14. STOCK-BASED COMPENSATION

During the three months ended March 31, 2019, we issued stock-based compensation awards to certain Associates including stock options and Restricted Stock Units (RSUs). The number of shares reserved for issuance under our 2018 Incentive Plan (2018 Plan) is 1,500,000. At March 31, 2019, there were 1,220,034 shares available for future grants under the 2018 Plan.

We record stock-based compensation expense related to awards granted to Associates in Salaries, benefits and other compensation; and expenses related to awards granted to directors is recorded in Other operating expense in our Consolidated Statements of Income. Total stock-based compensation expense recognized during the three months ended March 31, 2019 and 2018 was $0.7 million ($0.5 million after tax) and $1.0 million ($0.8 million after tax), respectively.

Stock Options

During the three months ended March 31, 2019, we awarded 120,019 stock options to certain Associates with a weighted average exercise price of $43.28. Stock options granted during 2019 vest in 25% per annum increments, start to become exercisable one year from the grant date and expire seven years from the grant date. We issue new shares of common stock upon the exercise of stock options.

We determine the grant date fair value of stock options using the Black-Scholes option-pricing model. The model requires the use of numerous assumptions, many of which are subjective. The expected term was derived from historical exercise patterns and represents the amount of time that stock options granted are expected to be outstanding. Other significant assumptions used to determine the grant date fair value of options granted in 2019 include volatility measured using the fluctuation in month end closing stock prices over a period which corresponds with the average expected option life; a weighted-average risk-free rate of return (zero coupon treasury yield); and a dividend yield indicative of our current dividend rate.

The following table summarizes the assumptions we used to value options awarded during the three months ended March 31, 2019:



	March 31, 2019
Expected term (in years)	5.5
Volatility	23.6	%
Weighted-average risk-free interest rate	2.50	%
Dividend yield	1.02	%

The total amount of unrecognized compensation cost related to nonvested stock options as of March 31, 2019 was $2.0 million. The weighted-average period over which the expense is expected to be recognized is 3.36 years. During the first quarter of 2019, we recognized $0.1 million of compensation expense related to these awards.

Restricted Stock and Restricted Stock Units

During the three months ended March 31, 2019, we awarded 53,669 RSUs to certain Associates with a grant date fair value per unit of $43.28. RSUs are granted at no cost to the recipient and generally vest over a four year period. All outstanding awards granted to senior executives vest over no less than a four year period. The 2018 Plan allows for awards with vesting periods less than four years subject to Board approval. The fair value of RSUs is equal to the fair value of our Common Stock on the date of grant.

The total amount of compensation cost to be recognized relating to non-vested restricted stock as of March 31, 2019 was $4.6 million. The weighted average period over which the expense is expected to be recognized is 3.22 years. During the three months ended March 31, 2019, we recognized $0.5 of compensation cost related to these awards.