THE DIXIE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share data) (Continued) Restricted stock activity for the three years ended December 29, 2018 is summarized as follows: Number of Shares Weighted-Average Grant-Date Fair Value Outstanding at December 26, 2015 416,795 $ 8.90 Granted 149,215 4.36 Vested (107,318 ) 8.88 Forfeited (1,314) 15.68 Outstanding at December 31, 2016 457,378 7.41 Granted 60,000 3.70 Vested (78,908 ) 8.79 Forfeited (4,629) 5.96 Outstanding at December 30, 2017 433,841 6.66 Granted 307,292 2.77 Vested (64,939 ) 6.58 Forfeited (106,196) 9.51 Outstanding at December 29, 2018 569,998 $ 4.04 Stock Performance Units Stock Options As of December 29, 2018, unrecognized compensation cost related to unvested restricted stock was $1,458. That cost is expected to be recognized over a weighted-average period of 7.7 years. The total fair value of shares vested was approximately $173, $276 and $456 during 2018, 2017 and 2016, respectively. The Company's non-employee directors receive an annual retainer of $18 in cash and $18 in value of Stock Performance Units (subject to a $5.00 minimum per unit). If market value at the date of the grants is above $5.00 per share; there is no reduction in the number of units issued. However, if the market value at the date of the grants is below $5.00, units will be reduced to reflect the $5.00 per share minimum. Upon retirement, the Company issues the number of shares of Common Stock equivalent to the number of Stock Performance Units held by non-employee directors at that time. As of December 29, 2018, 123,321 Stock Performance Units were outstanding under this plan. As of December 29, 2018, unrecognized compensation cost related to Stock Performance Units was $24. That cost is expected to be recognized over a weighted-average period of 0.3 years. Options granted under the Company's 2006 Plan and the 2016 Plan were exercisable for periods determined at the time the awards are granted. Effective 2009, the Company established a $5.00 minimum exercise price on all options granted. On May 30, 2017, the Company granted 203,000 options with a market condition to certain key employees of the Company at a weighted-average exercise price of $4.30. The grant-date fair value of these options was $306. These options vest over a two-year period and require the Company's stock to trade at or above $7.00 for five consecutive trading days after the two-year period and within five years of issuance to meet the market condition. The fair value of each option was estimated on the date of grant using a lattice model. Expected volatility was based on historical volatility of the Company's stock, using the most recent period equal to the expected life of the options. The risk-free interest rate was based on the U.S. Treasury yield for a term equal to the expected life of the option at the time of grant. The Company uses historical exercise behavior data of similar employee groups to determine the expected life of options. Table of Contents 62