Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

v3.7.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 25, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
The Company has outstanding awards under the 2006 Stock Option Plan (the “2006 Plan”). The outstanding options under the 2006 Plan are fully vested as of December 25, 2016. In connection with the IPO, the Company terminated the 2006 Plan, and no further awards will be granted under the 2006 Plan. The termination of the 2006 Plan did not affect awards outstanding under the 2006 Plan at the time of its termination and the terms of the 2006 Plan continue to govern those outstanding awards.
In connection with the IPO, the Company adopted the Chuy's Holdings, Inc. 2012 Omnibus Equity Incentive Plan (the “2012 Plan”) which allows the Company’s Board of Directors to grant stock options, restricted stock, restricted stock units and other equity-based awards to directors, officers, and key employees of the Company. The 2012 Plan provides for granting of options to purchase shares of common stock at an exercise price not less than the fair value of the stock on the date of grant. The outstanding options under the 2012 Plan vest 20% on each of the first five anniversaries of the date of grant and have a maximum term of ten years. The outstanding restricted stock units vest ratably on each of the first four or five anniversaries of the date of grant. As of December 25, 2016, a total of 818,257 shares of common stock are reserved and remain available for issuance under the 2012 Plan.
Stock-based compensation cost recognized in the accompanying consolidated statements of income was $2.2 million, $1.7 million and $1.1 million for the years ended December 25, 2016, December 27, 2015 and December 28, 2014, respectively. Stock-based compensation recognized as capitalized development was $160,000, $114,000 and $224,000 for the years ended December 25, 2016, December 27, 2015 and December 28, 2014, respectively. Capitalized stock-based compensation is included in Property and equipment, net on the consolidated balance sheets.
Stock Options
A summary of stock-based compensation activity and changes related to stock options for the year ended December 25, 2016 are as follows:
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(Years)
 
Aggregate
Intrinsic
Value
Outstanding at December 27, 2015
634,412

 
$
11.91

 
 
 
 
Granted
—

 
—

 
 
 
 
Exercised
(312,165
)
 
4.71

 
 
 
 
Forfeited
(6,220
)
 
31.09

 
 
 
 
Outstanding at December 25, 2016
316,027

 
$
18.64

 
4.87
 
$
4,545

Exercisable as of December 25, 2016
259,117

 
$
16.63

 
4.57
 
$
4,242


The aggregate intrinsic value in the table above is obtained by subtracting the weighted average exercise price from the estimated fair value of the underlying common stock as of December 25, 2016 and multiplying this result by the related number of options outstanding and exercisable at December 25, 2016. The estimated fair value of the common stock as of December 25, 2016 used in the above calculation was $32.95 per share, the closing price of the Company’s common stock on December 23, 2016, the last trading day of the year. The total intrinsic value of options exercised was $9.1 million and $0.6 million for the years ended December 25, 2016 and December 27, 2015, respectively. During the years ended December 25, 2016, December 27, 2015 and December 28, 2014 the total fair value of options vested was $0.5 million, $0.6 million, and $0.6 million, respectively.
The weighted-average grant date fair value of options granted was $11.12 per share, during the year ended, December 28, 2014, as estimated at the date of grant using the Black-Scholes pricing model with the following weighted-average assumptions (no options were granted during the years ended December 25, 2016 and December 27, 2015): 
        
 
2014
Dividend yield
—
%
Expected volatility
37
%
Risk-free rate of return
1.58
%
Expected life (in years)
5


The assumptions above represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. The expected term of options granted was based on a representative peer group with similar employee groups and expected behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury constant maturities rate in effect at the time of grant. The Company utilized a weighted rate for expected volatility based on a representative peer group within the industry.
There was approximately $0.4 million of total unrecognized compensation costs related to options granted under the 2006 Plan and the 2012 Plan as of December 25, 2016. These costs will be recognized ratably through the year 2019.
One significant factor in determining the fair value of the Company's options, when using the Black-Scholes option pricing model, is the fair value of the common stock underlying those stock options. The fair value of the Company's common stock is based on the market price as quoted by the Nasdaq Stock Market.
Restricted Stock Units
A summary of stock-based compensation activity and changes related to restricted stock units for the year ended December 25, 2016 are as follows:
 
Shares
 
Weighted
Average
Fair Value
 
Weighted
Average
Remaining
Contractual
Term
(Years)
Outstanding at December 27, 2015
165,111

 
$
29.72

 
 
Granted
94,402

 
34.36

 
 
Vested
(46,004
)
 
30.89

 
 
Forfeited
(6,759
)
 
30.03

 
 
Outstanding at December 25, 2016
206,750

 
$
31.57

 
2.60

The fair value of the restricted stock units is the quoted market value of our common stock on the date of grant. As of December 25, 2016, total unrecognized stock-based compensation expense related to non-vested restricted stock units was approximately $4.8 million, which is expected to be recognized ratably through the year 2021.