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.

There are approximately 7.0 million shares of common stock authorized for issuance and remaining available under the 2011 Omnibus Incentive Plan as of December 27, 2015. 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 27, 2015 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 $9.4 million in 2015, $8.7 million in 2014 and $7.4 million in 2013. The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements was $3.5 million in 2015, $3.2 million in 2014 and $2.7 million in 2013. At December 27, 2015, there was $7.8 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 $5.3 million in 2016, $2.1 million in 2017 and $330,000 in 2018.

Stock Options

Options exercised, which were issued from authorized shares, included 441,000 shares in 2015, 759,000 shares in 2014 and 697,000 shares in 2013. The total intrinsic value of the options exercised during 2015, 2014 and 2013 was $20.3 million, $25.3 million and $13.1 million, respectively. Cash received upon the exercise of stock options was $5.2 million, $5.8 million and $6.9 million during 2015, 2014 and 2013, respectively, and the related tax benefits realized were approximately $7.5 million, $9.4 million and $4.8 million during the corresponding periods.

Information pertaining to option activity during 2015 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 28, 2014	1,564		$	24.52
Granted	330		64.51
Exercised	(441	)	18.18
Cancelled	(34	)	53.21

Outstanding at December 27, 2015	1,419		$	35.10	6.28	$	31,521

Exercisable at December 27, 2015	817		$	21.77	4.61	$	27,429

The following is a summary of the significant assumptions used in estimating the fair value of options granted in 2015, 2014 and 2013:

	2015		2014		2013

Assumptions (weighted average):
Risk-free interest rate	1.6	%	1.8	%	1.1	%
Expected dividend yield	0.9	%	1.0	%	0.1	%
Expected volatility	28.5	%	35.7	%	37.5	%
Expected term (in years)	5.5		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 five or ten years after grant. The expected term for these options represents the period of time that options granted are expected to be outstanding. The expected term for 2015 was calculated using historical experience and the expected term for 2014 and 2013 was calculated using the simplified method prescribed by Securities and Exchange Commission rules and regulations because the expiration term of our options increased from five to ten years and there was insufficient historical detail to be used to estimate the expected term.

The weighted average grant-date fair values of options granted during 2015, 2014 and 2013 was $16.93, $16.48 and $9.87, respectively. The Company granted options to purchase 330,000, 293,000 and 498,000 shares in 2015, 2014 and 2013, respectively.

Restricted Stock and Restricted Stock Units

We granted shares of restricted stock that are time-based and generally vest in equal installments over three years (76,000 in 2015, 89,000 in 2014 and 157,000 in 2013). Upon vesting, the shares are issued from treasury stock. 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 $110,000 ($0.63 per share) in 2015, $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 stock settled performance-based restricted stock units to executive management (12,000 in 2015, 17,000 in 2014, and 3,000 in 2013). 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. Upon vesting, the shares are issued from authorized shares.

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 these awards during 2015 is as follows (shares in thousands):

			Weighted
			Average
			Grant-Date
	Shares		Fair Value
Total as of December 28, 2014	286		31.81
Granted	88		64.44
Incremental Performance Shares*	70		18.78
Forfeited	(13	)	52.10
Vested	(247	)	24.43

Total as of December 27, 2015	184		$	51.21

*Additional shares from the 2012 performance-based restricted stock unit grant due to exceeding the initial 100% target resulting in a 207% payout.