(

)

SHARE-BASED COMPENSATION

The Company measures and recognizes compensation expense for all share-based payments based on the grant-date fair value of those awards. All of the Company’s existing stock option awards and unvested stock awards have been determined to be equity-classified awards. The Company accounts for forfeitures as they occur. The Company completed a Recapitalization in

April

2018

which, among other things, settled all then-existing outstanding class B share-based awards and resulted in the elimination of the class B common stock. As a result, the Company accelerated vesting of all outstanding class B share based awards, resulting in accelerated share-based compensation in the year ended

December 31, 2018.

All outstanding class B share-based awards were then settled for the same stock to cash proportion of the class B common stock, less the exercise price, if any, which approximated the awards’ intrinsic values.

The Company’s

2001

Equity Incentive Plan provided for the granting of stock options, stock appreciation rights, restricted stock, performance shares and other share-based awards and benefits up to an aggregate of

1,800,000

shares of the Company's former class A common stock and

300,000

shares of the Company's former class B common stock. Stock options granted could have been either nonqualified or incentive stock options. Stock options vest over

one

five

years following the date of grant and option terms are generally

five

ten

years following the date of grant. Due to the expiration of the

2001

Equity Incentive Plan, at

December 31, 2015,

there were

shares of stock available for future grants.

The Company’s

2004

Non-Employee Director Stock Plan, as amended (the

“2004

Director Plan”), is a nonqualified plan that provides for the granting of options with respect to

3,000,000

shares of the Company’s Common Stock and, prior to the Recapitalization,

500,000

shares of the Company’s former class B common stock. The

2004

Director Plan provides for grants of nonqualified stock options to each director of the Company who is

not

employed by the Company. Beginning in

2018,

on the date

of each annual meeting of shareholders of the Company, options to purchase shares of Common Stock equal to an aggregate grant date fair value of

$100,000

are granted to each non-employee director that is elected or retained as a director at each such meeting. Stock options vest approximately

one

year following the date of grant and option terms are generally

ten

years following the date of grant, or

three

years in the case of termination of the outside director’s service.

The Company’s

2006

Equity Incentive Plan (the

“2006

Equity Incentive Plan”), as amended, provides for the granting of stock options, stock appreciation rights, restricted stock, performance shares and other share-based awards and benefits up to an aggregate of

1,800,000

shares of Common Stock and, prior to the Recapitalization,

300,000

shares of the Company’s former class B common stock. Stock options granted

may

be either incentive stock options or nonqualified stock options. Vesting terms vary with each grant and option terms are generally

five

ten

years following the date of grant.

The Company granted options to purchase

73,331

and

74,516

shares of the Company’s Common Stock (formerly class A) during the

three

-month periods ended

March 31, 2019

and

2018,

respectively. Options to purchase shares of common stock were granted with exercise prices equal to the fair value of the common stock on the date of grant. The fair value of the stock options granted was estimated using a Black-Scholes valuation model with the following assumptions:

	2019			2018
Expected dividend yield at date of grant		2.85	%		2.65	%
Expected stock price volatility		34.05	%		32.24	%
Risk-free interest rate		2.48	%		2.39	%
Expected life of options (in years)		8			8

The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant. The expected volatility was based on historical monthly price changes of the Company’s stock based on the expected life of the options at the date of grant. The expected life of options is the average number of years the Company estimates that options will be outstanding. The Company considers groups of associates that have similar historical exercise behavior separately for valuation purposes.

The following table summarizes stock option activity under the

2001

and

2006

Equity Incentive Plans and the

2004

Director Plan for the

three

-month period ended

March 31, 2019:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding at December 31, 2018		1,373,209		$	15.99
Granted		73,331		$	38.30
Exercised		(86,247	)	$	7.34			$	2,717
Forfeited		--		$	--
Outstanding at March 31, 2019		1,360,293		$	17.74		5.22	$	28,379
Exercisable at March 31, 2019		907,432		$	14.44		3.91	$	21,928

As of

March 31, 2019,

the total unrecognized compensation cost related to non-vested stock option awards was approximately

$1.8

million which was expected to be recognized over a weighted average period of

3.66

years.

The following table summarizes information regarding non-vested stock granted to associates under the

2006

Equity Incentive Plan for the

three

-month period ended

March 31, 2019:

	Common Shares Outstanding		Weighted Average Grant Date Fair Value Per Share
Outstanding at December 31, 2018		78,171	$	15.61
Granted		6,005		38.30
Vested		--		--
Forfeited		--	$	--
Outstanding at March 31, 2019		84,176	$	17.23

As of

March 31, 2019,

the total unrecognized compensation cost related to non-vested stock awards was approximately

$629,000

and is expected to be recognized over a weighted average period of

3.22

years.