Papa Johns 2015 Annual Report Download - page 93

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80
18. Equity Compensation (continued)
Information pertaining to option activity during 2015 is as follows (number of options and aggregate
intrinsic value in thousands):
Weighted
Average
Weighted Remaining
Number Average Contractual Aggregate
of Exercise Term Intrinsic
Options Price (In Years) Value
Outstanding at December 28, 2014 1,564 $24.52
Granted 330 64.51
Exercised (441) 18.18
Cancelled (34) 53.21
Outstanding at December 27, 2015
1,419
$35.10
6.28
$31,521
Exercisable at December 27, 2015 817 $21.77 4.61 $27,429
The following is a summary of the significant assumptions used in estimating the fair value of options
granted in 2015, 2014 and 2013:
2015 2014 2013
Assumptions (weighted average):
Risk-free interest rate 1.6% 1.8% 1.1%
Expected dividend yield 0.9% 1.0% 0.1%
Expected volatility 28.5% 35.7% 37.5%
Expected term (in years) 5.5 6.0 6.0
The risk-free interest rate for the periods within the contractual life of an option is based on the U.S.
Treasury yield curve in effect at the time of grant. The expected dividend yield was estimated as the
annual dividend divided by the market price of the Company’s shares on the date of grant. Expected
volatility was estimated by using the Company’s historical share price volatility for a period similar to the
expected life of the option.
Options granted generally vest in equal installments over three years and expire five or ten years after
grant. The expected term for these options represents the period of time that options granted are expected
to be outstanding. The expected term for 2015 was calculated using historical experience and the expected
term for 2014 and 2013 was calculated using the simplified method prescribed by Securities and
Exchange Commission rules and regulations because the expiration term of our options increased from
five to ten years and there was insufficient historical detail to be used to estimate the expected term.
The weighted average grant-date fair values of options granted during 2015, 2014 and 2013 was $16.93,
$16.48 and $9.87, respectively. The Company granted options to purchase 330,000, 293,000 and 498,000
shares in 2015, 2014 and 2013, respectively.