12.	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

six

-month periods ended

June 30, 2019

and

2018.

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 basis 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.

	2019			2018
Risk-free interest rate		2.59	%		2.77	%
Expected term (in years)		7.5			7.5
Expected stock price volatility		30.9	%		28.3	%
Dividend yield		1.25	%		1.50	%
Fair value of stock option		3.30			3.51

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

	Six Months Ended
	June 30, 2019				June 30, 2018
	Number of Shares		Average Exercise Price		Number of Shares		Average Exercise Price
Options:
Outstanding, beginning of period		377,950	$	9.80		318,000	$	9.43
Granted		66,150		10.01		62,150		11.71
Exercised		—		—		—		—
Expired		—		—		—		—
Forfeited		16,819		11.39		1,450		11.05
Options outstanding, end of period		427,281	$	9.77		378,700	$	9.80
Options exercisable, end of period		309,682	$	9.20		249,300	$	8.71

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

$0.3

million and

$0.9

million as of

June 30, 2019

and

2018,

respectively.

Restricted Stock

During the

first

six

months of

2019

and

2018,

respectively,

5,520

shares and

10,520

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.