Vesting of restricted stock and RSU awards is conditional based on continued employment or service for a specified period and, in certain circumstances, the attainment of performance goals. With respect to restricted stock and RSU awards, we retain the shares underlying the award, and any dividends paid thereon, until the vesting conditions have been met. For time-based restricted stock and RSU awards, compensation cost related to the stock is recognized on a straight-line basis over the vesting period and is calculated using the closing price per share of our common stock on the grant date. For performance-based restricted stock and RSU awards tied to growth in adjusted pre-tax income, compensation cost related to the award is recognized over the performance period and is calculated using the closing price per share of our common stock on the grant date and an estimate of the probable outcome of the performance conditions at each reporting date. Since 2019, we have granted performance-based restricted stock and RSU awards that vest based on our total shareholder return ranking relative to the total shareholder return of the companies comprising the S&P Mid-Cap 400 Growth Index over a three-year performance period. For performance-based restricted stock and RSU awards tied to total shareholder return, compensation cost related to the award is recognized on a straight-line basis over the performance period and is calculated using the simulated fair value per share of our common stock based on the application of a Monte Carlo simulation model.

Compensation cost related to restricted stock and RSU awards was $1.0 million and $0.8 million for the three months ended September 26, 2020 and September 28, 2019, respectively, and $3.0 million and $2.3 million for the nine months ended September 26, 2020 and September 28, 2019, respectively. The compensation costs were classified as selling, general and administrative expense in the Condensed Consolidated Statements of Operations.

The following table summarizes our restricted stock and RSU award activity for the nine months ended September 26, 2020:

	Shares			Weighted Average Price
Balance at December 28, 2019		177,491		$	76.70
Granted		82,905		$	63.02
Vested		(25,314	)	$	70.89
Cancelled		(27,703	)	$	77.41
Balance at September 26, 2020		207,379		$	71.84

As of September 26, 2020, there was $7.9 million of unrecognized compensation cost related to unvested restricted stock and RSU awards that is expected to be recognized over a weighted-average period of approximately 2.5 years.

Cash flows resulting from tax deductions in excess of the tax effect of compensation cost recognized in the financial statements are classified as operating cash flows. The excess tax benefit generated from restricted stock and RSU awards that vested was not significant during the nine months ended September 26, 2020 and September 28, 2019, respectively.

We expense the grant-date fair value of stock options as compensation on a straight-line basis over the vesting period for which related services are performed. The compensation cost charged against income was $0.3 million and $0.2 million for the three months ended September 26, 2020 and September 28, 2019, respectively, and $0.8 million and $0.5 million for the nine months ended September 26, 2020 and September 28, 2019, respectively. The compensation costs were classified as Selling, general and administrative expense in the Condensed Consolidated Statements of Operations. No cost was capitalized during the nine months ended September 26, 2020 or September 28, 2019.

We use the Black-Scholes option valuation model to estimate the fair value of stock options granted. Expected volatility and expected dividend yield are based on the actual historical experience of our common stock. The expected life represents the period of time that options granted are expected to be outstanding and was calculated using historical option exercise data. The risk-free rate was based on a U.S. Treasury security with terms equal to the expected time of exercise as of the grant date. During the nine months ended September 26, 2020 and September 28, 2019, we granted 109,352 and 38,670 stock options, respectively.

The following table summarizes our stock option activity for the nine months ended September 26, 2020:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Term (In years)		Aggregate Intrinsic Value
Balance at December 28, 2019		181,712		$	70.78
Granted		109,352		$	63.25
Forfeited		(8,764	)	$	65.24
Exercised		(6,630	)	$	56.52
Balance at September 26, 2020		275,670		$	68.32		4.7	$	4,695,637
Options exercisable at September 26, 2020		99,017		$	65.99		2.2	$	1,917,351

Options to purchase 6,630 and 35,401 shares of common stock were exercised during the nine months ended September 26, 2020 and September 28, 2019, respectively. As of September 26, 2020, there was $2.7 million of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of 2.9 years.

Cash received from stock option exercises was not significant during the nine months ended September 26, 2020 and September 28, 2019.

There was no excess tax benefit generated from stock options exercised in the nine months ended September 26, 2020 or September 28, 2019.

In May 2017, our shareholders approved the Dorman Products, Inc. Employee Stock Purchase Plan (the “ESPP”), which provides up to 1,000,000 shares of our common stock for sale to eligible employees. The purpose of the ESPP, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions and limited cash contributions by our employees. These contributions are used to purchase shares of the Company’s common stock at a 15% discount from the lower of the market price at the beginning or end of the purchase window. There were no shares purchased under the ESPP plan during the three months ended September 26, 2020 and September 28, 2019 as a result of the timing of the end of the purchase windows. There were 10,735 shares and 13,669 shares purchased under the ESPP plan during the nine months ended September 26, 2020, and nine months ended September 28, 2019, respectively. During both the three months ended September 26, 2020 and September 28, 2019, compensation cost under the ESPP was $0.1 million. During both the nine months ended September 26, 2020 and September 28, 2019, compensation cost under the ESPP was $0.3 million and $0.2 million, respectively.