12. STOCK-BASED COMPENSATION

As of December 30, 2015, options to purchase 2,151,214 shares of common stock of the Company were outstanding. Included in the December 30, 2015 amount are 1,728,964 options that are fully vested. The remaining options vest over time or upon the Company’s attaining annual financial goals. However, the compensation committee of the board of directors, as administrator of the Company’s 2014 Omnibus Equity Incentive Plan, has the power to accelerate the vesting schedule of stock-based compensation, and, generally, in the event of an employee termination in connection with a change in control of the Company, any unvested portion of an award under the plan shall become fully vested. In fiscal 2013 and 2012, the Company granted 535,238 and 2,126,677 options with an exercise price of $5.84, which was greater than the fair value of the common stock on the date of grant (premium options). As of December 30, 2015, 1,739,367 premium options remain outstanding. In fiscal 2014 and 2013, the Company granted 229,048 and 267,619 options with an exercise price equal to the fair value of the common stock on the date of grant. Of the total options granted in fiscal 2014, 2013 and 2012, 50% are performance based and vest according to whether certain financial targets are met, and the remaining 50% vest over four or three years. As of December 30, 2015, 411,847 of these options remained outstanding. No options were granted in fiscal 2015. The options generally expire 10 years from the date of grant. Changes in stock options for the years ended December 30, 2015 and December 31, 2014, are as follows:

	Shares			Weighted-Average Exercise Price
Outstanding—December 25, 2013		3,338,096		$	5.31
Grants		229,048			15.55
Exercised		(496,944	)		4.20
Forfeited, cancelled or expired		(24	)		5.31
Outstanding—December 31, 2014		3,070,176			6.25
Grants		—			—
Exercised		(863,247	)		4.93
Forfeited, cancelled or expired		(55,715	)		17.25
Outstanding—December 30, 2015		2,151,214		$	6.50
Vested and expected to vest at December 30, 2015		2,146,360		$	6.50
Exercisable at December 30, 2015		1,728,964		$	6.12

Stock options at December 30, 2015 are summarized as follows:

Range of Exercise Prices	Number Outstanding		Weighted-Average Remaining Contractual Life (in Years)		Weighted- Average Exercise Price		Number Exercisable		Weighted-Average Exercise Price
$4.09		209,788		7.52	$	4.09		109,438	$	4.09
5.84		1,739,367		6.58		5.84		1,538,657		5.84
12.72		32,386		0.75		12.72		32,386		12.72
15.00		169,673		8.57		15.00		48,483		15.00
$4.09 - $15.00		2,151,214		6.74	$	6.50		1,728,964	$	6.12

The intrinsic value of options outstanding and options exercisable, calculated as the difference between the market value as of December 30, 2015 and the exercise price, are $13.7 million and $11.5 million, respectively. The intrinsic value of options exercised, calculated as the difference between the market value on the date of exercise and the exercise price, was $14.9 million, $11.5 million and $0 for fiscal years 2015, 2014 and 2013, respectively.

Options are accounted for as follows:

Employee Options

The Company expenses the estimated fair value of employee stock options and similar awards based on the grant-date fair value of the award. For options that are based on a service requirement, the cost is recognized on a straight-line basis over the period during which an employee is required to provide service, usually the vesting period. The options granted in fiscal 2012 had a three year vesting period while the options granted in fiscal 2013 and 2014 had a four year vesting period. For options that are based on a performance requirement, the cost is recognized over the period which the performance criteria relate. The Company has authorized 4,402,240 shares of common stock for issuance in connection with stock options. As of December 30, 2015, 882,594 shares were available for grant. In order to meet the fair value measurement objective, the Company utilizes the Black–Scholes option-pricing model to value compensation expense for share-based awards and has developed estimates of various inputs including forfeiture rate, expected term life, expected volatility, and risk-free interest rate. The forfeiture rate is based on historical rates and reduces the compensation expense recognized. The expected term of options granted is derived from the simplified method. The risk-free interest rate is based on the implied yield on a U.S. Treasury security with constant maturity with a remaining term equal to the expected term of the Company’s employee stock options. Expected volatility is based on the comparative industry entity data. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero for option valuation. The volatility factor was determined based on four publicly-traded companies which are in the same market category as the Company. The peer companies were selected based on similarity of market capitalization, size and certain operating characteristics. The calculated volatility was established by taking the historical daily closing values prior to grant date, over a period equal to the expected term, for each of the peer companies.

The weighted-average estimated fair value of employee stock options granted during the year ended December 31, 2014 was $6.23 per share using the Black–Scholes model with the following weighted-average assumptions used to value the option grants: expected volatility of 32.4% to 41.0%, expected life of 5.75 years, risk-free interest rate of 1.70% to 1.72%, and expected dividends of 0%.

The weighted-average estimated fair value of employee stock options granted during the year ended December 25, 2013 was $1.40 per share using the Black–Scholes model with the following weighted-average assumptions used to value the option grants: expected volatility of 40.6%, expected life of 6.25 years, risk-free interest rates of 1.15% to 1.99%, and expected dividends of 0%.

During the years ended December 30, 2015, December 31, 2014 and December 25, 2013, the Company recognized share-based compensation expense of $0.5 million, $1.1 million and $822,000, respectively. These expenses were included in general and administrative expenses consistent with the salary expense for the related optionees in the accompanying consolidated statements of operations.

As of December 30, 2015, there was total unrecognized compensation expense of $0.9 million related to unvested stock options which the Company expects to recognize over a weighted average period of 2.1 years.

Restricted Stock

In fiscal 2015, we granted three of our directors restricted stock grants for 2,636 shares each. In fiscal 2014, we granted two of our directors restricted stock grants for 3,333 shares each. Restricted stock grants were equivalent to $50,000 divided by the stock’s value on the date of grant, which in fiscal 2015 was deemed to be the preceding day’s closing price and in fiscal 2014 was deemed to be our public offering price. These grants vest based on continued service over three years. We base the amount of unearned compensation recorded on the market value of the shares on the date of issuance. In fiscal 2015 and 2014, the Company recognized share-based compensation expense of $98,000 and $32,000, respectively. This expense was included in general and administrative expenses in the accompanying consolidated statements of operations. As of December 30, 2015, there was total unrecognized compensation expense of $250,000 related to unvested restricted shares, which the Company expects to recognize over a weighted-average period of 2.1 years.

Changes in restricted shares for the years ended December 30, 2015 and December 31, 2014, are as follows:

	Shares			Weighted-Average Fair Value
Unvested shares at December 25, 2013		—		$	—
Granted		6,666			34.56
Released		—			—
Forfeited, cancelled, or expired		—			—
Unvested shares at December 31, 2014		6,666			34.56
Granted		7,908			18.97
Released		(2,222	)		34.56
Forfeited, cancelled, or expired		—			—
Unvested shares at December 30, 2015		12,352		$	24.58