Popeye's 2014 Annual Report Download - page 78

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Popeyes Louisiana Kitchen, Inc.
Notes to Consolidated Financial Statements
For Fiscal Years 2014, 2013, and 2012 — (Continued)
60
These awards are amortized as expense on a straight line basis over the three-year vesting period. Compensation expense
reflects the number of awards that are expected to vest and are adjusted to reflect those awards that do ultimately vest. The Company
recognizes compensation expense for awards if and when the Company concludes that is is probable that the three-year cumulative
EBITDA performance condition will be achieved. The Company recognized approximately $2.8 million, $2.0 million, and $0.6
million, in stock-based compensation expense associated with these awards during 2014, 2013, and 2012, respectively. During
the vesting period, recipients of the shares are entitled to dividends on such shares, provided that such shares are not forfeited.
Dividends are accumulated and paid out at the end of the vesting period.
As of December 28, 2014, there was approximately $2.8 million in unrecognized compensation cost related to unvested
performance stock awards which are expected to be recognized over a weighted average period of approximately 1.9 years. The
awards under this new performance stock award plan began vesting in 2014. The total fair value at grant date of awards which
vested during 2014 was $0.2 million. There was no value in 2013 and 2012, respectively.
Our previous long-term incentive plan divided performance stock award grants into three separate tranches. Each tranche was
granted annually and was earned based on annual EBITDA performance. Earned performance shares were not vested until the
completion of the entire three-year performance period. Performance shares were earned annually according to the same scale as
the annual incentive plan based on achieving a minimum EBITDA performance of 95% up to a maximum of 110% EBITDA
performance. Dividends, if paid by the company, are only paid on earned performance shares. The last grant under this plan was
in 2013.
The following table summarizes the performance stock awards activity under the former long-term incentive plan for the 52 week
period ended December 28, 2014:
(share awards in thousands) Shares
Weighted
Average
Grant
Date Fair
Value
Unvested performance stock awards:
Outstanding beginning of year 87 $ 22.44
Granted 11 $ 19.11
Vested (97) $ 22.17
Canceled (1) $ 16.26
Outstanding end of year — $ —
The grant date fair values of the performance stock awards granted under the former long-term incentive plan were based on
the Company's closing stock price on the date of grant. The weighted average grant date fair value of restricted share awards
granted during 2013 and 2012 were $34.81 and $15.27, respectively.
Each tranche granted was amortized as expense on a straight line basis from the date of grant through the scheduled vesting
date. Compensation expense reflects the number of awards that were expected to vest and are adjusted to reflect those awards
that ultimately vested. The Company recognized compensation expense for awards if and when the Company concluded that is
is probable that the annual EBITDA performance condition would be achieved. The Company recognized approximately $0.4
million, $1.7 million, and $2.3 million, in stock-based compensation expense associated with these awards during 2014, 2013,
and 2012, respectively.
As of December 28, 2014, there was no unrecognized compensation cost related to unvested performance stock awards under
the former long-term incentive plan. The total fair value at grant date of awards which vested during 2014, 2013, and 2012 was,
$2.2 million, $2.2 million, and $1.9 million, respectively.
Restricted Stock Awards
The Company also grants restricted stock awards pursuant to the 2006 Incentive Stock Plan which generally vest on a pro rata
basis over three years.