Under the RBB Bancorp 2010 Stock Option Plan (the “2010 Plan”), the Company was permitted to grant awards to eligible persons in the form of qualified and non-qualified stock options. The Company reserved up to 30% of the issued and outstanding shares of common stock as of the date the Company adopted the 2010 Plan or 3,494,478 shares, for issuance under the 2010 Plan. After approval of the 2017 Omnibus Stock Incentive Plan (the “OSIP”) at the Company’s annual meeting on May 23, 2017, no additional grants were made under the 2010 Plan. The 2010 Plan has been terminated and options that were granted under that Plan have become subject to the OSIP. Awards that were granted under the 2010 Plan will remain exercisable pursuant to the terms and conditions set forth in individual award agreements, but such awards will be assumed and administered under the OSIP. The 2010 Plan award agreements allow for acceleration of exercise privileges of grants upon occurrence of a change in control of the Company. If a participant’s job is terminated for cause, then all unvested awards expire at the date of termination.

The OSIP was adopted by the Company’s board of directors on January 18, 2017 and approved by the Company’s shareholders at the Company’s annual meeting on May 23, 2017. The OSIP was designed to ensure continued availability of equity awards that will assist the Company in attracting and retaining competent managerial personnel and rewarding key employees, directors and other service providers for high levels of performance. Pursuant to the OSIP, the Company’s board of directors are allowed to grant awards to eligible persons in the form of qualified and non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights and other incentive awards. The Company has reserved up to 30% of issued and outstanding shares of common stock as of the date the Company adopted the OSIP, or 3,848,341 shares. As of March 31, 2020, there were 1,207,045 shares of common stock available for issuance under the OSIP. This represents 6.11% of the issued and outstanding shares of the Company’s common stock as of March 31, 2020. Awards vest, become exercisable and contain such other terms and conditions as determined by the board of directors and set forth in individual agreements with the employees receiving the awards. The OSIP enables the board of directors to set specific performance criteria that must be met before an award vests. The OSIP allows for acceleration of vesting and exercise privileges of grants if a participant’s termination of employment is due to a change in control, death or total disability. If a participant’s job is terminated for cause, then all awards expire at the date of termination.

The Company recognized stock-based compensation expense of $161,000 and $231,000 and recognized income tax benefits on that expense of $28,000 and $92,000 for the three months ended March 31, 2020 and 2019, respectively.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions presented below for 2020 and 2019.

	2020			2019
Expected volatility		28.5	%		35.0	%
Expected term	6.0 years			6.0 years
Expected dividends		1.99	%		1.90	%
Risk free rate		1.31	%		2.66	%
Grant date fair value	$	4.61		$	6.32

Since the Company had a limited amount of historical stock activity, the expected volatility was based on the historical volatility of similar banks that had a longer trading history. The expected term represents the estimated average period of time that the options remain outstanding. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding. The risk free rate of return reflects the grant date interest rate offered for zero coupon U.S. Treasury bonds over the expected term of the options.

A summary of the status of awards pursuant to the Company's stock option plans as of March 31, 2020 and changes during the three months ended ended is presented below:

						Weighted-
				Weighted-		Average
				Average		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
(dollars in thousands, except for share amounts)	Shares			Price		Term	Value
Outstanding at beginning of year		1,090,968		$	13.11
Granted		51,000			20.10
Exercised		(56,498	)		12.61
Forfeited/cancelled		(4,000	)		18.38
Outstanding at end of year		1,081,470		$	13.45	4.10 years	$	1,826

Options exercisable		982,470		$	12.87	3.57 years	$	1,826

As of March 31, 2020 there was approximately $512,000 of total unrecognized compensation cost related to outstanding stock options that will be recognized over a weighted-average period of 2.2 years.

The total fair value of the shares vested was $350,000, and $460,000 in 2020, and 2019, respectively. The number of unvested stock options were 99,000, and 76,500 with a weighted-average grant date fair value of $5.43 and $6.32 as of March 31, 2020, and December 31, 2019.

Cash received from the exercise of 56,498 share options was $712,000 for the period ended March 31, 2020 and cash received from the exercise of 200,629 share options was $2.8 million for the year ended December 31, 2019. The intrinsic value of options exercised was $389,000, and $1.2 million, in 2020 and 2019 respectively.