11. Stockholders’ Equity

Common Stock

The Company has three classes of common stock: Class A, Class B and Class C. The holders of Class A common stock, Class B common stock and Class C common stock are entitled to share equally, on a per share basis, in dividends or other distributions. Class A common stockholders are entitled to one vote per share held. Class B and Class C common stockholders have no voting rights, except as otherwise provided by law. In the event of the voluntary liquidation or dissolution of the Company, each class of stock will share equally, on a per share basis, in all the assets of the Company that are available for distribution to stockholders.

Conversion Features

On May 2, 2017, all of the Class B common stock outstanding shares, upon completion of our initial public offering, were converted to Class A common stock.

Shares of Class C common stock may be converted, upon the election of holders of such shares of Class C common stock, into the same number of shares of Class A common stock under certain circumstances as provided in the Company’s certificate of incorporation.

On July 26, 2017, all of the Class C common stock outstanding shares, upon the election of holders of such shares of Class C common stock, were converted to Class A common stock.

Stock Incentive Plans

 On January 13, 2011, the Company adopted the 2011 Stock Option Plan (as amended, restated, supplemented or otherwise modified from time to time, the “2011 Plan”) to provide for the grant of stock options to employees (including officers), consultants and non‑employee directors of the Company and its subsidiaries. Pursuant to the terms of the 2011 Plan, the Company was authorized to grant options for the purchase of up to 12,520,407 shares as of December 29, 2016 and 10,780,970 shares as of December 31, 2015. As of December 29, 2016 and December 31, 2015, there were 179,575 and 104,269 shares available for grant pursuant to awards under the 2011 Plan, respectively.

We ceased granting awards under the 2011 Plan upon the implementation of the 2017 Plan, described below.

On April 13, 2017, the board of directors approved the Floor & Decor Holdings, Inc. 2017 Stock Incentive Plan (the “2017 Plan”), which was subsequently approved by the Company’s stockholders. The 2017 Plan authorizes the Company to grant options and restricted stock awards to eligible employees (including officers), consultants and non-employee directors up to an aggregate of 5,000,000 shares of Class A common stock. In connection with the IPO, the Company granted options to purchase an aggregate of 1,254,465 shares of our Class A common stock to certain of our eligible employees and 15,475 shares of restricted stock to certain of our non-employee directors, in each case pursuant to the 2017 Plan and based on the public offering price of $21.00 per share. As of December 27, 2018 and December 28, 2017, there were 2,850,768 and 3,690,255 shares available for grant pursuant to awards under the 2017 Plan, respectively.

Secondary Offerings

On July 25, 2017, certain of the Company’s stockholders completed a secondary public offering (the “July Secondary Offering”) of an aggregate of 10,718,550 shares of common stock at a price to the public of $40.00 per share. The Company did not sell any shares in the July Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders.

On November 20, 2017, certain of the Company’s stockholders completed a secondary public offering (the “November Secondary Offering”) of an aggregate of 7,475,000 shares of common stock at a price to the public of $36.00 per share. The Company did not sell any shares in the November Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders.

On May 29, 2018, certain of the Company’s stockholders completed a secondary public offering (the “May Secondary Offering”) of an aggregate of 10,000,000 shares of common stock at a price to the public of $45.80 per share. The Company did not sell any shares in the May Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders.

On September 14, 2018, certain of the Company’s stockholders completed a secondary public offering (the “September Secondary Offering”) of an aggregate of 11,500,000 shares of common stock at a price to the public of $37.25 per share. The Company did not sell any shares in the September Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders.

Stock Options

The Company accounts for stock‑based compensation pursuant to ASC 718, Compensation – Stock Compensation, which requires measurement of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of forfeitures, over the requisite service period for awards expected to vest.

Stock options are granted with an exercise price greater than or equal to the fair market value on the date of grant, as authorized by the Company’s board of directors or compensation committee. Options granted have vesting provisions ranging from one to five years, and contractual terms of ten years. Stock option grants are generally subject to forfeiture if employment terminates prior to vesting.

The fair value of stock option awards granted was estimated using the Black‑Scholes pricing model with the following weighted‑average assumptions:

 

The Company estimates the volatility of the share price of its common stock by considering the historical volatility of the stock of similar public entities. In determining the appropriateness of the public entities included in the volatility assumption the Company considered a number of factors, including the entity’s life cycle stage, growth profile, size, financial leverage and products offered.

The table below summarizes the changes in all stock options for the following periods:

The intrinsic value for stock options is defined as the difference between the exercise price and the value of the Company’s common stock (on a minority, non‑marketable basis). The per share value of the Company’s common stock as of December 27, 2018, was $26.01. The intrinsic value of stock options exercised was $87,151 thousand and $62,508 thousand for the years ended December 27, 2018 and December 28, 2017, respectively. The aggregate intrinsic value of stock options outstanding as of December 27, 2018, was $165,404 thousand with a weighted‑average remaining contractual life of 5.3 years. The aggregate intrinsic value of stock options exercisable as of December 27, 2018, was $133,485 thousand with a weighted‑average remaining contractual life of 3.8 years. The Company’s total unrecognized compensation cost related to stock options as of December 27, 2018, was $26,135 thousand, which is expected to be recognized over a weighted average period of 3.5 years.

Restricted Stock

During fiscal 2018, we granted 10,165 shares of restricted stock to certain of our non-employee directors. Restricted stock granted have vesting provisions ranging from two to four years, and the aggregate fair value of restricted stock outstanding as of December 27, 2018, was $566 thousand. As of December 27, 2018, there were 21,775 shares of restricted stock outstanding. The Company’s total unrecognized compensation cost related to restricted stock as of December 27, 2018, was $489 thousand, which is expected to be recognized over a weighted average period of 2.0 years.

During fiscal 2017, we granted 15,475 shares of restricted stock to certain of our non-employee directors. Restricted stock granted had vesting provisions of four years, and the aggregate fair value of restricted stock outstanding as of December 28, 2017, was $767 thousand. As of December 28, 2017, there were 15,475 shares of restricted stock outstanding. The Company’s total unrecognized compensation cost related to restricted stock as of December 28, 2017, was $270 thousand, which is expected to be recognized over a weighted average period of 3.3 years.

Employee Stock Purchase Plan

At our 2018 annual meeting of stockholders held on May 17, 2018, our stockholders approved the Floor & Decor Holdings, Inc. Employee Stock Purchase Plan (the “ESPP”), which became available to substantially all of our employees beginning in the third quarter of fiscal 2018. The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code, and it permits eligible employees to purchase shares of our common stock through payroll deductions, subject to certain limitations. The purchase price of the shares under the ESPP in no event will be less than the lesser of 85% of the lower of the fair market value of our common stock on either the first or last trading day of each six-month offering period. There are 1,500,000 shares of our Class A common stock, par value $0.001 per share, approved for issuance under the ESPP. As of December 27, 2018, eligible employees contributed $1.4 million to purchase shares, and during fiscal 2018, the Company recognized $333 thousand of stock-based compensation expense related to the ESPP.