Stock-Based Compensation | 3 Months Ended |
Apr. 01, 2014 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Stock-Based Compensation | ' |
7. STOCK-BASED COMPENSATION |
We have two stock-based compensation plans – the 2005 Equity Incentive Plan and the 1996 Stock Option Plan – under which we may issue shares of our common stock to employees, officers, directors and consultants. Upon effectiveness of the 2005 Equity Incentive Plan (the “Plan”), the 1996 Stock Option Plan was closed for purposes of new grants. Both of these plans have been approved by our shareholders. Under the Plan, we have granted incentive stock options, non-qualified stock options, and restricted stock units (“RSUs”). Shares subject to stock options and stock appreciation rights are charged against the Plan share reserve on the basis of one share for each one share granted while shares subject to other types of awards, including restricted stock units, are currently charged against the Plan share reserve on the basis of 1.5 shares for each one share granted. The Plan also contains other limits with respect to the terms of different types of incentive awards and with respect to the number of shares subject to awards that can be granted to an employee during any fiscal year. All options granted under the Plan expire within 10 years of their date of grant. |
Under the Plan, we issue RSUs as a component of the annual equity grant award to officers and other employees and in connection with the BJ’s Gold Standard Stock Ownership Program (the “GSSOP”). The GSSOP is a longer-term equity incentive program that utilizes Company RSUs or stock options and is dependent on each participant’s extended service with us in their respective positions and remaining in good standing during that service period (i.e., five years). |
The Plan permits us to set the vesting terms and exercise period for awards at our discretion. Stock options generally vest at 20% per year or cliff vest, either ratably in years three through five or 100% in year five, and expire ten years from date of grant. RSUs generally vest at 20% per year for non-GSSOP RSU grantees and generally cliff vest either at 33% on the third anniversary and 67% on the fifth anniversary or at 100% after the fifth anniversary for GSSOP participants. Beginning in 2014, we began issuing RSU’s with vesting subject to achievement of performance targets as well as time-based vesting. |
The following table presents information related to stock-based compensation (in thousands): |
|
| | | | | | | | | | | | | | | | |
| | For The Thirteen Weeks Ended | | | | | | | | | |
| | April 1, 2014 | | | April 2, 2013 | | | | | | | | | |
Labor and benefits stock-based compensation | | $ | 517 | | | $ | 328 | | | | | | | | | |
General and administrative stock-based compensation | | $ | 725 | | | $ | 839 | | | | | | | | | |
Capitalized stock-based compensation (1) | | $ | 43 | | | $ | 52 | | | | | | | | | |
|
-1 | Capitalized stock-based compensation is included in “Property and equipment, net” on the Consolidated Balance Sheets. | | | | | | | | | | | | | | | |
Stock Options |
The fair value of each stock option grant issued is estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: |
|
| | | | | | | | | | | | | | | | |
| | For the Thirteen Weeks Ended | | | | | | | | | |
| | April 1, 2014 | | | April 2, 2013 | | | | | | | | | |
Expected volatility | | | 37.9 | % | | | 36.9 | % | | | | | | | | |
Risk free interest rate | | | 1.6 | % | | | 0.7 | % | | | | | | | | |
Expected option life | | | 5 years | | | | 5 years | | | | | | | | | |
Dividend yield | | | 0 | % | | | 0 | % | | | | | | | | |
Fair value of options granted | | $ | 10.63 | | | $ | 11.06 | | | | | | | | | |
U.S. GAAP requires us to make certain assumptions and judgments regarding the grant date fair value. These judgments include expected volatility, risk free interest rate, expected option life, dividend yield and vesting percentage. These estimations and judgments are determined by us using many different variables that, in many cases, are outside of our control. The changes in these variables or trends, including stock price volatility and risk free interest rate, may significantly impact the grant date fair value resulting in a significant impact to our financial results. |
|
The exercise price of the stock options under our stock-based compensation plans shall be equal to or exceed 100% of the fair market value of the shares at the date of option grant. The following table represents stock option activity: |
|
| | | | | | | | | | | | | | | | |
| | Options Outstanding | | | Options Exercisable | |
| | Shares | | | Weighted | | | Shares | | | Weighted | |
(in thousands) | Average | (in thousands) | Average |
| Exercise | | Exercise |
| Price | | Price |
Outstanding options at December 31, 2013 | | | 2,049 | | | $ | 22.82 | | | | 1,514 | | | $ | 18.74 | |
Granted | | | 200 | | | $ | 29.92 | | | | | | | | | |
Exercised | | | (115 | ) | | $ | 15.48 | | | | | | | | | |
Forfeited | | | (26 | ) | | $ | 43.39 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Outstanding options at April 1, 2014 | | | 2,108 | | | $ | 23.65 | | | | 1,460 | | | $ | 19.44 | |
| | | | | | | | | | | | | | | | |
As of April 1, 2014, total unrecognized stock-based compensation expense related to non-vested stock options was $5.9 million, which is generally expected to be recognized over the next five years. |
Restricted Stock Units |
Restricted stock unit activity was as follows: |
|
| | | | | | | | | | | | | | | | |
| | Shares | | | Weighted | | | | | | | | | |
(in thousands) | Average | | | | | | | | |
| Fair Value | | | | | | | | |
Outstanding RSUs at December 31, 2013 | | | 433 | | | $ | 33.23 | | | | | | | | | |
Granted | | | 92 | | | $ | 30.89 | | | | | | | | | |
Vested or released | | | (18 | ) | | $ | 31.98 | | | | | | | | | |
Forfeited | | | (10 | ) | | $ | 37.21 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Outstanding RSUs at April 1, 2014 | | | 497 | | | $ | 32.74 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
The fair value of the RSUs is the quoted market value of our common stock on the date of grant. The fair value of each RSU is expensed over the period during which the restrictions are expected to lapse (i.e., five years). As of April 1, 2014, total unrecognized stock-based compensation expense related to non-vested restricted shares was approximately $8.4 million, which is generally expected to be recognized over the next five years. |