The Company recognizes compensation expense for stock options in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, “Stock Based Compensation”. The expense of the option is generally measured at fair value at the grant date with compensation expense recognized over the service period, which is typically the vesting period. For grants subject to a service condition, the Company utilizes the Black-Scholes option-pricing model to estimate the fair value of each option on the date of grant. The Black-Scholes model takes into consideration the exercise price and expected life of the options, the current price of the underlying stock and its expected volatility, the expected dividends on the stock and the current risk-free interest rate for the expected life of the option. The Company’s estimate of the fair value of a stock option is based on expectations derived from historical experience and may not necessarily equate to its market value when fully vested. In accordance with ASC 718, the Company estimates the number of options for which the requisite service is expected to be rendered. At June 30, 2020, the Company had four active stock-based compensation plans. The 2020 equity compensation plan was approved at the annual meeting in May 2020 and is described in the proxy for that meeting. The other three plans are described in the Company’s 2019 Annual Report on the Form 10-K.

The Company granted 300,000 stock options with a vesting period of four years during the six month period ended June 30, 2020. The weighted average grant-date fair value was $3.02. The Company granted 65,104 stock options during the six month period ended June 30, 2019. The weighted average grant-date fair value was $3.84. There were 74,000 common stock options exercised in the six month period ended June 30, 2020, and no common stock options exercised in the six month period ended June 30, 2019.



			Weighted average
			remaining
		Weighted average	contractual	Aggregate
	Shares	exercise price	term (years)	intrinsic value
Outstanding at January 1, 2020	1,311,604	$ 8.24	3.11	$ 6,203,523
Granted	300,000	6.87	3.88	879,000
Exercised	(74,000)	8.38	-	310,280
Expired	(147,000)	7.81	-	-
Forfeited	(8,000)	9.39	-	-
Outstanding at June 30, 2020	1,382,604	$ 7.97	4.57	$ 2,600,118
Exercisable at June 30, 2020	1,033,776	$ 8.27	2.83	$ 1,661,059

The Company granted 1,531,702 restricted stock units (RSUs) in the first six months of 2020 of which 1,387,602 have a vesting period of three years and 144,100 have a vesting period of one year. At issuance, the 1,531,702 RSUs granted in the first six months of 2020 had a fair value of $6.87 per unit. In the first six months of 2019, the Company granted 930,831 RSUs of which 863,331 had a vesting period of three years and 67,500 had a vesting period of one year. The 930,831 RSUs granted in the first six months of 2019 had a fair value of $8.57 per unit.



		Weighted average	Average remaining
		grant date	contractual
	Shares	fair value	term (years)
Outstanding at January 1, 2020	1,253,927	$ 8.87	1.64
Granted	1,531,702	6.87	2.70
Vested	(540,790)	8.70	-
Forfeited	(12,971)	9.10	-
Outstanding at June 30, 2020	2,231,868	$ 7.54	2.27

As of June 30, 2020, there was a total of $15.6 million of unrecognized compensation cost related to unvested awards under share-based plans. This cost is expected to be recognized over a weighted average period of approximately 2.4 years. Related compensation expense for the six months ended June 30, 2020 and 2019 was $3.0 million and $3.0 million, respectively. The total issuance date fair value of RSUs vested and options exercised during the six months ended June 30, 2020 and 2019 was $5.0 million and $3.5 million, respectively. The total intrinsic value of the options exercised and stock units vested in those respective periods was $6.2 million and $4.0 million, respectively.

For the periods ended June 30, 2020 and 2019, the Company estimated the fair value of each stock option grant on the date of grant using the Black-Scholes options pricing model with the following weighted average assumptions:



	June 30,
	2020	2019
Risk-free interest rate	0.68%	2.63%
Expected dividend yield	-	-
Expected volatility	45.20%	41.83%
Expected lives (years)	1.0 - 6.3	1.0 - 6.3