STOCK-BASED COMPENSATION

We record stock-based compensation expense for restricted and unrestricted stock awards, performance share units, stock options, and shares purchased under an employee stock purchase plan.

Our 2005 Long-Term Equity Incentive Plan, as amended and restated effective May 2013 ("Incentive Plan"), provides for the issuance or delivery of up to 7.95 million shares of our common stock over the full term of the Incentive Plan.

Restricted and unrestricted stock awards and performance share units

Under the Incentive Plan, restricted stock awards are granted to executive officers and key employees and vests annually over three or four years. Unrestricted stock awards granted to our Board of Directors vests immediately. Restricted and unrestricted stock-based compensation expense is calculated based on the grant-date market value. We recognize compensation expense on a straight-line basis over the vesting period, net of estimated forfeitures.

Performance share units have been granted to executive officers and certain key employees. Vesting of the performance share units is contingent upon the achievement of revenue and/or profitability growth goals at the end of each three-year performance period. Each performance share unit is equivalent to one share of common stock. Compensation expense is calculated based on the grant-date market value of our stock and is recognized ratably over the performance period for the performance share units which are expected to vest. Our estimate of the performance units expected to vest is reviewed and adjusted as appropriate each quarter.

Restricted and unrestricted stock awards and performance share units activity for the year ended December 26, 2014, was as follows (shares in thousands):



	Shares		Weighted- average grant-date price
Non-vested at beginning of period	1,544		$	16.66
Granted	544		$	26.02
Vested	(481	)	$	17.84
Forfeited	(60	)	$	19.32
Non-vested at the end of the period	1,547		$	20.03

The weighted average grant-date price of restricted and unrestricted stock awards and performance share units granted during the years 2014, 2013 and 2012 was $26.02, $19.00, and $16.72, respectively. As of December 26, 2014, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $10.2 million, which is estimated to be recognized over a weighted average period of 1.75 years. As of December 26, 2014, total unrecognized stock-based compensation expense related to performance share units was approximately $3.5 million, which is estimated to be recognized over a weighted average period of 1.66 years. The total fair value of restricted shares vested during 2014, 2013 and 2012 was $4.9 million, $4.8 million and $5.3 million, respectively.

Stock options

Our Incentive Plan provides for both nonqualified stock options and incentive stock options (collectively, “stock options”) for directors, officers, and certain employees. We issue new shares of common stock upon exercise of stock options. All of our stock options are vested and expire if not exercised within seven to ten years from the date of grant.

A summary of the weighted average assumptions and results for stock options granted during the year ended December 26, 2014 is as follows:



	December 26, 2014
Expected life (in years)	3.72
Expected volatility	42.8		%
Risk-free interest rate	0.7		%
Expected dividend yield	—		%
Weighted average fair value of options granted during the period	$	8.31

There were no stock options granted during fiscal years 2013 or 2012.

Stock option activity was as follows:



	Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Outstanding, December 27, 2013	74		$	14.99
Granted	7		$	25.26
Exercised	(50	)	$	15.32
Expired/Forfeited	(1	)	$	18.98
Outstanding, December 26, 2014	30		$	16.58	2.87	$	197
Exercisable, December 26, 2014	30		$	16.58	2.87	$	197

The aggregate intrinsic value in the table above is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on the last business day of the period indicated. The closing per share market value of the Company’s stock on December 26, 2014 was $22.65.

The total intrinsic value of options exercised was $0.6 million, $3.0 million, and $1.9 million, in 2014, 2013, and 2012, respectively, determined as of the date of exercise. Cash received from option exercises, net of tax withholdings, during 2014, 2013, and 2012 was $0.8 million, $7.3 million and $2.5 million, respectively. The actual tax benefit realized for the deduction from option exercises was $0.1 million, $1.0 million and $0.6 million in 2014, 2013, and 2012, respectively.

Employee stock purchase plan

Our Employee Stock Purchase Plan (“ESPP”) reserves for purchase 1.0 million shares of common stock. The plan allows eligible employees to contribute up to 10% of their earnings toward the monthly purchase of the Company's common stock. The employee's purchase price is the lesser of 85% of the fair market value of shares on either the first day or the last day of each month. We consider our ESPP to be a component of our stock-based compensation and accordingly we recognize compensation expense over the requisite service period for stock purchases made under the plan. The requisite service period begins on the enrollment date and ends on the purchase date, the duration of which is one month.

The following table summarizes transactions under our ESPP from fiscal years 2014, 2013, and 2012 (shares in thousands):

Stock-based compensation expense

Total stock-based compensation expense, which is included in Selling, general and administrative expenses on our Consolidated Statements of Operations and Comprehensive Income, was $11.1 million, $8.4 million and $7.9 million in 2014, 2013, and 2012, respectively. The related tax benefit was $3.9 million in 2014, and $2.9 million in 2013 and 2012.

Average Price Per
Share

Issued during fiscal year 2014

Issued during fiscal year 2013

Issued during fiscal year 2012