Stock-Based Compensation Arrangements:

2014 Equity Incentive Plan

The 2014 Equity Incentive Plan provides Parent authority to grant equity incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards or performance compensation awards to certain directors, officers or employees of the Company.

During 2019, 2018 and 2017, Parent granted options to purchase 498,566 shares, 112,769 and 123,603 shares, respectively, of its common stock to certain directors, officers and employees of the Company. The options are subject to certain service and performance based vesting criteria, and were split evenly between Tranches A, B and C, which have different vesting requirements. The options in Tranche A are service based, and vest and become exercisable in equal installments on each of the first five anniversaries of the respective grant dates. The Black-Scholes model was used to estimate the fair value of Tranche A stock options. Tranche B and Tranche C options are performance based and vest and become exercisable when certain return thresholds are achieved. The Monte Carlo simulation model was used to estimate the fair value of Tranche B and Tranche C stock options. Unvested Tranche A options are also subject to accelerated vesting and exercisability on the first anniversary of a change in control of Parent or within 12 months following such a change in control. Tranche B and C options may also vest and become exercisable if applicable hurdles are achieved in connection with an initial public offering. Compensation costs related to options in the Parent were recorded by the Company.

The weighted-average fair value of the options granted in 2019, 2018 and 2017 was estimated at $3.30, $2.96 and $2.07 per option, $4.93, $1.93 and $0.98 per option and $3.71, $2.28 and $1.28 per option, respectively, for Tranches A, B and C, respectively, on the date of grant based on the following assumptions:



	Fiscal Year
	2019				2018		2017
	September 2019		January and February 2019		February 2018		August 2017		February 2017

Dividend yield	—	%	—	%	—	%	—	%	—	%
Volatility for Tranche A	35	%	35	%	33	%	35	%	34	%
Volatility for Tranches B and C	35	%	35	%	35	%	34	%	33	%
Risk-free interest rate for Tranche A	1.75	%	2.60	%	2.70	%	1.39	%	1.38	%
Risk-free interest rate for Tranches B and C	1.82	%	2.65	%	2.42	%	1.28	%	1.16	%
Expected life - years	5.6		5.8		3.7		1.7		2.2

A summary of the option activity under the equity incentive plan as of December 29, 2019 and the activity for 2019 is presented below:



	Stock Options		Weighted Average Exercise Price ⁽¹⁾	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
			($ per share)		($ in thousands)
Outstanding stock options, December 30, 2018	1,987,331		$8.87
Options Granted	498,566		$8.81
Options Forfeited	(128,599	)	$9.64
Outstanding stock options, December 29, 2019	2,357,298		$8.79	5.4	$	—
Stock options expected to vest, December 29, 2019	1,595,892		$8.95	5.8	$	—
Exercisable stock options, December 29, 2019	584,085		$8.31	4.3	$	233

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⁽¹⁾ The weighted average exercise price reflects the original grant date fair value per option as adjusted for the dividend payment made in August 2015.

As of December 29, 2019, we had $1.6 million of total unrecognized share based compensation expense related to unvested options, net of expected forfeitures, which is expected to be amortized over the remaining weighted average period of 3.9 years.

Stock Awards

During the first quarter of 2019, certain officers of the Company were granted stock bonus awards under the 2014 Equity Incentive Plan. The number of common shares of Parent awarded was based on the fair market value of Parent’s common stock as of December 31, 2018. The shares granted to the officers were fully vested immediately on the date that they were granted. In addition, during 2019, the Company agreed to issue fully vested common shares of Parent to certain officers of the Company in the first quarter 2020 based on the Company’s financial performance for Fiscal 2019.

A summary of the stock-based compensation expense and the associated tax benefit recognized in the Consolidated Financial Statements is presented below:



	Fiscal Year
	December 29, 2019		December 30, 2018		December 31, 2017
	(in thousands)
Stock-based compensation costs related to stock awards	$	2,009	$	—	$	—
Stock-based compensation costs related to incentive stock options, net ⁽¹⁾	$	426	$	324	$	606
Stock-based compensation expense recognized	$	2,435	$	324	$	606
Tax benefit recognized from stock-based compensation awards	$	15	$	—	$	—

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(1)We capitalize the portion of stock-based compensation costs related to our design, construction, facilities and legal departments that are directly attributable to our venue development projects, such as the design and construction of a new venue and the remodeling and expansion of our existing venues. Capitalized stock-based compensation costs attributable to our venue development projects are included in “Property and equipment, net” in the Consolidated Balance Sheets.