Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Deferred Compensation Arrangements [Abstract]

Stock-Based Compensation

Note 9. Stock-Based Compensation

We have two incentive plans – the 2012 Stock Incentive Plan (“2012 Plan”) and the 2019 Stock Incentive Plan (“2019” Plan”). As of September 30, 2020, shares available for future grants totaled 2,730,169. Stock options granted during 2020 under the 2012 Plan totaled 319,669. No shares remain available for issuance under the 2012 Plan. The following is a summary of stock-based compensation expense, net of forfeitures, included in General and administrative expenses in the Condensed Consolidated Statements of Income ($ in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Non-cash stock-based compensation expense	$	457	$	477	$	2,772	$	2,955

The weighted average fair value of options granted during the nine months ended September 30, 2020 and 2019 was $5.57 and $6.17 per option, respectively. The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2020	2019
Dividend yield	5.1%	5.5%
Expected volatility	17.1%	18.6%
Expected lives	2.9 years	2.9 years
Risk-free interest rate	1.30%	2.50%

The following table summarizes our outstanding stock options:

			Weighted Average
	Number	Weighted Average	Remaining
	of Shares	Exercise Price	Contractual Life (Years)
Options outstanding January 1, 2019	920,346	$69.24
Options granted	602,000	$79.96
Options exercised	(431,993)	$70.55
Options outstanding, September 30, 2019	1,090,353	$74.63
Exercisable at September 30, 2019	599,834	$74.34
Options outstanding January 1, 2020	1,004,014	$74.35
Options granted	592,000	$90.32
Options exercised	(512,509)	$72.98
Options forfeited	(10,500)	$88.73
Options outstanding, September 30, 2020	1,073,005	$83.68	3.70
Exercisable at September 30, 2020	601,994	$81.09	3.40

At September 30, 2020, the aggregate intrinsic value of stock options outstanding and exercisable was $49,000 and $16,000, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2020 and 2019 was $8,118,000 or $15.84 per share and $5,066,000 or $11.73 per share, respectively.

As of September 30, 2020, unrecognized compensation expense totaling $1,246,000 associated with unvested stock options is expected to be recognized over the following periods: remainder of 2020 - $458,000, 2021 - $706,000 and 2022 - $82,000.