Stock-Based Compensation

12 Months Ended

Dec. 29, 2013

2006 Stock Incentive Plan. In 2006, the Company adopted a stock plan entitled the 2006 Stock Incentive Plan, as amended, (the “2006 Plan”) and reserved and authorized a total of 3,300,000 shares of common stock for grant thereunder. On June 9, 2011, the stockholders approved an amendment to the 2006 Plan increasing the number of shares of common stock available for issuance by an additional 1,000,000 shares. As of December 29, 2013, 2,139,570 shares were available for future grant or issuance.

In 2013, the Company issued an aggregate of 28,766 non-vested shares to non-employee directors and 19,000 non-vested shares to an officer of the Company. In 2012, the Company issued an aggregate of 36,338 non-vested shares to non-employee directors and 510,900 non-vested shares to certain employees. In 2011, the Company issued an aggregate of 8,334 non-vested shares to non-employee directors and 360,200 non-vested shares to certain employees.

In connection with the Spin-off of Fiesta, on March 5, 2012 Carrols Restaurant Group converted all of its outstanding vested stock options to shares of the Company's common stock and all of its outstanding non-vested stock options to non-vested shares of the Company's common stock. The non-vested stock awards issued vest according to the same period and anniversary dates as the original stock options, with the pro-rated portion of the award vesting on the anniversary of the original option award. The conversion resulted in $0.5 million of total incremental compensation cost pertaining to continuing operations of the Company, of which $0.4 million was recognized during the year ended December 30, 2012.

The non-vested stock awards issued to certain employees in 2013, 2012 and 2011 vest over four years at the rate of 25% on each anniversary of the award. The non-vested stock awards issued to non-employee directors in 2013 and 2012 vest over five years at the rate of 20% on each anniversary date of the award, provided that the participant has continuously remained a director of the Company. The non-vested stock awards issued to non-employee directors in 2011 vest over two years at the rate of 50% on each anniversary date of the award, provided that the participant has continuously remained a director of the Company. Forfeiture rates are based on a stratification of employees by expected exercise behavior and range from 0% to 15%.

Stock-based compensation expense for the years ended December 29, 2013, December 30, 2012, and January 1, 2012 was $1.2 million, $0.9 million and $1.0 million, respectively.

As of December 29, 2013, the total non-vested stock-based compensation expense was approximately $2.6 million and the remaining weighted average vesting period for non-vested shares was 2.1 years.

A summary of all non-vested shares activity for the year ended December 29, 2013 was as follows:



	Shares	Weighted Average Grant Date Price
Non-vested at December 30, 2012	934,628	$	7.84
Granted	47,766	6.23
Vested	(300,093)	8.51
Forfeited	(19,378)	10.16
Non-vested at December 29, 2013	662,923	7.35

The fair value of the non-vested shares is based on the closing price of the Company's stock on the date of grant.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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