We maintain stock-based incentive plans under which incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares and restricted share units may be granted to staff members, consultants and non-employee directors. Our current practice is to issue new shares, rather than treasury shares, upon stock option exercises, for restricted share grants and upon vesting of restricted share units. To date, we have only granted non-qualified stock options, restricted shares and restricted share units of common stock under these plans.

On April 5, 2017, our Board approved an amendment to our 2010 Stock Incentive Plan to increase the number of shares of common stock reserved for grant under the plan to 12.7 million shares from 9.2 million shares. This amendment was approved by our stockholders at our annual meeting held on June 8, 2017. On April 4, 2019, our Board adopted The Cheesecake Factory Incorporated Stock Incentive Plan. This plan was approved by our stockholders at our annual meeting held on May 30, 2019. The maximum number of shares of common stock available for grant under this plan is 4.8 million shares plus 1.8 million shares, which, as of May 30, 2019, were available for issuance under our 2010 Stock Incentive Plan, plus 1.9 million shares which may become available for issuance under The Cheesecake Factory Incorporated Stock Incentive Plan due to forfeiture or lapse of awards under our 2010 Stock Incentive Plan following May 30, 2019. Approximately 4.9 million of these shares were available for grant as of December 29, 2020.

Stock options generally vest at 20% per year and expire eight to ten years from the date of grant. Restricted shares and restricted share units generally vest between three to five years from the date of grant and require that the staff member remains employed in good standing with the Company as of the vesting date. Certain restricted share units granted to executive officers contain performance-based vesting conditions. Performance goals are determined by the Board of Directors. The quantity of units that will vest ranges from 0% to 150% based on the level of achievement of the performance conditions. Equity awards for certain executive officers may vest earlier in the event of a change of control in which the acquirer fails to assume or continue such awards, as defined in the plan, or under certain circumstances described in such executive officers’ respective employment agreements. Compensation expense is recognized only for those options, restricted shares and restricted share units expected to vest, with forfeitures estimated based on our historical experience and future expectations.

The following table presents information related to stock-based compensation, net of forfeitures (in thousands):

(1)

It is our policy to capitalize the portion of stock-based compensation costs for our internal development department that relates to capitalizable activities such as the design and construction of new restaurants, remodeling existing locations and equipment installation. Capitalized stock-based compensation is included in property and equipment, net on the consolidated balance sheets.

Stock Options

The weighted-average fair value at the grant date for options issued during fiscal 2020, 2019 and 2018 was $6.66, $9.84 and $11.62 per share, respectively. The fair value of options was estimated utilizing the Black-Scholes valuation model with the following weighted-average assumptions for fiscal 2020, 2019 and 2018, respectively: (a) an expected option term of 6.9 years in all fiscal years presented, (b) expected stock price volatility of 25.7%, 26.3% and 27.8%, (c) a risk-free interest rate of 1.5%, 2.6% and 2.8%, and (d) a dividend yield on our stock of 3.6%, 2.9% and 2.5%.

The expected option term represents the estimated period of time until exercise and is based on historical experience of similar options, giving consideration to the contractual terms, vesting schedules and expectations of future staff member behavior. Expected stock price volatility is based on a combination of the historical volatility of our stock and the implied volatility of actively traded options on our common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with an equivalent remaining term. The dividend yield is based on anticipated cash dividend payouts.

Stock option activity during fiscal 2020 was as follows:


				Weighted
				Average
		Weighted		Remaining	Aggregate
		Average		Contractual	Intrinsic
	Shares	Exercise Price		Term	Value⁽¹⁾
	(In thousands)	(Per share)		(In years)	(In thousands)
Outstanding at beginning of year	1,829	$	47.32	4.3	$	844
Granted	654	$	40.16
Exercised	(18)	$	34.38
Forfeited or cancelled	(171)	$	47.75
Outstanding at end of year	2,294	$	45.35	5.0	$	307

Exercisable at end of year	1,121	$	46.77	2.4	$	307

(1)

Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal year end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised their options on the fiscal year-end date.

The total intrinsic value of options exercised during fiscal 2020, 2019 and 2018 was $0.1 million, $4.3 million and 6.2 million, respectively. As of December 29, 2020, total unrecognized stock-based compensation expense related to unvested stock options was $7.0 million, which we expect to recognize over a weighted-average period of approximately 3.3 years.

Restricted Shares and Restricted Share Units

Restricted share and restricted share unit activity during fiscal 2020 was as follows:


		Weighted
		Average
		Fair
	Shares	Value
	(In thousands)	(Per share)
Outstanding at beginning of year	1,764	$	47.76
Granted	763	$	37.94
Vested	(316)	$	49.35
Forfeited	(203)	$	48.54
Outstanding at end of year	2,008	$	43.70

Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant. The weighted-average fair value for restricted shares and restricted share units issued during fiscal 2020, 2019 and 2018 was $37.94, $45.02 and $48.22, respectively. The fair value of shares that vested during fiscal 2020, 2019 and 2018 was $15.6 million, $15.8 million and $17.8 million, respectively. As of December 29, 2020, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $36.0 million, which we expect to recognize over a weighted-average period of approximately 2.9 years.