11.	STOCK AWARDS

In accordance with the Company

’s

2013

Incentive Plan, stock awards, including stock options and restricted stock, have been granted to certain employees and non-employee directors.

Shares of common stock available for distribution to satisfy the grants

may

consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner. Stock-based compensation expense related to stock awards totaled

$0.1

million for both of the

three

-month periods ended

March 31, 2018

and

2017.

Stock Options

Stock option awards have been granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and have vesting periods ranging from

one

three

years, with

-year contractual terms.

The Company recognizes the cost of services received in exchange for stock option awards based on the grant date fair value of the award, with compensation expense recognized on a straight-line b

asis over the award’s vesting period. The fair value of outstanding awards was determined using the Black-Scholes option pricing model based on the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock.

	2018			2017
Risk-free interest rate		2.77	%		2.23	%
Expected term (in years)		7.5			7.5
Expected stock price volatility		28.3	%		25.4	%
Dividend yield		1.50	%		1.50	%

The following table summarizes the Company’s stock option activity for the periods presented.

	Three Months Ended
	March 31 , 2018				March 31 , 2017
	Number of Shares		Average Exercise Price		Number of Shares		Average Exercise Price
Options:
Outstanding, beginning of period		318,000	$	9.43		272,550	$	8.21
Granted		62,150		11.71		64,600		14.11
Exercised		—		—		16,650		8.15
Expired		—		—		—		—
Forfeited		450		11.71		—		—
Options outstanding, end of period		379,700	$	9.80		320,500	$	9.41
Options exercisable, end of period		248,300	$	8.71		210,633	$	8.20

The aggregate intrinsic value of stock options outstanding (calculated as the

amount by which the market value of underlying stock exceeds the exercise price of the option) was approximately

$0.8

million and

$0.7

million as of

March 31, 2018

and

2017,

respectively.

Restricted Stock

During the

first

three

months of

2018

and

2017,

respectively,

5,520

shares and

7,533

shares of restricted stock were granted. The Company recognizes the cost of services received in exchange for restricted stock awards based on the grant date closing price of the stock, with compensation expense recognized on a straight-line basis over the award’s vesting period.