Note 12. Employee Share Plans

We grant various share-based awards under the CBIZ, Inc. 2014 Stock Incentive Plan (the “2014 Plan”), which expires in 2024. The terms and vesting schedules for the share-based awards vary by type and date of grant. A maximum of 9.6 million stock options, shares of restricted stock or other stock-based compensation awards may be granted. Shares subject to award under the 2014 Plan may be either authorized but unissued shares of CBIZ common stock or treasury shares. Compensation expense for stock-based awards recognized during the three and nine months ended September 30, 2018 and 2017 was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Stock options	$	531	$	527	$	2,078	$	1,578
Restricted stock awards		978		930		3,280		2,669
Total stock-based compensation expense	$	1,509	$	1,457	$	5,358	$	4,247

Stock award activity during the nine months ended September 30, 2018 was as follows (in thousands, except per share data):

	Stock Options					Restricted Stock Awards
	Number of Options			Weighted Average Exercise Price Per Share		Number of Shares			Weighted Average Grant-Date Fair Value (1)
Outstanding at beginning of year		3,844		$	9.67		724		$	11.78
Granted		642		$	19.45		272		$	18.77
Exercised or released		(840	)	$	7.24		(364	)	$	11.18
Expired or canceled		—		$	—		—		$	—
Outstanding at September 30, 2018		3,646		$	11.95		632		$	15.35
Exercisable at September 30, 2018		2,035		$	9.21

(1)

Represents weighted average market value of the shares; awards are granted at no cost to the recipients.

We utilized the Black-Scholes-Merton options-pricing model to determine the fair value of stock options on the date of grant. The fair value of stock options granted during 2018 was $4.73. The following weighted average assumptions were utilized:

	Nine Months Ended September 30, 2018
Expected volatility (1)		22.04	%
Expected option life (years) (2)		4.62
Risk-free interest rate (3)		2.80	%
Expected dividend yield (4)		0.00	%

(1)

The expected volatility assumption was determined based upon the historical volatility of our stock price, using daily price intervals.

(2)

The expected option life was determined based upon our historical data using a midpoint scenario, which assumes all options are exercised halfway between the expiration date and the weighted average time for the option to vest.

(3)

The risk-free interest rate assumption was based upon zero-coupon U.S. Treasury bonds with a term approximating the expected life of the respective options.

(4)

The expected dividend yield assumption was determined in view of our historical and estimated dividend payouts. We do not expect to change our dividend payout policy in the foreseeable future.