The cost of all employee stock options, as well as other equity-based compensation arrangements, is reflected in the consolidated statements of income based on the estimated fair value of the awards and is amortized over the requisite service period of each award.

The Company’s current equity incentive plan benefits certain of the Company’s employees and directors and is named the Domino’s Pizza, Inc. 2004 Equity Incentive Plan (the “2004 Equity Incentive Plan”). As of December 29, 2019, the maximum number of shares that may be granted under the 2004 Equity Incentive Plan is 15,600,000 shares of voting common stock of which 2,618,524 shares were authorized for grant but have not been granted.

The Company recorded total

non-cash

compensation expense of $20.3 million, $22.8 million and $20.7 million in 2019, 2018 and 2017, respectively. All

non-cash

compensation expense amounts are recorded in general and administrative expense. The Company recorded a deferred tax benefit related to

non-cash

compensation expense of approximately $3.8 million in 2019 and $4.0 million in 2018.

Stock Options

As of December 29, 2019, the number of stock options granted and outstanding under the 2004 Equity Incentive Plan was 1,546,411 options. Stock options granted in fiscal 20

through fiscal 2012 were granted with an exercise price equal to the market price at the date of the grant, expire ten years from the date of grant and generally vest over three years from the date of grant. Stock options granted in fiscal 2013 through fiscal 2019 were granted with an exercise price equal to the market price at the date of the grant, expire ten years from the date of grant and generally vest over four years from the date of grant. Additionally, all stock options granted become fully exercisable upon vesting. These awards also contain provisions for accelerated vesting upon the retirement of holders that have achieved specific service and age requirements.

Stock option activity related to the 2004 Equity Incentive Plan is summarized as follows:


	Common Stock Options
	Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value
						(Years)		(In thousands)
Stock options at January 1, 2017		2,498,310		$	43.54
Stock options granted		126,720			201.19
Stock options cancelled		(28,991	)		101.97
Stock options exercised		(357,925	)		17.05

Stock options at December 31, 2017		2,238,114		$	55.94
Stock options granted		96,580			266.11
Stock options cancelled		(11,193	)		174.63
Stock options exercised		(414,102	)		23.74

Stock options at December 30, 2018		1,909,399		$	72.86
Stock options granted		96,280			272.64
Stock options cancelled		(33,667	)		196.47
Stock options exercised		(425,601	)		30.70

Stock options at December 29, 2019		1,546,411		$	94.21		4.4	$	306,340

Exercisable at December 29, 2019		1,350,200		$	71.59		3.8	$	298,015

The total intrinsic value of stock options

exercised was approximately $103.8 million, $91.2 million and $62.0 million in 2019, 2018 and 2017, respectively. Cash received from the exercise of stock options was approximately $13.1 million, $9.8 million and $6.1 million in 2019, 2018 and 2017, respectively. The tax benefit realized from stock options exercised was approximately $24.9 million, $22.0 million and $23.0 million in 2019, 2018 and 2017, respectively.

The Company recorded total

non-cash

compensation expense of $4.0 million, $6.3 million and $6.8 million in 2019, 2018 and 2017, respectively, related to stock option awards. As of December 29, 2019, there was $8.4 million of total unrecognized compensation cost related to unvested stock options granted under the 2004 Equity Incentive Plan which generally will be recognized on a straight-line basis over the related vesting period. This unrecognized compensation cost is expected to be recognized over a weighted average period of 2.6 years.

Management estimated the fair value of each option grant made during 2019, 2018 and 2017 as of the date of the grant using the Black-Scholes option pricing method. Weighted average assumptions are presented in the following table. The risk-free interest rate is based on the estimated effective life and is estimated based on U.S. Treasury Bond rates as of the grant date. The expected life is based on several factors, including, among other things, the vesting term and contractual term as well as historical experience. The expected volatility is based principally on the historical volatility of the Company’s share price.


	2019			2018			2017
Risk-free interest rate		1.9	%		2.7	%		2.0	%
Expected life (years)		5.5			5.5			5.5
Expected volatility		25.0	%		24.2	%		25.8	%
Expected dividend yield		0.9	%		0.8	%		0.9	%
Weighted average fair value per stock option	$	64.66		$	67.65		$	49.57

Option valuation models require the input of highly subjective assumptions. In management’s opinion, existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options, as changes in subjective input assumptions can significantly affect the fair value estimate.

Other Equity-Based Compensation Arrangements

The Company granted 3,780 shares, 3,790 shares and 4,410 shares of restricted stock in 2019, 2018 and 2017, respectively, to members of its Board of Directors. These grants generally vest one year from the date of the grant and have a fair value equal to the market price of the Company’s stock on the grant date. These awards also contain provisions for accelerated vesting upon the retirement of holders that have achieved specific service and age requirements. The Company recorded total

non-cash

compensation expense of $1.0 million, $0.8 million and $0.8 million in 2019, 2018 and 2017, respectively, related to these restricted stock awards. As of December 29, 2019, there was less than $0.1 million of total unrecognized compensation cost related to these restricted stock grants.

In 2018, the Company granted 28,570 shares of restricted stock to two executives of the Company. These grants will vest four years from the date of the grant and have a fair value equal to the market price of the Company’s stock on the grant date. These awards also contain provisions for accelerated vesting upon the retirement of holders that have achieved specific service and age requirements. The Company recorded total

non-cash

compensation expense of $2.1 million in 2019 and $1.1 million in 2018 related to these restricted stock awards. As of December 29, 2019, there was $4.9 million of total unrecognized compensation cost related to these restricted stock grants.

The Company granted 63,790 shares, 59,070 shares and 67,840 shares of performance-based restricted stock in 2019, 2018 and 2017, respectively, to certain employees of the Company. These performance-based restricted stock awards are separated into four tranches and have time-based and performance-based vesting conditions with the last tranche vesting four years from the issuance date. These awards also contain provisions for accelerated vesting upon the retirement of holders that have achieved specific service and age requirements. These awards are considered granted for accounting purposes when the performance target is established, which is generally in the fourth quarter of each year. The Company recorded total

non-cash

compensation expense of $13.2 million, $14.6 million and $13.1 million in 2019, 2018 and 2017, respectively, related to these awards. As of December 29, 2019, there was an estimated $27.7 million of total unrecognized compensation cost related to performance-based restricted stock.

Restricted stock and performance-based restricted stock activity related to the 2004 Equity Incentive Plan is summarized as follows:


	Shares			Weighted Average Grant Date Fair Value (1)
Nonvested at January 1, 2017		276,220		$	97.48
Shares granted		72,250			205.21
Shares cancelled		(16,109	)		115.71
Shares vested		(137,757	)		80.55

Nonvested at December 31, 2017		194,604		$	147.94
Shares granted		91,430			271.33
Shares cancelled		(12,692	)		178.06
Shares vested		(82,963	)		128.57

Nonvested at December 30, 2018		190,379		$	213.57
Shares granted		67,570			275.06
Shares cancelled		(17,923	)		230.60
Shares vested		(68,956	)		175.84

Nonvested at December 29, 2019		171,070		$	251.29

(1)

The weighted average grant date fair value for performance-based restricted shares granted was calculated based on the market price on the grant dates. Certain tranches will ultimately be valued when the performance condition is established for each tranche, which generally occurs in the fourth quarter of each fiscal year.