In May 2007, our shareholders approved the 2007 Long-Term Incentive Plan (the 2007 LTIP), which authorizes the Compensation Committee of our Board of Directors (the Board) to grant non-qualified stock options and restricted stock awards to employees, directors, consultants or advisors. In May 2016, our shareholders approved an amendment and restatement of the 2007 Long-Term Incentive Plan (the Amended 2007 LTIP) and increased the number of shares that may be issued to a total of 9,315,000 shares. As of December 31, 2019, we had 4,319,501 shares available for future issuance including 1,037,669 shares that may be issued as restricted stock.

Stock options granted under the Amended 2007 LTIP have an exercise price equal to our stock’s closing market price on the grant date and expire ten years from the grant date. Restricted stock awards granted under the Amended 2007 LTIP are issued at no cost to the grantee. Both stock options and restricted stock awards vest over time depending on an employee’s length of service with the Company. Share-based awards to our employees generally vest either five years from the grant date or on a three/five year split vest schedule, where half of the awards vest three years from the grant date and the remainder of the awards vest five years from the grant date. Share-based awards to our non-employee directors vest one year from the grant date.

Beginning with 2016 grants, certain restricted stock awards to our employees contain performance-based criteria in addition to the service-based vesting criteria described above. The awards provide for a three-year performance period for the metric to be achieved. If the performance metric fails to be met, it may be extended by one or two years; however, if it is not met by the end of the extended performance period, then all shares of performance-based restricted stock will be immediately forfeited and canceled. Since each grant date, we have concluded attainment of these performance conditions to be probable in the first three-year performance period of the performance-based grants for each of the performance-based grants from 2016 through 2019. Further, we achieved the performance conditions for the 2017 and 2016 grants in the their respective first three-year performance periods.


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance at December 31, 2018	1,879,151	$	48.19
Granted	65,525	160.67
Less: Exercised	640,475	26.29
Forfeited	2,150	150.29
Balance at December 31, 2019	1,302,051	$	64.46	4.12	$	192,600,967

Exercisable at December 31, 2019	877,812	$	42.05	2.71	$	149,516,227


	Outstanding Stock Options							Exercisable Stock Options
Range of Exercise Prices	Shares	Weighted Average Remaining Contractual Term (Years)	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
$ 20.32 to $ 37.13	478,102	1.51	$	29.12	478,102	$	29.12
$ 37.14 to $ 69.85	436,266	4.10	57.19		345,202	53.84
$ 69.86 to $ 181.60	387,683	7.35	116.22		54,508	80.80
	1,302,051	4.12	$	64.46	877,812	$	42.05


	Year Ended December 31,
(in thousands, except share amounts)	2019		2018		2017
Options exercised	640,475		491,448		364,984
Cash proceeds	$	16,839	$	11,779	$	9,809
Intrinsic value of options exercised	$	97,007	$	61,469	$	33,302
Tax benefits realized	$	24,252	$	15,367	$	12,809


	Year Ended December 31,
(Weighted average)	2019							2018					2017
Expected volatility	21.4		%		23.7		%		26.6		%
Expected term	7.0			years	7.3			years	7.3			years
Risk-free interest rate	2.52		%		2.87		%		2.44		%
Expected dividend yield	1.3		%		1.5		%		1.5		%
Grant date fair value	$	37.75			$	35.71			$	32.00

We calculated expected volatility over the expected term of the awards based on the historical volatility of our common stock. We use weekly price observations for our historical volatility calculation because we believe this provides the most appropriate measurement of volatility given the trading patterns of our common stock. We estimated the expected term based on the vesting period of the awards and our historical exercise activity for awards with similar characteristics. The weighted average expected term is impacted by a higher expected term estimate for stock option awards granted to our named executive officers. The risk-free interest rate is based on the U.S. Treasury zero-coupon issues with a remaining term approximating the expected term of the option. We determined the expected dividend yield based on the anticipated dividends over the expected term.

For purposes of recognizing share-based compensation expense, we ratably expense the estimated fair value of employee stock options over the options’ requisite service period. The requisite service period for our share-based awards is either the vesting period, or if shorter, the period from the grant date to the date the employee becomes eligible to retire under our share-based award agreements. We recognize compensation cost for awards with graded vesting using the graded vesting recognition method.

At December 31, 2019, the unamortized compensation expense related to stock option awards totaled $2.7 million. We anticipate that this expense will be recognized over a weighted average period of 2.3 years.


	Shares	Weighted Average Grant Date Fair Value
Balance unvested at December 31, 2018	307,773	$	101.93
Granted (at market price) ⁽¹⁾	71,494	162.81
Less: Vested	75,143	74.45
Forfeited	820	109.93
Balance unvested at December 31, 2019	303,304	$	123.13

At December 31, 2019, the unamortized compensation expense related to the restricted stock awards totaled $8.8 million. We anticipate that this expense will be recognized over a weighted average period of 2.8 years.

The table below presents the total number of restricted stock awards that vested for the past three years and the related fair value of those awards (in thousands, except share amounts):

In March 1998, the Board adopted the SCP Pool Corporation Employee Stock Purchase Plan (the ESPP). Under the ESPP, employees who meet minimum age and length of service requirements may purchase stock at 85% of the lower of:

No more than 956,250 shares of our common stock may be issued under the ESPP. For the two six month offering periods in 2019, 2018 and 2017, our employees purchased the following aggregate number of shares:

The grant date fair value for the most recent ESPP purchase period ended July 31, 2019 was $44.45 per share. Share-based compensation expense related to our ESPP was $0.4 million in 2019, $0.5 million in 2018 and $0.4 million in 2017.