Buffalo Wild Wings 2012 Annual Report Download - page 46

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46
BUFFALO WILD WINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 30, 2012 and December 25, 2011
(Dollar amounts in thousands, except per-share amounts)
Total stock-based compensation expense recognized in the consolidated statement of earnings for fiscal year 2011 was
$11,383 before income taxes and consisted of restricted stock units, stock options, and ESPP expense of $9,985, $920 and
$478, respectively. The related total tax benefit recognized in 2011 was $3,929.
Total stock-based compensation expense recognized in the consolidated statement of earnings for fiscal year 2010 was
$7,712 before income taxes and consisted of restricted stock, stock options, and ESPP expense of $6,519, $560 and $633,
respectively. The related total tax benefit recognized in 2010 was $2,528.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option valuation
model with the following assumptions:
Stock Options
December 30,
2012
December 25,
2011
December 26,
2010
Expected dividend yield
0.0%
0.0%
0.0%
Expected stock price volatility
53.6%
54.1%
54.4%
Risk-free interest rate
1.1%
2.2%
2.6%
Expected life of options
5 years
5 years
5 years
Employee Stock Purchase Plan
December 30,
2012
December 25,
2011
December 26,
2010
Expected dividend yield
0.0%
0.0%
0.0%
Expected stock price volatility
48.1-48.7%
49.2-50.1%
50.0-50.6%
Risk-free interest rate
0.15%
0.04-0.07%
0.19-0.30%
Expected life of options
0.5 years
0.5 years
0.5 years
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 July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-
02 “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Assets for Impairment.” ASU 2012-02 gives
companies the option to perform a qualitative assessment before calculating the fair value of the indefinite-lived intangible
asset. Under the guidance in ASU 2012-02, if this option is selected, a company is not required to calculate the fair value of
the indefinite-lived intangible unless the entity determines it is more likely than not that its fair value is less than its carrying
amount. The provisions of ASU 2012-02 are effective for annual and interim impairment tests performed for fiscal years
beginning after September 15, 2012, but early adoption is permitted. We have elected not to early adopt the provisions of
ASU 2012-02 and do not expect ASU 2012-02 to materially impact our consolidated financial statements.