Buffalo Wild Wings 2009 Annual Report Download - page 77

BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 27, 2009 and December 28, 2008
(Dollar amounts in thousands, except per-share amounts)
Total stock-based compensation expense recognized in the consolidated statement of earnings for fiscal year 2008 was
$4,900 before income taxes and consisted of restricted stock, stock options, and employee stock purchase plan (ESPP) expense of
$4,510, $138 and $252, respectively. The related total tax benefit was $1,817 during 2008.
Total stock-based compensation expense recognized in the consolidated statement of earnings for fiscal year 2007 was $3,755
before income taxes and consisted of restricted stock, stock options, and employee stock purchase plan (ESPP) expense of $3,538, $37
and $180, respectively. The related total tax benefit was $2,291 during 2007.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton (“BSM”) option valuation
model with the following assumptions:
Stock Options
December 27,
2009
December 28,
2008
December 30,
2007*
Expected dividend yield 0.0% 0.0% N/A
Expected stock price volatility 59.2% 45.6% N/A
Risk-free interest rate 2.0% 2.8% N/A
Expected life of options 5 years 5 years N/A
Employee Stock Purchase Plan
December 27,
2009
December 28,
2008
December 30,
2007
Expected dividend yield 0.0% 0.0% 0.0%
Expected stock price volatility 52.7-59.1% 46.7-55.7% 41.4 – 44.4%
Risk-free interest rate 0.2-0.3% 0.8-1.9% 3.6 – 4.9%
Expected life of options 0.5 years 0.5 years 0.5 years
No stock options were granted in 2007.
The expected term of the options represents the estimated period of time until exercise and is based on historical experience of
similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior.
Expected stock price volatility is based on historical volatility of our stock. The risk-free interest rate is based on the implied yield
available on U.S. Treasury zero-coupon issues with an equivalent remaining term. We have not paid dividends in the past.
(x) New Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board (FASB) issued SFAS No. 168, “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 168 approved the FASB Accounting
Standards Codification (the Codification) as the single source of authoritative nongovernmental GAAP. All existing accounting
standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission, have been superseded by the Codification. All other
non-grandfathered, non-SEC accounting literature not included in the Codification has become nonauthoritative. The Codification is
effective for interim or annual periods ending after September 15, 2009. There have been no changes to the content of our financial
statements or disclosures as a result of implementing the Codification during the year ended December 27, 2009. However, as a result
of implementation of the Codification, previous references to new accounting standards and literature are no longer applicable. In
order to ease the transition to the Codification, we are providing the Codification cross-reference alongside the references to the
standards issued and adopted prior to the adoption of the Codification. All future references to authoritative accounting literature in
our consolidated financial statements will be referenced in accordance with the Codification.
Source: BUFFALO WILD WINGS INC, 10-K, February 26, 2010 Powered by Morningstar® Document Research℠