On December 31, 2019, the Company had outstanding stock options, stock awards and SARs awarded under its 2011 Incentive Compensation Plan (2011 Plan). Stock options, stock awards and SARs are currently granted to Company executives and other key employees. The 2011 Plan authorized the award of 2,600,000 shares of the Company’s common stock for stock options, SARs and stock awards. At December 31, 2019, there were 1,032,406 shares available for grant under the 2011 Plan.

Compensation expense recorded in the consolidated statements of income for all plans was $8,872,000, $6,837,000, and $7,151,000 for the years ended December 31, 2019, 2018 and 20176, respectively. The increase in stock-based compensation in 2019 versus 2018 was primarily due to the increase in compensation expenses related to SARs. The $28.44 increase in the market value of Company common stock from $74.00 at December 31, 2018 to $102.44 at December 31, 2019 caused the fair value of SARs to

increase, resulting in an increase of the Company’s SARs liability. Partially offsetting the increase caused by SARs was the decline in compensation expenses related to performance awards. Management assessment that the profitability performance targets for certain grants would not be achieved led to the lowering of compensation expenses for performance awards.

The total income tax benefit recognized in the income statement for share-based compensation arrangements was $1,501,000, $1,849,000, and $2,980,124 for the years ended December 31, 2019, 2018 and 2017, respectively.

Under all plans, stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. The market price is defined and calculated as the average of the opening and closing prices for Company common stock on the grant date as reported in the New York Stock Exchange – Composite Transactions. Stock option awards granted prior to 2017 cliff vest after two years. Stock options granted in 2017, 2018 and 2019 have a three-year graded vesting feature, with one-third of the awards vesting each year. The Company has elected the straight-line method of expense attribution for the stock options with graded vesting feature. These options have 8- to 10-year contractual terms. The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model incorporating the weighted-average assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company’s stock. The Company also uses historical data to estimate the expected term of options granted. The risk-free rate is the U.S. Treasury note rate that corresponds to the expected option term at the date of grant. The following are the weighted-average assumptions used to calculate the grant-date fair values of stock option awards granted in the years ended December 31, 2019, 2018 and 2017:

	For the Years Ended December 31
	2019	2018	2017
Expected dividend yield	1.32%	1.34%	1.39%
Expected volatility	26.98%	27.41%	30.01%
Expected term	7.3 years	7.3 years	7.2 years
Risk-free interest rate	2.53%	2.88%	2.22%

A summary of stock option activity for the year ended December 31, 2019 is presented below:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Options
Outstanding at January 1, 2019		361,543		$	58.83
Granted		74,262			92.09
Exercised		(59,799	)		50.78
Forfeited		(15,184	)		79.12
Outstanding at December 31, 2019		360,822			66.15		6.62	$	13,093
Vested or expected to vest at December 31, 2019		350,805			65.69		6.58		12,891
Exercisable at December 31, 2019		270,871			60.09		6.00		11,470

The weighted-average grant-date fair values of options awarded during the years ended December 31, 2019, 2018 and 2017, were $26.49, $22.13, and $24.49, respectively. The total intrinsic values of options exercised during the years ended December 31, 2019, 2018, and 2017 were $2,518,000, $3,879,000, and $5,232,000, respectively.

As of December 31, 2019, the total unrecognized compensation cost for unvested stock options was $1,850,000. That cost is expected to be recognized over a weighted-average period of 1.7 years.

Cash received from stock option exercises under the Company’s stock option plans for the years ended December 31, 2019, 2018, and 2017 was $3,037,000, $4,163,000, and $3,370,000, respectively. The actual tax benefit realized for the tax deductions from stock option exercises totaled $348,000, $548,000, and $1,455,000 for the years ended December 31, 2019, 2018 and 2017, respectively.

In 2017, 2018, and 2019, the Company granted stock awards under the 2011 Plan. Most Company stock awards are granted in the form of performance awards. The performance stock awards vest only upon the Company’s achievement of certain Board of Directors approved levels of financial performance by the end of specified measurement periods. The number of Company shares of common stock ultimately distributed, if any, is contingent upon the Company’s actual financial performance attained by the end of the measurement period relative to the Board of Directors approved targets. The fair value of performance stock awards equals the grant-date market price of the Company’s common stock, discounted for the estimated amount of dividends that would not be received during the measurement period. Compensation expense is recorded each reporting period based on the probable number of awards that will ultimately vest given the projected level of financial performance. If at the end of the measurement period the performance objectives are not met, no compensation cost is recognized and any compensation expense recorded in prior periods is reversed. Periodically, the Company also grants stock awards that have no performance conditions associated with their vesting. These stock awards vest based on the service time established for the given grant.

A summary of stock award activity for the year ended December 31, 2019, is presented below:

	Shares			Weighted-Average Grant Date Fair Value
Stock Awards
Unvested at January 1, 2019		85,370		$	73.65
Granted		45,327			89.12
Vested		(28,595	)		77.90
Forfeited		(14,768	)		70.76
Unvested at December 31, 2019		87,334			80.78

The weighted-average grant-date fair values of stock awards granted during the years ended December 31, 2019, 2018 and 2017, were $89.12, $72.06, and $75.94, respectively. As of December 31, 2019, under the current Company assumption as to the number of stock award shares that will vest at the measurement periods ended December 31, 2020 and 2021, there was $3,618,000 of unrecognized compensation cost for unvested stock awards. That cost is expected to be recognized over a period of 1.7 years.

At December 31, 2019, the Company had both cash-settled and Company stock-settled SARs outstanding. SARs granted prior to 2015 are cash-settled, and SARs granted after 2014 are stock-settled. SARs granted prior to 2017 cliff vest after two years. SARs granted in 2017, 2018 and 2019 have a three-year graded vesting feature, with one-third of the awards vesting each year. The Company has elected the straight-line method of expense attribution for the SARs with graded vesting feature. All SARs expire ten years from the grant date. Upon the exercise of a SARs award, a participant receives in cash (for cash-settled SARs) or Company common stock (for stock-settled SARs) an amount that equals the excess of the fair market value of a share of Company common stock at the date of exercise over the fair market value of a share of Company common stock at the date of grant (the exercise price). Cash-settled SARs are accounted for as liabilities that must be re-measured at fair value at the end of every reporting period until settlement. Compensation expense for each reporting period is based on the period-to-period change (or portion of the change, depending on the proportion of the vesting period that has been completed at the reporting date) in the fair value of the SARs. Compensation expense for stock-settled SARs is based on the grant-date value of the awards allocated over the proportion of the vesting period that has been completed at the reporting date. Because stock-settled SARs are considered equity instruments, they are not re-measured at fair value at the end of each reporting period.

The following is a summary of SARs activity for the year ended December 31, 2019:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
SARs
Outstanding at January 1, 2019		639,146		$	60.64
Granted		166,518			92.02
Exercised		(104,367	)		51.13
Forfeited		(45,880	)		79.12
Outstanding at December 31, 2019		655,417			68.83		6.89	$	22,048

The weighted-average grant-date fair values of SARs granted during the years 2019, 2018 and 2017 were $26.43, $22.19, and $24.90, respectively. The fair value for each SARs award was estimated using the Black-Scholes valuation model incorporating the same assumptions as noted for stock options.

As of December 31, 2019 and 2018, the liability for cash-settled SARs recorded on the consolidated balance sheet (non-current liabilities) was $4,509,000 and $3,647,000, respectively. At December 31, 2019, there was $4,058,000 of total unrecognized compensation cost related to all unvested SARs. That cost is to be recognized over a weighted-average period of 1.7 years.

In general, it is the Company’s policy to issue new shares of its common stock upon the exercise of stock options and stock-settled SARs or the vesting of stock awards.