(

)

Share-Based Compensation

We measure and recognize compensation expense for all share-based payments based on the grant-date fair value of those awards. All of our existing stock option awards and unvested stock awards have been determined to be equity-classified awards. We account for forfeitures as they occur. As described in Note

we 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, we accelerated vesting of all outstanding class B share based awards, resulting in accelerated share-based compensation of

$331,000

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 described in Note

less the exercise price, if any, which approximated the awards’ intrinsic values.

Our

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 our former class A common stock and

300,000

shares of our 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.

Our

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 our Common Stock and, prior to the Recapitalization,

500,000

shares of our former class B common stock. The

2004

Director Plan provides for grants of nonqualified stock options to each of our directors who we do

not

employ. Beginning in

2018,

on the date of each annual meeting of shareholders, 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. Prior to

2018,

on the date of each annual meeting of shareholders, options to purchase

36,000

shares of our former class A common stock and

6,000

shares of our former class B common stock were granted to directors that were elected or retained as a director at such meeting. Stock options vest approximately

one

year following the date of grant and option terms are generally the earlier of

ten

years following the date of grant, or

three

years from the termination of the outside director’s service. At

December 31, 2019,

there were

851,956

shares of Common Stock available for issuance pursuant to future grants under the

2004

Director Plan. We have accounted for grants of

2,148,044

shares of Common Stock under the

2004

Director Plan using the date of grant as the measurement date for financial accounting purposes.

Our

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 our 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. At

December 31, 2019,

there were

736,492

shares of Common Stock available for issuance pursuant to future grants under the

2006

Equity Incentive Plan. We have accounted for grants of

1,063,508

shares of Common Stock and restricted stock under the

2006

Equity Incentive Plan using the date of grant as the measurement date for financial accounting purposes.

During

2019

and

2018,

we granted options to purchase

100,615

and

116,276

shares of Common Stock, respectively. We granted options to purchase

299,917

shares of our former class A common stock and

49,986

shares of our former class B common stock during

2017.

Options to purchase shares of common stock are typically granted with exercise prices equal to the fair value of the common stock on the date of grant. We do, in certain limited situations, grant options with exercise prices that exceed the fair value of the common shares on the date of grant. The fair value of stock options granted was estimated using a Black-Scholes valuation model with the following weighted average assumptions:

	2019			2018			2017
	Common Stock			Common Stock			Common Stock (former Class A)			Former Class B Common Stock
Expected dividend yield at date of grant		2.60	%		2.59	%		2.62	%		8.06	%
Expected stock price volatility		34.01	%		32.47	%		32.45	%		26.75	%
Risk-free interest rate		2.38	%		2.51	%		2.18	%		2.18	%
Expected life of options (in years)		7.46			7.28			6.80			6.80

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 our 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 we estimate that options will be outstanding. We consider 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 year ended

December

31,

2019:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value (In thousands)
Common Stock
Outstanding at December 31, 2018		1,373,209		$	15.99
Granted		100,615		$	41.64
Exercised		(227,902	)	$	15.88			$	8,280
Forfeited		--		$	--
Outstanding at December 31, 2019		1,245,922		$	18.08		4.45	$	59,631
Exercisable at December 31, 2019		807,537		$	14.33		3.02	$	41,677

The following table summarizes information related to stock options for the years ended

December 31, 2019,

2018

and

2017:

	2019		2018		2017
	Common Stock		Common Stock (former Class A)		Common Stock (former Class A)		Former Class B Common Stock
Weighted average grant date fair value of stock options granted	$	11.99	$	10.02	$	5.83	$	3.66
Intrinsic value of stock options exercised (in thousands)	$	8,280	$	10,621	$	2,681	$	202
Intrinsic value of stock options vested (in thousands)	$	1,891	$	2,719	$	5,258	$	787

As of

December 31, 2019,

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

$1.5

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

2.90

years.

There was

cash received from stock options exercised for the year ended

December 31, 2019,

2018

2017.

We recognized

$934,000,

$1.1

million and

$1.2

million of non-cash compensation for the years ended

December 31, 2019,

2018,

and

2017,

respectively, related to options, which is included in direct fixed and selling, general and administrative expenses. The actual tax benefit realized for the tax deduction from stock options exercised was

$1.9

million,

$3.8

million and

$1.1

million for the years ended

December 31, 2019,

2018

and

2017,

respectively.

During

2019

and

2018,

we granted

6,005

and

6,793

non-vested shares of Common Stock, respectively, under the

2006

Equity Incentive Plan.

shares were granted during the year ended

December 31, 2017.

As of

December 31, 2019,

we had

84,176

non-vested shares of Common Stock outstanding under the

2006

Equity Incentive Plan. These shares vest over

five

years following the date of grant and holders thereof are entitled to receive dividends from the date of grant, whether or

not

vested. The fair value of the awards is calculated as the fair market value of the shares on the date of grant. We recognized

$290,000,

$428,000

and

$629,000

of non-cash compensation for the years ended

December 31, 2019,

2018,

and

2017,

respectively, related to this non-vested stock, which is included in direct fixed and selling, general and administrative expenses. The actual tax benefit realized for the tax deduction from vesting of restricted stock was

$168,000

and

$1.3

million for the years ended

December 31, 2018

and

2017,

respectively.

restricted stock vested during the year end

December 31, 2019.

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

2006

Equity Incentive Plans for the year ended

December

31,

2019:

	Common Stock Outstanding		Common Stock 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 December 31, 2019		84,176	$	17.23

As of

December 31, 2019,

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

$411,000

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

3.03

years.