The Company has in effect stock incentive plans under which stock-based awards have been granted to certain employees and members of its Board of Directors. Under these existing plans, the Company may grant stock options, restricted stock awards, and performance stock awards. Approximately 1.5 million shares were available for future stock incentive awards at December 25, 2021.

During the years ended December 25, 2021, December 26, 2020, and December 28, 2019, the Company recognized stock-based compensation, as a component of selling, general, and administrative expense, in its Consolidated Statements of Income of $9.8 million, $8.6 million, and $8.7 million, respectively.

The total compensation expense not yet recognized related to stock incentive awards at December 25, 2021 was $21.0 million, with an average expense recognition period of 2.7 years.

The Company generally issues treasury shares when stock options are exercised, or when restricted stock awards or performance stock awards are granted. A summary of the activity and related information follows:


	Stock Options			Restricted Stock Awards			Performance Stock Awards
(Shares in thousands)	Shares	Weighted Average Exercise Price		Shares	Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value

Beginning of period	793	$	26.81	706	$	30.89	$	495	$	30.50
Granted	28	46.19		91	44.08		142		43.46
Exercised/Released	(194)	24.20		(217)	32.39		—		—
Forfeited	(12)	31.83		(3)	34.20		(13)		29.61

End of period	615	$	28.42	577	$	32.40	624		$	33.46

Stock options are generally granted to purchase shares of common stock at an exercise price equal to the average of the high and low market price of the Company’s stock on the grant date. Generally, the awards vest within five years from the grant date. Any unexercised options expire after not more than ten years. The fair value of each option is estimated as a single award and amortized into compensation expense on a straight-line or accrual basis over its vesting period based on its vesting schedule.

The Company estimates the fair value of all stock option awards as of the grant date by applying the Black-Scholes-Merton option pricing model. The use of this valuation model in the determination of compensation expense involves certain assumptions that are judgmental and/or highly sensitive including the expected life of the option, stock price volatility, risk-free interest rate, and dividend yield. Additionally, forfeitures are not estimated at the time of valuation; they are recognized as they occur. The weighted average of key assumptions used in determining the fair value of options granted and a discussion of the methodology used to develop each assumption are as follows:


	2021			2020			2019

Fair value of stock options on grant date	$	15.60		$	6.81		$	8.78
Expected term	7.9 years			7.9 years			7.8 years
Expected price volatility	33.6		%	31.9		%	28.6		%
Risk-free interest rate	1.3		%	0.6		%	2.4		%
Dividend yield	1.1		%	1.7		%	1.4		%

Expected term – This is the period of time estimated based on historical experience over which the options granted are expected to remain outstanding. An increase in the expected term will increase compensation expense.

Expected price volatility – This is a measure of the amount by which a price has fluctuated or is expected to fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility assumption. Daily market value changes from the grant date over a past period representative of the expected term of the options are used. An increase in the expected price volatility rate will increase compensation expense.

Risk-free interest rate – This is the U.S. Treasury rate for the week of the grant, having a term representative of the expected term of the options. An increase in the risk-free rate will increase compensation expense.

Dividend yield – This rate is the annual dividends per share as a percentage of the Company’s stock price. An increase in the dividend yield will decrease compensation expense.

The total intrinsic value of options exercised was $3.8 million, $2.4 million, and $1.6 million in 2021, 2020, and 2019, respectively. The total fair value of options that vested was $0.4 million, $0.7 million, and $1.0 million in 2021, 2020, and 2019.

At December 25, 2021, the aggregate intrinsic value of all outstanding options was $18.5 million with a weighted average remaining contractual term of 4.9 years. Of the outstanding options, 402 thousand are currently exercisable with an aggregate intrinsic value of $12.8 million, a weighted average exercise price of $26.75, and a weighted average remaining contractual term of 4.3 years.

The fair value of each restricted stock award equals the fair value of the Company’s stock on the grant date and is amortized into compensation expense on a straight-line or accrual basis over its vesting period based on its vesting schedule. The weighted average grant-date fair value of awards granted during 2021, 2020, and 2019 was $44.08, $29.00, and $28.64, respectively.

The aggregate intrinsic value of outstanding and unvested awards was $33.7 million at December 25, 2021. The total fair value of awards that vested was $7.0 million, $5.6 million, and $5.6 million in 2021, 2020, and 2019, respectively.

Performance stock awards require achievement of certain performance criteria which are predefined by the Compensation Committee of the Board of Directors at the time of grant. The fair value of each performance stock award equals the fair value of the Company’s stock on the grant date. Performance stock awards are vested and released at the end of the performance period if the predefined performance criteria are achieved.

For all performance stock awards, in the event the certified results equal the predefined performance criteria, the Company will grant the number of shares equal to the target award. In the event the certified results exceed the predefined performance criteria, additional shares up to the maximum award will be granted. In the event the certified results fall below the predefined performance criteria but above the minimum threshold, a reduced number of shares will be granted. If the certified results fall below the minimum threshold, no shares will be granted.

In the period it becomes probable that the minimum threshold specified in the award will be achieved, the Company recognizes expense for the proportionate share of the total fair value of the performance stock awards related to the vesting period that has already lapsed for the shares expected to vest and be released. The remaining fair value of the shares expected to vest and be released is expensed on a straight-line basis over the balance of the vesting period. In the event the Company determines it is no longer probable that it will achieve the minimum threshold specified in the award, all of the previously recognized compensation expense is reversed in the period such a determination is made.