In October 2018, the Board adopted the 2018 Plan and ceased granting awards under the YETI Holdings, Inc. 2012 Equity and Performance Incentive Plan, as amended and restated on June 20, 2018 (the “2012 Plan”). The 2018 Plan became effective with the completion of our IPO. Any remaining shares available for issuance under the 2012 Plan as of our IPO effectiveness date are not available for future issuance. However, shares subject to stock awards granted under the 2012 Plan (a) that expire or terminate without being exercised or (b) that are forfeited under an award return to the 2018 Plan share reserve for future grant.

Subject to adjustments as described above, the 2018 Plan provides for up to 4.8 million shares of authorized stock to be awarded as stock options, appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance units, cash incentive awards, and certain other awards based on or related to shares of our common stock. The 2012 Plan provided for up to 8.8 million shares of authorized stock to be awarded as either stock options or RSUs.

During 2019, we granted stock options and RSUs to various employees. The stock options have a ten year term and each of the stock options and RSUs vest in accordance with the following schedule: (a) one-third will vest on the first anniversary of the grant date, and (b) an additional one-sixth will vest on the first four six-month anniversaries of the initial vesting date.

During 2019, we granted RSUs and deferred stock units (“DSUs”) to our non-employee members of the Board of Directors. The RSUs and DSUs vest immediately prior to our next annual meeting of our stockholders, subject to the non-employee director’s continued service through the applicable vesting date. However, both awards of RSUs and DSUs are subject to accelerated vesting in the event the non-employee director dies or becomes disabled or in the event of a change in control.

As of December 28, 2019, total unrecognized stock-based compensation expense for unvested options was $6.5 million and will be recognized over the next 3 years. In addition, as of December 28, 2019, total unrecognized stock-based compensation

The exercise price of options granted under the 2012 Plan and 2018 Plan is equal to the estimated fair market value of our common stock at the date of grant. Before our IPO in October 2018, we estimated the fair value of our common stock based on the appraisals performed by an independent valuation specialist. Subsequent to our IPO, we began using the market closing price for our common stock as reported on the New York Stock Exchange.

We estimate the fair value of stock options on the date of grant using a Black-Scholes option-pricing valuation model, which uses the expected option term, stock price volatility, and the risk-free interest rate. The expected option term assumption reflects the period for which we believe the option will remain outstanding. We elected to use the simplified method to determine the expected option term, which is the average of the option’s vesting and contractual term. Our computation of expected volatility is based on the historical volatility of selected comparable publicly-traded companies over a period equal to the expected term of the option. The risk-free interest rate reflects the U.S. Treasury yield curve for a similar instrument with the same expected term in effect at the time of the grant.


	2019	2018	2017
Expected option term	6 years	6 years	5 - 6 years
Expected stock price volatility	27% - 35%	35%	30%
Risk-free interest rate	1.64% - 2.53%	2.99%	2.05% - 2.18%
Expected dividend yield	–%	–%	–%
Weighted average fair value at date of grant	$7.67	$7.22	$10.84


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance, December 31, 2016	3,498	$	4.10	5.99
Granted	77	53.51
Exercised	(156)	0.65
Forfeited/cancelled	(529)	5.71
Expired	(6)	46.63
Balance, December 30, 2017	2,884	$	5.22	6.10
Granted	761	18.00
Exercised	(560)	0.47
Forfeited/cancelled	(172)	47.91
Expired	(24)	53.55
Balance, December 29, 2018	2,889	$	6.56	6.48
Granted	601	23.59
Exercised	(1,730)	2.06
Forfeited/cancelled	(142)	20.88
Expired	—	—
Balance, December 28, 2019	1,618	$	16.44	8.12	$	29,985
Exercisable, December 28, 2019	574	$	8.48	6.50	$	15,210

The total intrinsic value of stock options exercised was $46.7 million, $10.0 million, and $5.5 million for 2019, 2018, and 2017, respectively. The total fair value of stock options vested was $12.2 million, $15.2 million, and $17.7 million for 2019, 2018, and 2017, respectively.


	Shares Under Outstanding Options	Weighted Average Grant Date Fair Value
Non-vested options at December 29, 2018	1,155	$	14.25
Granted	601	7.67
Forfeited	(142)	7.28
Vested	(570)	21.47
Non-vested options at December 28, 2019	1,044	$	7.47

During 2018, our Board of Directors approved the grant of performance-based RSUs to various employees under the 2012 Plan. During 2018, 385,241 of those performance-based RSUs were granted as replacement awards in exchange for 104,411 out-of-the-money stock options, which were cancelled. The concurrent cancellation and replacement was a modification for accounting purposes. GAAP requires continued recognition of the cancelled awards' fair value plus the recognition of the new awards' fair value for any awards likely to vest. Any incremental compensation cost resulting from the modification will not be recognized prior to the consummation of a change in control as GAAP deems satisfaction of a change in control contingency to be unlikely.

On November 12, 2019, we completed an underwritten secondary offering. Following the closing of this offering, Cortec Group Fund V, L.P. and its affiliates (collectively, “Cortec”) ceased to own more than 35% of the voting power of our outstanding common stock and as a result, the performance-based RSUs granted to various employees during 2018 fully vested pursuant to their terms. In connection with the vesting of the performance-based RSUs, we recognized non-cash stock-based compensation expense of $40.7 million for 2019.

On the date of each annual meeting of our stockholders, or on a pro rata basis upon initial election or appointment to our Board of Directors, each non-employee director is granted an award of RSUs with a value of $120,000 (based on our closing stock price on the date of grant). This award will vest in full in one installment on the earlier to occur of (1) the first anniversary of the date of grant and (2) immediately prior to the next annual meeting of our stockholders, subject to the director’s continued service through the applicable vesting date.

Our non-employee directors are able to elect to defer all or part of the grant of RSUs in the form of DSUs, which will vest in full in one installment on the same basis as a non-employee director’s RSUs vest and will be settled in shares of our common stock on the earlier to occur of (1) the date specified by the non-employee director in his or her deferral election form and (2) the six-month anniversary of the non-employee director’s cessation of service on our Board of Directors.

During any period of deferral, non-employee directors will accrue dividend equivalents on their DSUs as, if and when dividends are paid on shares of our common stock. The definitive terms regarding any DSUs will be set forth in the DSU award agreement and the accompanying deferral election form completed by the applicable director.

The fair value of the RSUs is based on the closing price of our common stock on the award date. A summary of the performance-based RSUs, RSUs, and DSUs is as follows for the periods indicated (in thousands, except per share data):


	Performance-Based Restricted Stock Units				Restricted Stock Units					Deferred Stock Units
	Number of RSUs	Weighted Average Grant Date Fair Value		Number of RSUs	Weighted Average Grant Date Fair Value		Number of DSUs	Weighted Average Grant Date Fair Value
Balance, December 29, 2018	1,411	$	31.74	7	$	17	13	$	17
Granted	—	—		338	23.69		10	24.80
Vested	(1,284)	31.74		(10)	17.51		—	—
Forfeited/cancelled	(127)	31.74		(39)	22.84		—	—
Balance, December 28, 2019	—	$	—	296	$	23.85	23	$	20.39