Stock-Based Compensation

8 Months Ended

Sep. 08, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

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, restricted stock units, other stock-based awards, other cash-based compensation and performance awards. Under the plan, there were 3,300,000 shares of common stock reserved and authorized. At September 8, 2020, there were 172,422 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 $1.3 million for both the twelve weeks ended September 8, 2020 and September 10, 2019, respectively, and $3.9 million and $4.6 million for the thirty-six weeks ended September 8, 2020 and September 10, 2019, respectively.

Restricted Stock Awards

A summary of outstanding and unvested restricted stock activity as of September 8, 2020 and changes during the period from December 31, 2019 through September 8, 2020 are as follows:

	Shares	Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2019	1,142,718	$	12.92
Granted	614,518	6.36
Vested	(429,936)	12.52
Forfeited	(79,650)	12.64
Nonvested at September 8, 2020	1,247,650	$	9.85

For the thirty-six weeks ended September 8, 2020 and September 10, 2019, the Company made payments of $1.0 million and $2.6 million, respectively, related to tax withholding obligations for the vesting of restricted stock awards in exchange for 164,545 and 204,494 shares withheld, respectively.

As of September 8, 2020, there was $8.6 million of unrecognized stock compensation expense, net of estimated forfeitures, related to restricted stock awards that is expected to be recognized over a weighted-average remaining period of 2.7 years. The fair value of these awards was determined based on the Company’s stock price on the grant date.

Stock Options

A summary of stock option activity as of September 8, 2020 and changes during the period from December 31, 2019 through September 8, 2020 are as follows:

	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
				(in years)	(in thousands)
Options outstanding at December 31, 2019	412,750	$	11.71	3.8	$	—
Granted	236,453	6.40
Exercised	—	—
Forfeited/Expired	(74,250)	11.37
Options outstanding at September 8, 2020	574,953	$	9.57	4.7	$	443
Options exercisable at September 8, 2020	274,625	$	11.34	3.1	$	—
Options exercisable and expected to vest at September 8, 2020	499,064	$	9.91	4.5	$	319

The aggregate 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 September 8, 2020 and December 31, 2019, respectively.

As of September 8, 2020, there was $0.6 million of unrecognized stock compensation expense, net of estimated forfeitures, related to stock option grants that is expected to be recognized over a weighted-average remaining period of 3.2 years.