Equity Incentive Awards

Our 2014 Equity Incentive Plan (the "2014 Plan") was adopted by the Board of Directors on March 11, 2014 and approved by our stockholders on May 13, 2014. Pursuant to the 2014 Plan, our officers, directors, employees and consultants may be awarded restricted stock, options, including non-qualified stock options and incentive stock options, and other forms of equity awards subject to conditions and restrictions determined by the Compensation, Nominating, and Corporate Governance Committee of our Board of Directors (the "Compensation Committee").

Equity awards under the 2014 Plan are made by the Compensation Committee, which determines the individuals eligible to receive awards, the types of awards, and the terms, conditions and restrictions applicable to any award. Grants to directors are determined by the Board of Directors. A maximum of 3,750,000 shares of common stock are authorized for awards under the 2014 Plan. As of December 31, 2018, 2,927,923 shares remained available for future grants.

Restricted stock and options under the 2014 Plan have a maximum contractual term of ten years from the date of grant and have an exercise price not less than the fair value of the stock on the grant date. Individual grants could have different vesting periods but in generally no longer than three and a half years. All restricted stock awards have non-forfeitable rights to dividend payments even if the underlying stock does not entirely vest.

On February 1, 2018, we awarded 70,250 shares of restricted stock (the “2018 Awards”) at a fair market value of approximately $5.9 million to certain members of our senior management for their service in 2018. The 2018 Awards vest over a three-year vesting period, with one-third vested on December 28, 2018 and the remaining two-thirds vesting on each of January 31, 2020 and January 29, 2021, respectively (the “Extended Vesting Portion”). One-half of the Extended Vesting Portion of the 2018 Awards is time-based vesting in equal installments on January 31, 2020 and January 29, 2021. The remaining one-half of the Extended Vesting Portion of the 2018 Awards is performance-based vesting in equal installments on January 31, 2020 and January 29, 2021, upon meeting the performance conditions to be established by the Compensation Committee in the year of the vesting period.

Additionally, on February 1, 2018, we awarded a one-time transition award of time-based restricted stock (the "Transition Awards") as a transition from our prior practice of granting annual restricted stock awards which vest in full on December 31 of the relevant grant year. On February 1, 2018, we awarded Transition Awards for 70,250 shares of common stock at a fair market value of approximately $5.9 million to certain members of our senior management. These Transition Awards are intended to mitigate the impact of a reduction in the realized pay for certain members of our senior management in 2018 and 2019 resulting from the three-year vesting period for the 2018 Awards. Two- thirds of each Transition Award vested on December 28, 2018, and the remaining one- third will vest on January 31, 2020. The Transition Awards are not subject to performance goals. The Compensation Committee does not intend to replicate these Transition Awards in future years.

Stock-based compensation expense, reported in General and administrative on the Consolidated Statements of Income and Comprehensive income, for the years ended December 31, 2018, 2017 and 2016 was $10.0 million, $9.4 million and $9.2 million, respectively.

Restricted Stock

A summary of our restricted stock activities and related information is as follows:



	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Balance at December 31, 2015	85,500		$49.72
Shares granted	133,717		$68.21
Shares vested	(153,610	)	$59.85
Balance at December 31, 2016	65,607		$63.68
Shares granted	130,426		$76.25
Shares forfeited	(990	)	$80.54
Shares vested	(125,271	)	$68.79
Balance at December 31, 2017	69,772		$77.77
Shares granted	192,505		$86.01
Shares vested	(112,426	)	$81.48
Balance at December 31, 2018	149,851		$85.56

Compensation expense to be recognized subsequent to December 31, 2018 for restricted stock granted during or prior to 2018 that have not yet vested was $11.0 million, which is expected to be recognized over a weighted average term of 1.2 years.

Stock Options

The fair value of stock options granted was estimated on the grant date using the Black-Scholes-Merton model. The following table includes the assumptions made in the valuation:



	2018	2017	2016
Dividend Yield	2.5%	2.4%	2.3%
Risk-free interest rate	2.8%	1.9%	1.3%
Expected Life	5.6 years	5.5 years	6 years
Expected Volatility	16.7%	17.8%	19.8%
Weighted Average Grant Date Fair Value Per Share	$12.95	$11.00	$10.70

No options were forfeited or expired during the years ended December 31, 2018, 2017 and 2016. A summary of our stock option activity and related information is as follows:



	Shares Subject To Options		Weighted Average Exercise Price Per Share	Weighted Average Outstanding Contractual Life (in years)	Average Intrinsic Value (in millions)
Balance at December 31, 2015	865,600		$23.12	1.5	$37.7
Options issued	7,550		$74.53
Options exercised	(440,000	)	$25.66		$18.7
Balance at December 31, 2016	433,150		$21.44	1.7	$22.0
Options issued	6,930		$81.15
Options exercised	(220,000	)	$22.05		$14.5
Balance at December 31, 2017	220,080		$22.72	1.6	$14.6
Options issued	6,270		$89.65
Options exercised	(202,800	)	$18.85		$16.9
Balance at December 31, 2018	23,550		$73.89	7.3	$0.5
Exercisable at December 31, 2018	17,084		$68.94	6.7	$0.5

Cash proceeds received from stock options exercised during the years ended December 31, 2018, 2017 and 2016 were $3.8 million, $4.9 million and $11.3 million, respectively.