On March 5, 2014, our Board of Directors approved and adopted the 2014 Omnibus Equity and Incentive Compensation Plan (“Omnibus Plan”). The Omnibus Plan was approved by our shareholders on May 21, 2014. The Omnibus Plan authorizes the compensation committee of the Board of Directors to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents and other awards for the purpose of providing our officers, key employees, and non-employee directors’ incentives and rewards for performance. The Omnibus Plan replaced the Flowers Foods’ 2001 Equity and Performance Incentive Plan, as amended and restated as of April 1, 2009 (“EPIP”), the Stock Appreciation Rights Plan, and the Annual Executive Bonus Plan. All outstanding equity awards that were made under the EPIP will continue to be governed by the EPIP; however, all equity awards granted after May 21, 2014 are governed by the Omnibus Plan. No additional awards will be issued under the EPIP. Awards granted under the Omnibus Plan are limited to the authorized amount of 8,000,000 shares.

The EPIP authorized the compensation committee of the Board of Directors to make awards of options to purchase our common stock, restricted stock, performance stock and units and deferred stock. The company’s officers, key employees and non-employee directors (whose grants are generally approved by the full Board of Directors) were eligible to receive awards under the EPIP. Over the life of the EPIP, the company issued options, restricted stock and deferred stock.

The following is a summary of stock options, restricted stock, and deferred stock outstanding under the plans described above. Information relating to the company’s stock appreciation rights, which were issued under a separate stock appreciation right plan, is also described below. There were no share-based payment grants to employees during fiscal 2018.

The company issued nonqualified stock options (“NQSOs”) during fiscal years 2011 and prior that have all been fully exercised. Fiscal 2018 was the last year NQSOs were exercised.

The stock option activity for fiscal years 2018 and 2017 pursuant to the EPIP is set forth below (amounts in thousands, except price data):

	Fiscal 2018					Fiscal 2017
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		73		$	10.87		1,846		$	10.89
Exercised		(73	)	$	10.87		(1,773	)	$	10.89
Outstanding at end of year		—		$	—		73		$	10.87
Exercisable at end of year		—					73

The cash received, the windfall tax benefits, and intrinsic value from stock option exercises for fiscal years 2018 and 2017 are set forth below (amounts in thousands):

Since 2012, certain key employees have been granted performance-contingent restricted stock under the EPIP and the Omnibus Plan in the form of TSR Shares. Awards granted prior to fiscal 2019 vested approximately two years from the date of grant (after the filing of the company’s Annual Report on Form 10-K) while the awards granted during fiscal 2019 vest approximately three years from the date of grant. These shares become non-forfeitable if, and to the extent that, on that date the vesting conditions are satisfied. The total shareholder return (“TSR”) is the percent change in the company’s stock price over the measurement period plus the dividends paid to shareholders. The performance payout is calculated at the end of each of the last four quarters (averaged) in the measurement period. Once the TSR is determined for the company (“Company TSR”), it is compared to the TSR of our food company peers (“Peer Group TSR”). The Company TSR compared to the Peer Group TSR will determine the payout as set forth below (the “TSR Modifier”):

For performance between the levels described above, the degree of vesting is interpolated on a linear basis. The table below presents the payout percentage for each of the TSR awards:

The TSR shares vest immediately if the grantee dies or becomes disabled. However, if the grantee retires at age 65 (or age 55 with at least 10 years of service with the company) or later, on the normal vesting date the grantee will receive a pro-rated number of shares based upon the retirement date and measured at the actual performance for the entire performance period. In addition, if the company undergoes a change in control, the TSR shares will immediately vest at the target level, provided that if 12 months of the performance period have been completed, vesting will be determined based on Company TSR as of the date of the change in control without application of four-quarter averaging. During the vesting period, the grantee has none of the rights of a shareholder. Dividends declared during the vesting period will accrue and will be paid at vesting on the shares that ultimately vest. The fair value estimate was determined using a Monte Carlo simulation model, which utilizes multiple input variables to estimate the probability of the company achieving the market condition discussed above. Inputs into the model included the following for the company and comparator companies: (i) TSR from the beginning of the performance cycle through the measurement date; (ii) volatility; (iii) risk-free interest rates; and (iv) the correlation of the comparator companies’ TSR. The inputs are based on historical capital market data.

On May 23, 2019, the company’s CEO received an award of TSR Shares that brings his total grant equal to the CEO’s target award (“promotion award”). This grant is measured under the same guidelines as the December 30, 2018 grant of TSR Shares described above. The company’s former CEO forfeited 112,840 TSR shares at his retirement on May 23, 2019.

The following performance-contingent TSR Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant date	December 30, 2018		May 23, 2019		July 14, 2019		October 6, 2019
Shares granted		440		11		5		2
Assumed vesting date	3/1/2022		3/1/2022		3/1/2022		3/1/2022
Fair value per share	$	21.58	$	27.23	$	23.32	$	22.52

As of December 28, 2019, there was $5.0 million of total unrecognized compensation cost related to nonvested TSR Shares granted under the Omnibus Plan. That cost is expected to be recognized over a weighted-average period of 2.17 years. There were no TSR Shares granted by our Board of Directors in fiscal 2018.

Since 2012, certain key employees have been granted performance-contingent restricted stock under the EPIP and the Omnibus Plan in the form of ROIC Shares. Awards granted prior to fiscal 2019 vested approximately two years from the date of grant (after the filing of the company’s Annual Report on Form 10-K) while the awards granted during fiscal 2019 vest approximately three years from the date of grant. These shares become non-forfeitable if, and to the extent that, on that date the vesting conditions are satisfied. Return on Invested Capital is calculated by dividing our profit, as defined, by the invested capital (“ROIC”). Generally, the performance condition requires the company’s average ROIC to exceed its average weighted cost of capital (“WACC”) by between 1.75 to 4.75 percentage points (the “ROI Target”) over the three fiscal year performance period. If the lowest ROI Target is not met, the awards are forfeited. The shares can be earned based on a range from 0% to 125% of target as defined below (the “ROIC Modifier”):

For performance between the levels described above, the degree of vesting is interpolated on a linear basis. The table below presents the payout percentage for each of the ROIC awards:

The ROIC Shares vest immediately if the grantee dies or becomes disabled. However, if the grantee retires at age 65 (or age 55 with at least 10 years of service with the company) or later, on the normal vesting date the grantee will receive a pro-rated number of shares based upon the retirement date and actual performance for the entire performance period. In addition, if the company undergoes a change in control, the ROIC Shares will immediately vest at the target level. During the vesting period, the grantee has none of the rights of a shareholder. Dividends declared during the vesting period will accrue and will be paid at vesting on the shares that ultimately vest. The fair value of this type of award is equal to the stock price on the grant date. Since these awards have a performance condition feature the expense associated with these awards may change depending on the expected ROI Target attained at each reporting period. The expected ROI Target for expense calculations at December 28, 2019 was 100% for the 2019 award.

On May 23, 2019, the company’s CEO received a promotion award of ROIC Shares. This grant is measured under the same guidelines as the December 30, 2018 grant of ROIC Shares described above. The company’s former CEO forfeited 112,840 ROIC shares at his retirement on May 23, 2019.

The following performance-contingent ROIC Shares have been granted under the Omnibus Plan and have service period remaining (amounts in thousands, except price data):

Grant date	December 30, 2018		May 23, 2019		July 14, 2019		October 6, 2019
Shares granted		440		11		5		2
Assumed vesting date	3/1/2022		3/1/2022		3/1/2022		3/1/2022
Fair value per share	$	18.29	$	23.08	$	23.32	$	22.52

As of December 28, 2019, there was $4.3 million of total unrecognized compensation cost related to nonvested ROIC Shares granted under the Omnibus Plan. This cost is expected to be recognized over a weighted-average period of 2.17 years. There were no ROIC Shares granted by our Board of Directors in fiscal 2018.

The table below presents the TSR Modifier share adjustment, ROIC Modifier share adjustment, accumulated dividends on vested shares, and the tax windfall/shortfall at vesting of the performance-contingent restricted stock awards (amounts in thousands except for share data):

Award granted	Fiscal year vested	TSR Modifier increase/(decrease) shares			ROIC Modifier increase/(decrease) shares			Dividends at vesting (thousands)		Tax benefit/(expense)			Fair value at vesting
2017	2019		205,686			(97,131	)	$	1,219	$	936		$	18,570
2016	2018		(333,112	)		(114,190	)	$	405	$	(2,130	)	$	6,504
2015	2017		(378,219	)		(49,272	)	$	392	$	(3,103	)	$	6,316

A summary of the status of all of the company’s nonvested shares for performance-contingent restricted stock (including the TSR Shares and the ROIC Shares) for fiscal 2019, 2018, and 2017 is set forth below (amounts in thousands, except price data):

	Fiscal 2019					Fiscal 2018					Fiscal 2017
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Balance at beginning of year		779		$	21.64		1,575		$	22.20		1,543		$	21.53
Initial grant		917		$	20.10		—		$	—		855		$	21.61
Vested		(885	)	$	22.21		(314	)	$	21.89		(329	)	$	19.14
Grant reduction for not achieving the ROIC modifier		(97	)	$	19.97		(114	)	$	21.49		(49	)	$	19.14
Grant increase (reduction) for not achieving the TSR modifier		206		$	23.31		(333	)	$	24.17		(378	)	$	21.21
Forfeitures		(258	)	$	20.18		(35	)	$	22.83		(67	)	$	21.08
Balance at end of year		662		$	20.16		779		$	21.64		1,575		$	22.20

As of December 28, 2019, there was $9.2 million of total unrecognized compensation cost related to nonvested restricted stock granted under the Omnibus Plan. This cost is expected to be recognized over a weighted-average period of 2.17 years.

Certain key employees have been granted time-based restricted stock units (“TBRSU Shares”). These awards vest on the fifth of January each year in equal installments over a three-year period beginning in fiscal 2020. Dividends earned on shares are held by the company during the vesting period and paid in cash when the awards vest and shares are distributed.

On May 23, 2019, the company’s CEO was granted TBRSU Shares of approximately $1.0 million pursuant to the Omnibus Plan. This award will vest 100% on the fourth anniversary of the date of grant provided the CEO remains employed by the company during this period. Vesting will also occur in the event of the CEO’s death or disability, but not his retirement if prior to the fourth anniversary of the grant date. Dividends will accrue on the award and will be paid to the CEO on the vesting date for all shares that vest. There were 43,330 shares issued for this award at a fair value of $23.08 per share.

The following TBRSU Shares have been granted under the Omnibus Plan and have service periods remaining (amounts in thousands, except price data):

The TBRSU Shares activity for fiscal 2019 is set forth below (amounts in thousands, except price data):

	Fiscal 2019
	Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		—		$	—
Granted		288		$	19.01
Forfeitures		(18	)	$	18.29
Nonvested shares at end of year		270		$	19.06

Non-employee directors may convert their annual board retainers into deferred stock equal in value to 100% of the cash payments directors would otherwise receive and the vesting period is a one-year period to match the period of time that cash would have been received if no conversion existed. Accumulated dividends are paid upon delivery of the shares. Non-employee directors received aggregate grants of 2,707 common shares for board retainer deferrals during fiscal 2019. A total of 15,822 common shares were vested and issued for previous board retainer deferrals.

Non-employee directors also receive annual grants of deferred stock. This deferred stock vests over one year from the grant date. During fiscal 2019, non-employee directors were granted an aggregate of 46,240 shares of deferred stock pursuant to the Omnibus Plan for the annual grant. The deferred stock will be distributed to the grantee at a time designated by the grantee at the date of grant.

Compensation expense is recorded on deferred stock over the vesting period. During fiscal 2019, a total of 66,270 previously deferred shares were issued after the deferral period.

The deferred and restricted stock activity for fiscal years 2019, 2018, and 2017 is set forth below (amounts in thousands, except price data):

	Fiscal 2019					Fiscal 2018					Fiscal 2017
	Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value		Number of Shares			Weighted Average Fair Value
Nonvested shares at beginning of year		66		$	19.93		87		$	18.70		149		$	20.39
Granted		49		$	22.31		78		$	19.90		87		$	18.70
Vested		(66	)	$	19.93		(99	)	$	18.70		(149	)	$	20.39
Nonvested shares at end of year		49		$	22.31		66		$	19.93		87		$	18.70
Vested and deferred shares at end of year		197					198					192

As of December 28, 2019, there was $0.4 million of total unrecognized compensation cost related to deferred and restricted stock awards. This cost is expected to be recognized over a weighted-average period of 0.42 years. The intrinsic value of deferred stock awards that vested during fiscal 2019 was $1.4 million. There was an immaterial tax windfall on the exercise of deferred share awards during fiscal 2019.

The following table summarizes the company’s stock-based compensation expense, all of which was recognized in selling, distribution, and administration expense, for fiscal years 2019, 2018, and 2017 (amounts in thousands):

	Fiscal 2019		Fiscal 2018		Fiscal 2017
Performance-contingent restricted stock awards	$	4,767	$	6,504	$	14,326
TBRSU shares		1,520		—		—
Deferred stock awards		1,143		1,644		1,767
Total stock-based compensation expense	$	7,430	$	8,148	$	16,093