Stock-Based Compensation

9 Months Ended

Sep. 27, 2016

Stock-Based Compensation

Stock-Based Compensation

6.  Stock-Based Compensation

The following table presents information related to stock-based compensation (in thousands):

	Thirteen Weeks Ended September 27, 2016		Thirteen Weeks Ended September 29, 2015		Thirty-Nine Weeks Ended September 27, 2016		Thirty-Nine Weeks Ended September 29, 2015
Labor expenses	$	1,494	$	1,638	$	4,458	$	4,740
Other operating costs and expenses	61		61		186		198
General and administrative expenses	3,318		3,173		11,533		9,611
Total stock-based compensation	4,873		4,872		16,177		14,549
Income tax benefit	1,864		1,864		6,188		5,565
Total stock-based compensation, net of taxes	$	3,009	$	3,008	$	9,989	$	8,984
Capitalized stock-based compensation (1)	$	104	$	64	$	253	$	210

(1) It is our policy to capitalize the portion of stock-based compensation costs for our internal development and construction, legal, and facilities departments that relates to capitalizable activities such as the design and construction of new restaurants, remodeling existing locations, lease, intellectual property and liquor license acquisition activities and equipment installation.  Capitalized stock-based compensation is included in property and equipment, net and other assets on the condensed consolidated balance sheets.

Stock Options

We did not issue any stock options during the third quarters of fiscal 2016 or fiscal 2015.  Stock option activity during the thirty-nine weeks ended September 27, 2016 was as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
	(In thousands)		(Per share)		(In years)	(In thousands)
Outstanding at December 29, 2015	3,066		$	30.00	3.6	$	52,416
Granted	225		50.26
Exercised	(857	)	22.06
Forfeited or cancelled	(32	)	40.96
Outstanding at September 27, 2016	2,402		$	34.59	3.8	$	40,479
Exercisable at September 27, 2016	1,510		$	28.59	2.6	$	34,504

(1) Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal period end and the exercise price, multiplied by the number of in-the-money options and represents the pretax amount that would have been received by the option holders, had they all exercised their options on the fiscal period end date.

The total intrinsic value of options exercised during the thirteen and thirty-nine weeks ended September 27, 2016 was $6.0 million and $24.6 million, respectively.  The total intrinsic value of options exercised during the thirteen and thirty-nine weeks ended September 29, 2015 was $13.1 million and $34.7 million, respectively.  As of September 27, 2016, total unrecognized stock-based compensation expense related to unvested stock options was $9.1 million, which we expect to recognize over a weighted average period of approximately 2.8 years.

Restricted Shares and Restricted Share Units

Restricted share and restricted share unit activity during the thirty-nine weeks ended September 27, 2016 was as follows:

	Shares		Weighted Average Fair Value
	(In thousands)		(Per share)
Outstanding at December 29, 2015	1,891		$	41.31
Granted	399		50.05
Vested	(301	)	33.59
Forfeited	(82	)	42.81
Outstanding at September 27, 2016	1,907		$	44.25

Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant.  The weighted average fair value at the grant date for restricted shares and restricted share units issued during the third quarter of fiscal 2016 and fiscal 2015 was $50.44 and $54.47, respectively.  The fair value of shares that vested during the thirteen and thirty-nine weeks ended September 27, 2016 was $1.4 million and $10.1 million, respectively.  The fair value of shares that vested during the thirteen and thirty-nine weeks ended September 29, 2015 was $0.5 million and $6.8 million, respectively.  As of September 27, 2016, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $43.9 million, which we expect to recognize over a weighted average period of approximately 2.7 years.