18. Equity Compensation

We award stock options, time-based restricted stock and performance-based restricted stock units from time to time under the Papa John’s International, Inc. 2011 Omnibus Incentive Plan and other such agreements as may arise.

There are approximately 7.5 million shares of common stock authorized for issuance and remaining available under the 2011 Omnibus Incentive Plan as of December 28, 2014, which includes 4.0 million shares transferred from the Papa John’s International, Inc. 2008 Omnibus Incentive Plan. Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Options outstanding as of December 28, 2014 generally expire five or ten years from the date of grant and vest over a three-year period.

We recorded stock-based employee compensation expense of $8.7 million in 2014, $7.4 million in 2013 and $6.9 million in 2012. The total income tax benefit recognized in the income statement for share-based compensation arrangements was $3.2 million in 2014, $2.7 million in 2013 and $2.4 million in 2012. At December 28, 2014, there was $7.0 million of unrecognized compensation cost related to nonvested option awards, time-based restricted stock and performance-based restricted stock units, of which the Company expects to recognize $4.3 million in 2015, $2.0 million in 2016 and $720,000 in 2017.

Stock Options

Options exercised included 759,000 shares in 2014, 697,000 shares in 2013 and 864,000 shares in 2012. The total intrinsic value of the options exercised during 2014, 2013 and 2012 was $25.3 million, $13.1 million and $7.5 million, respectively. Cash received upon the exercise of stock options was $5.8 million, $6.9 million and $12.3 million during 2014, 2013 and 2012, respectively, and the related tax benefits realized were approximately $9.4 million, $4.8 million and $2.6 million during the corresponding periods.

Information pertaining to option activity during 2014 is as follows (number of options and aggregate intrinsic value in thousands):

					Weighted
					Average
			Weighted		Remaining
	Number		Average		Contractual	Aggregate
	of		Exercise		Term	Intrinsic
	Options		Price		(In Years)	Value
Outstanding at December 29, 2013	2,104		$	17.39
Granted	293		49.68
Exercised	(759	)	13.77
Cancelled	(74	)	31.83
Outstanding at December 28, 2014	1,564		$	24.52	5.41	$	48,640
Exercisable at December 28, 2014	893		$	16.55	3.11	$	34,872

The following is a summary of the significant assumptions used in estimating the fair value of options granted in 2014, 2013 and 2012:

	2014		2013		2012

Assumptions (weighted average):
Risk-free interest rate	1.8	%	1.1	%	1.1	%
Expected dividend yield	1.0	%	0.1	%	0.0	%
Expected volatility	35.7	%	37.5	%	37.8	%
Expected term (in years)	6.0		6.0		6.0

The risk-free interest rate for the periods within the contractual life of an option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield was estimated as the annual dividend divided by the market price of the Company’s shares on the date of grant. Expected volatility was estimated by using the Company’s historical share price volatility for a period similar to the expected life of the option.

Options granted generally vest in equal installments over three years and expire ten years after grant. The expected term for these options represents the period of time that options granted are expected to be outstanding and was calculated using the simplified method prescribed by Securities and Exchange Commission rules and regulations as there was insufficient historical detail to be used as an alternative basis to estimating the term.

The weighted average grant-date fair values of options granted during 2014, 2013 and 2012 was $16.48, $9.87 and $7.04, respectively. The Company granted 293,000, 498,000 and 508,000 options in 2014, 2013 and 2012, respectively.

Restricted Stock and Restricted Stock Units

In 2014, 2013 and 2012, we granted shares of restricted stock that were time-based and generally vest in equal installments over three years. These restricted shares are intended to focus participants on our long-range objectives, while at the same time serving as a retention mechanism. We consider time-based restricted stock awards to be participating securities because holders of such shares have non-forfeitable dividend rights. We declared dividends totaling $128,000 ($0.53 per share) in 2014 and $86,000 ($0.25 per share) in 2013 to holders of time-based restricted stock.

Additionally, we granted shares of performance-based restricted stock units to executive management (17,000 in 2014, 3,000 in 2013, and 108,000 in 2012). The vesting of these awards (a three-year cliff vest) is dependent upon the Company’s achievement of a compounded annual growth rate of earnings per share and the achievement of certain sales and unit growth metrics. The performance measures for the 2012 and 2013 grants were achieved and the shares will vest in February 2015.

The fair value of both time-based restricted stock and performance-based restricted stock units is based on the market price of the Company’s shares on the grant date. Information pertaining to restricted stock activity during 2014, 2013 and 2012 is as follows (shares in thousands):

			Weighted
			Average
			Grant-Date
	Shares		Fair Value
Total as of December 25, 2011	500		$	14.10
Granted	266		18.59
Forfeited	(74	)	15.46
Vested	(156	)	13.89
Total as of December 30, 2012	536		16.31
Granted	160		27.09
Forfeited	(70	)	18.56
Vested	(203	)	15.51
Total as of December 29, 2013	423		20.39
Granted	106		49.31
Forfeited	(40	)	27.79
Vested	(203	)	18.05
Total as of December 28, 2014	286		$	31.81