NOTE 9 – SHARE BASED COMPENSATION

Monro currently grants stock option awards under the 2007 Incentive Stock Option Plan (the “2007 Plan”). The 2007 Plan was authorized by the Board of Directors in June 2007, initially reserving 873,000 shares (as retroactively adjusted for stock splits) of Common Stock for issuance to eligible employees and all non-employee directors. The 2007 Plan was approved by shareholders in August 2007. Prior to fiscal 2008, Monro had options outstanding under three other stock option plans: the 1994 Non-Employee Directors Stock Option Plan (the “1994 Plan”) (which was approved by shareholders in August 1995); the 1998 Incentive Stock Option Plan (the “1998 Plan”) (which was approved by shareholders in August 1999); and the 2003 Non-Employee Directors Stock Option Plan (the “2003 Plan”) (which was approved by shareholders in August 2003), collectively the “Prior Plans”. Upon shareholder approval of the 2007 Plan, all shares of Common Stock available for award under the 1998 and 2003 Plans were transferred to, and made available for award under the 2007 Plan. The 1994 Plan had no options available for grant upon adoption of the 2007 Plan. No further option grants may be made under the Prior Plans, although outstanding awards under the Prior Plans will remain outstanding in accordance with the terms of those plans and the stock option agreements entered into under those plans.

The 1994 Plan had a total of 675,345 common shares authorized for issuance; the 1998 Plan had a total of 4,016,250 shares authorized for issuance; and the 2003 Plan had a total of 315,000 shares authorized for issuance (all as retroactively adjusted for stock splits). Upon authorization of the 2007 Plan by shareholders, 628,620 shares (as retroactively adjusted for stock splits) were transferred from the 1998 and 2003 Plans into the 2007 Plan, bringing the total authorized shares to 1,501,620 (as retroactively adjusted for stock splits). In addition, in May 2013 and 2010, the Compensation Committee of the Board of Directors authorized an additional 2,000,000 and 1,500,000 shares (as retroactively adjusted for stock splits), respectively, of common stock for grant under the 2007 Plan, which were approved by shareholders in August 2013 and August 2010, respectively. At March 25, 2017, there were a total of 5,001,620 shares authorized for grant under the 2007 Plan (as retroactively adjusted for stock splits), including the shares transferred from the 1998 and 2003 Plans.

Generally, employee options vest over a four year period, and have a duration of six to ten years. Outstanding options are exercisable for various periods through March 2023.

A summary of changes in outstanding stock options is as follows:



	Weighted
	Average
	Exercise		Options
	Price		Outstanding
At March 29, 2014	$	31.58	1,773,401
Granted	$	52.73	211,225
Exercised	$	31.98	(439,635)
Canceled	$	43.04	(26,661)
At March 28, 2015	$	34.21	1,518,330
Granted	$	62.28	243,410
Exercised	$	29.59	(549,141)
Canceled	$	50.69	(23,808)
At March 26, 2016	$	41.75	1,188,791
Granted	$	62.01	232,560
Exercised	$	31.61	(485,660)
Canceled	$	61.20	(39,347)
At March 25, 2017	$	51.67	896,344

The total shares exercisable at March 25, 2017, March 26, 2016 and March 28, 2015 were 563,109, 789,422 and 1,098,601, respectively. The weighted average exercise price of all shares exercisable at March 25, 2017 was $46.61. There were 1,549,716 shares available for grant at March 25, 2017.

The weighted average contractual term of all options outstanding at March 25, 2017 and March 26, 2016 was 3.1 years and 3.0 years, respectively. The aggregate intrinsic value of all options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) outstanding at March 25, 2017 and March 26, 2016 was $4.9 million and $33.2 million, respectively.

The weighted average contractual term of all options exercisable at March 25, 2017 and March 26, 2016 was 2.4 years and 2.5 years, respectively. The aggregate intrinsic value of all options exercisable at March 25, 2017 and March 26, 2016 was $4.8 million and $26.0 million, respectively.

A summary of the status of and changes in nonvested stock options granted is as follows:



		Weighted
		Average
		Grant-Date
		Fair Value
	Options	(per Option)
Non-vested at March 29, 2014	612,829	$	8.88
Granted	211,225	$	11.27
Vested	(382,197)	$	9.22
Canceled	(22,128)	$	10.37
Non-vested at March 28, 2015	419,729	$	9.70
Granted	243,410	$	13.10
Vested	(242,841)	$	10.38
Canceled	(20,929)	$	10.18
Non-vested at March 26, 2016	399,369	$	11.26
Granted	232,560	$	12.17
Vested	(266,112)	$	10.48
Canceled	(32,582)	$	12.79
Non-vested at March 25, 2017	333,235	$	12.37

The following table summarizes information about stock options outstanding at March 25, 2017:



	Options Outstanding				Options Exercisable
		Weighted	Weighted			Weighted
		Average	Average		Shares	Average
Range of	Shares	Remaining	Exercise		Under	Exercise
Exercise Prices	Under Option	Life	Price		Option	Price
$11.76 - $44.49	269,881	1.36	$	34.36	255,924	$	33.83
$44.50 - $57.25	241,393	3.28	$	53.45	122,843	$	52.05
$57.26 - $62.53	219,635	4.23	$	60.13	108,217	$	59.03
$62.54 - $75.76	165,435	4.24	$	66.10	76,125	$	63.18

During the fiscal years ended March 25, 2017, March 26, 2016 and March 28, 2015, the fair value of awards vested under Monro’s stock plans was $2.8 million, $2.5 million and $3.5 million, respectively.

The aggregate intrinsic value is based on Monro’s closing stock price of $52.15, $69.68 and $64.96 as of the last trading day of the periods ended March 25, 2017, March 26, 2016 and March 28, 2015, respectively. The aggregate intrinsic value of options exercised during the fiscal years ended March 25, 2017, March 26, 2016 and March 28, 2015 was $13.3 million, $22.3 million and $10.3 million, respectively. As of March 25, 2017, there was $3.2 million of unrecognized compensation expense related to non-vested fixed stock options that is expected to be recognized over a weighted average period of approximately three years.

Cash received from option exercises under all stock option plans was $3.5 million, $8.6 million and $8.7 million for the fiscal years ended March 25, 2017, March 26, 2016 and March 28, 2015, respectively. The actual tax benefit realized for the tax deductions from option exercises was $3.5 million, $6.7 million and $2.2 million for the fiscal years ended March 25, 2017, March 26, 2016 and March 28, 2015, respectively.

Monro issues new shares of Common Stock upon the exercise of stock options.