Popeye's 2014 Annual Report Download - page 76

Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2014, 2013, and 2012 — (Continued)
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As of December 28, 2014, the remaining value of shares that may be repurchased under the program was $41.5 million. On
February 20, 2015, the Company's Board of Directors approved a multi-year share repurchase authorization increasing the maximum
value of shares that may be repurchased under the plan to $100 million.
Pursuant to the terms of the Company’s 2013 Credit Facility, the Company may repurchase its common stock when the Total
Leverage Ratio is less than 3.00 to 1.0. Total Leverage Ratio, as defined in the 2013 Credit Facility, is the ratio of the Company’s
Consolidated Total Indebtedness to Consolidated EBITDA for the four immediately preceding fiscal quarters. The Total Leverage
Ratio at December 28, 2014 is less than 1.40 to 1.0.
Dividends. During 2014, 2013 and 2012, the Company paid no dividends.
Note 13 — Stock Option Plans
The 2006 Incentive Stock Plan. In May 2006, the Company created the 2006 Incentive Stock Plan. The plan authorizes the
issuance of approximately 3.3 million shares of the Company’s common stock. Options and other awards such as restricted stock,
stock appreciation rights, stock grants, and stock unit grants under the plan generally may be granted to any of the Company’s
employees and non-employee directors. The options currently granted and outstanding as of December 28, 2014 allow certain
employees and directors of the Company to purchase approximately 427,000 shares of common stock. The options vest over three
years on a graded basis. If not exercised, the options under these grants expire seven years from the date of issuance.
A Summary of Stock Option Plan Activity. The table below summarizes the activity within the Company’s stock option plans
for the fiscal year ended December 28, 2014.
(shares in thousands) Shares
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term
(years)
Aggregate
Intrinsic
Value
(millions)
Stock options:
Outstanding at beginning of year 566 $ 14.58
Granted options 81 41.52
Exercised options (205) 11.79
Canceled and expired options (15) 34.07
Outstanding at end of year 427 $ 20.35 3.8 $ 15.3
Exercisable at end of year 287 $ 13.54 2.9 $ 12.2
Shares available for future grants under the plans at end of year 1,056
The aggregate intrinsic value in the above table represents the total pre-tax intrinsic value (the difference between the Company’s
closing stock price on the last trading date of 2014 and the exercise price, multiplied by the number of options). The amount of
aggregate intrinsic value will change based on the fair market value of the Company’s common stock.
The Company recognized approximately $1.1 million, $0.9 million, and $0.9 million in stock-based compensation expense
associated with its stock option grants during 2014, 2013, and 2012, respectively. As of December 28, 2014, there was approximately
$0.9 million of total unrecognized compensation costs related to unvested stock options which are expected to be recognized over
a weighted average period of approximately 1.5 years. The total fair value at grant date of awards which vested during 2014, 2013,
and 2012 was $0.9 million, $0.8 million, and $1.4 million, respectively.
The weighted average grant date fair value of awards granted during 2014, 2013, and 2012 was $17.93, $15.11, and $7.74,
respectively. The total intrinsic value of stock options exercised during 2014, 2013, and 2012 was $6.4 million, $7.6 million and
$1.1 million, respectively
During 2014, 2013, and 2012, the fair value of option awards were estimated on the date of grant using a Black-Scholes option-
pricing model. The fair value of stock-based compensation is amortized on the graded vesting attribution method. The following
weighted average assumptions were used for the grants: