4. SHARE-BASED COMPENSATION

Stock Options:

The Company has issued non-qualified and incentive stock options to employees and nonemployee directors. The fair value of these options are estimated on the date of grant using the Black-Scholes option pricing model, which requires estimates of the expected term of the option, the risk-free interest rate, the expected volatility of the price of the Company’s common stock, and dividend yield. Options outstanding as of March 31, 2019 generally vest over a period of three years and expire ten years from the date of grant. The exercise price of these options ranges from $26.52 to $171.68. Due to the Company’s lack of option exercise history, the expected term is calculated using the simplified method defined as the midpoint between the vesting period and the contractual term of each option. The risk free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant that most closely corresponds to the expected term of the option. The expected volatility is based on the historical volatility of the Company’s common stock over the period of time equivalent to the expected term for each award. For the three months, ended March 31, 2019, the Company did not grant stock options. For the three months ended March 31, 2018, the weighted average input assumptions used were as follows:


	2018
Expected term (in years)	6.4
Risk-free interest rate	2.64%
Expected volatility	33.31%
Dividend yield	2.88%

The following table is a summary of our stock option activity:


	Three months ended March 31,
	2019			2018
	Shares	Weighted-Average Exercise Price		Shares	Weighted-Average Exercise Price
(shares in thousands)
Outstanding at beginning of period	107	$	49.26	106	$	31.18
Granted	-		-	51		66.68
Exercised	(10)		27.86	(21)		28.87
Outstanding at end of the period	97	$	52.51	136	$	44.79
Exercisable at end of the period	53	$	40.97	60	$	29.94

As of March 31, 2019, the weighted-average remaining contractual life was 7.86 years with an aggregate intrinsic value of $7.4 million for outstanding stock options and the weighted-average remaining contractual life was 7.10 years with an aggregate intrinsic value of $4.6 million for exercisable options. For the three months, ended March 31, 2019, the Company did not grant stock options. The weighted-average grant date fair value of options granted during the three months ended March 31, 2018 was $17.79. The unrecognized compensation expense calculated under the fair value method for shares expected to vest as of March 31, 2019 was $0.8 million and is expected to be recognized over a weighted average period of 3.10 years. The Company received $269 thousand and $62 thousand in cash proceeds from the exercise of stock options during the three months ended March 31, 2019 and 2018, respectively. Upon exercising of options, the Company withheld shares for employee taxes of 1 thousand and 3 thousand for the three months ended March 31, 2019 and 2018, respectively. The total intrinsic value for stock options exercised during the three months ended March 31, 2019 and 2018 was $1.0 million and $1.4 million, respectively.

Restricted Stock:

The Company has issued restricted stock to employees and nonemployee directors generally with vesting terms up to five years after the date of grant. The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant. Expense for restricted stock is amortized ratably over the vesting period. The following table summarizes our restricted stock activity:


	Three months ended March 31,
	2019			2018
	Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
(shares in thousands)
Outstanding at beginning of period	57	$	50.55	129	$	32.15
Granted	27		130.59	16		66.68
Vested	(21)		33.92	(69)		28.35
Outstanding at end of the period	63	$	90.60	76	$	42.99

The total fair value of restricted stock awards vested during the three months ended March 31, 2019 and 2018 was $2.8 million and $4.8 million, respectively.

The total share-based compensation charged against income was $990 thousand and $805 thousand during the three months ended March 31, 2019 and 2018, respectively. The total costs of the options and restricted stock awards charged against income was $672 thousand and $580 thousand during the three months ended March 31, 2019 and 2018, respectively. Also included for the three months ended March 31, 2019 and 2018 was $76 thousand and $73 thousand, respectively, for 63,300 performance-based contingent shares for certain key executives. Included for the three months ended March 31, 2019 and 2018 was $152 thousand in expense for 210,000 performance-based contingent shares granted to our CEO that will vest based on the achievement of certain Company performance targets. Included for the three months ended March 31, 2019 was $90 thousand for 19,244 performance-based contingent shares for certain key executives.

The total income tax benefit recognized in the Condensed Consolidated Statements of Income for restricted stock awards was $833 thousand and $917 thousand for the three months ended March 31, 2019 and 2018, respectively.

There was $4.9 million of total unrecognized compensation cost related to restricted stock awards as of March 31, 2019, which is expected to be recognized over a weighted-average period of 2.28 years. There was $3.1 million of unrecognized compensation cost related to the 292,544 performance based contingent shares discussed above as of March 31, 2019, which is expected to be recognized over a weighted-average period of 2.42 years.