of 45.8%, based upon competitors within the industry and an expected option life of five years.

Stock Incentive Plan

In October 2010, the Company adopted the Bravo Brio Restaurant Group, Inc. Stock Incentive Plan (the “Stock Incentive Plan”) and on October 26, 2010, the Company granted 451,800 shares of restricted common stock to its employees.

Restricted stock activity for the twenty-six weeks ended June 26, 2011 is summarized as follows:

				Weighted-
	Number of			Average Grant
	Shares			Date Fair Value
Outstanding at December 26, 2010		449,300		$	16.90
Granted		—			—
Vested		—			—
Forfeited		(11,750	)	$	16.90
Outstanding at June 26, 2011		437,550		$	16.90

Fair value of the outstanding shares of restricted stock is based on the average of the high and low price of the Company’s shares on October 25, 2010, the date immediately preceding the date of grant. The average of the high and low price of the Company’s shares on October 25, 2010 was $16.90. In the first twenty-six weeks of 2011, the Company recorded approximately $0.9 million in stock compensation costs related to the shares of restricted stock. As of June 26, 2011, total unrecognized stock-based compensation expense related to non-vested shares of restricted stock was approximately $5.7 million, which is expected to be recognized over a weighted average period of approximately 3.3 years taking into account potential forfeitures. These shares of restricted stock will vest, subject to certain exceptions, annually over a four-year period.