Stock-Based Compensation

2015 Omnibus Incentive Plan

In connection with the approval of the Business Combination, the Del Taco Restaurants, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) was approved by shareholders to offer eligible employees, directors and consultants cash and stock-based incentive awards. Awards under the 2015 Plan are generally not restricted to any specific form or structure and could include, without limitation, stock options, stock appreciation rights, restricted stock, other stock-based awards, other cash-based compensation and performance awards. Under the 2015 Plan, there are 3,300,000 shares of common stock reserved and authorized. At December 31, 2019, there were 704,948 shares of common stock available for grant under the 2015 Plan.

Stock-Based Compensation Expense

The total compensation expense related to the 2015 Plan was $6.3 million for the fifty-two weeks ended December 31, 2019, $6.1 million for the fifty-two weeks ended January 1, 2019 and $4.9 million for the fifty-two weeks ended January 2, 2018.

Restricted Stock Awards

During the fifty-two weeks ended December 31, 2019, 531,173 shares of restricted stock were granted to certain directors, officers and employees of the Company under the 2015 Plan. These restricted stock awards for officers and employees vest on a straight-line basis in equal annual installments over four years from the grant date and over one year from the grant date for directors.

A summary of outstanding and unvested restricted stock activity as of December 31, 2019 and changes during the period from January 1, 2019 through December 31, 2019 are as follows:



	Shares		Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2019	1,234,531		$	12.87
Granted	531,173		12.17
Vested	(520,835	)	12.04
Forfeited	(102,151	)	12.89
Nonvested at December 31, 2019	1,142,718		$	12.92

During the fifty-two weeks ended December 31, 2019 and January 1, 2019, the Company made payments of $2.6 million and $2.4 million, respectively, related to tax withholding obligations for the vesting of restricted stock awards in exchange for 204,494 and 168,484 shares withheld, respectively. As of December 31, 2019, there was $9.3 million of unrecognized compensation expense, net of estimated forfeitures, related to restricted stock, which is expected to be recognized over a weighted-average period of 2.5 years. The weighted average grant date fair value of restricted stock awards granted was $12.17, $13.88 and $13.64 during the fifty-two weeks ended December 31, 2019, fifty-two weeks ended January 1, 2019 and fifty-two weeks ended January 2, 2018, respectively. The total fair value of awards that became fully vested during the fifty-two weeks ended December 31, 2019, fifty-two weeks ended January 1, 2019 and fifty-two weeks ended January 2, 2018 was $6.6 million, $5.9 million and $5.4 million, respectively.

Stock Options

During the fifty-two weeks ended December 31, 2019, 5,000 stock options were granted to an employee of the Company under the 2015 Plan. The stock options vest on a straight-line basis in equal annual installments over four years from the grant date.

A summary of stock option activity as of December 31, 2019 and changes during the period from January 1, 2019 through December 31, 2019 are as follows:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in thousands)
Options outstanding at January 1, 2019	453,250		$	11.74	5.0	$	77
Granted	5,000		10.43
Exercised	(12,000	)	10.05
Forfeited / Expired	(33,500	)	12.47
Options outstanding at December 31, 2019	412,750		$	11.71	3.8	$	—
Options exercisable at December 31, 2019	276,498		$	11.02	3.3	$	—
Options exercisable and expected to vest at December 31, 2019	391,896		$	11.62	3.7	$	—

The aggregated intrinsic value in the table above is the amount by which the current market price of the Company's stock exceeds the exercise price on December 31, 2019 and January 1, 2019, respectively.

The following table reflects the weighted-average assumptions used in the Black-Scholes option-pricing model to value the stock options granted in the fifty-two weeks ended December 31, 2019, the fifty-two weeks ended January 1, 2019 and the fifty-two weeks ended January 2, 2018:



	52 Weeks Ended December 31, 2019			52 Weeks Ended January 1, 2019			52 Weeks Ended January 2, 2018
Expected volatility	35.61		%	36.29		%	36.09		%
Risk-free rate of return	2.49		%	2.71		%	1.86		%
Expected life (in years)	4.75			4.74			4.75
Dividend yield	—			—			—
Fair value per share at date of grant	$	3.59		$	4.92		$	4.63

Since the Company does not have a substantial history of traded common stock activity, expected volatility was based on historical data from selected peer public company restaurants. The risk-free rate is based on published U.S. Treasury rates in effect at the time of grant with a similar duration of the expected life of the options. The expected life of options granted is derived from the average of the contractual term of the option and the vesting periods. The Company has not paid any dividends to date; therefore, the Company used an expected dividend yield of zero for option valuation purposes.

As of December 31, 2019, there was $0.4 million of total unrecognized compensation expense, net of estimated forfeitures, related to stock options grants, which is expected to be recognized over a weighted-average remaining period of 1.9 years. The total intrinsic value of stock options exercised was $29,000, $51,000 and $25,000 during the fifty-two weeks ended December 31, 2019, fifty-two weeks ended January 1, 2019 and fifty-two weeks ended January 2, 2018, respectively.