Stock Option Plans

The Company has established two stock incentive plans, the 1993 plan and the 2004 plan, as amended, (together, the “Plans”). Under the Plans, options were granted at an exercise price not less than the market value of the common stock on the date of grant and expire ten years from the date of grant. Officer options vest ratably over four years following the grant and are charged to expense using the straight-line method over the vesting period. Director options vest immediately and are charged to expense as of the date of grant.

The following table summarizes the amount and activity of each grant with outstanding unexercised options, the total value and variables used in the computation and the amount expensed and included in general and administrative expense in the Consolidated Statements of Operations for the six months ended June 30, 2016.

Stock options issued



	Directors
Grant date	4/27/2007			4/25/2008			4/24/2009			5/7/2010			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			Subtotals
Total grant	30,000			30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			325,000
Vested	30,000			30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			325,000
Exercised	7,500			10,000			25,000			17,500			17,500			17,500			15,000			10,000			5,000			—			125,000
Forfeited	7,500			7,500			—			2,500			2,500			—			—			—			—			—			20,000
Exercisable at June 30, 2016	15,000			12,500			7,500			12,500			12,500			17,500			20,000			20,000			30,000			32,500			180,000
Remaining unexercised	15,000			12,500			7,500			12,500			12,500			17,500			20,000			20,000			30,000			32,500			180,000
Exercise price	$	54.17		$	50.15		$	32.68		$	38.76		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74
Volatility	0.225			0.237			0.344			0.369			0.358			0.348			0.333			0.173			0.166			0.166
Expected life (years)	8.0			7.0			6.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0
Assumed yield	4.39		%	4.09		%	4.54		%	4.23		%	4.16		%	4.61		%	4.53		%	4.48		%	4.54		%	3.75		%
Risk-free rate	4.65		%	3.49		%	2.19		%	2.17		%	1.86		%	0.78		%	0.82		%	1.63		%	1.50		%	1.23		%
Total value at grant date	$	285,300		$	254,700		$	222,950		$	287,950		$	297,375		$	257,250		$	278,250		$	109,500		$	125,300		$	151,125		$	2,269,700
Expensed in previous years	285,300			254,700			222,950			287,950			297,375			257,250			278,250			109,500			125,300			—			2,118,575
Expensed in 2016	—			—			—			—			—			—			—			—			—			151,125			151,125
Future expense	—			—			—			—			—			—			—			—			—			—			—
	Officers
Grant date	4/27/2007			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			Subtotal									Grand Totals
Total grant	135,000			162,500			242,500			202,500			170,000			190,000			194,000			1,296,500									1,621,500
Vested	67,500			118,750			107,500			131,875			85,000			47,500			—			558,125									883,125
Exercised	55,168			84,915			67,500			55,625			17,500			5,000			—			285,708									410,708
Forfeited	67,500			43,750			135,000			30,000			—			—			—			276,250									296,250
Exercisable at June 30, 2016	12,332			33,835			40,000			76,250			67,500			42,500			—			272,417									452,417
Remaining unexercised	12,332			33,835			40,000			116,875			152,500			185,000			194,000			734,542									914,542
Exercise price	$	54.17		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74
Volatility	0.233			0.330			0.315			0.304			0.306			0.298			0.185
Expected life (years)	6.5			8.0			8.0			8.0			7.0			7.0			7.0
Assumed yield	4.13		%	4.81		%	5.28		%	5.12		%	4.89		%	4.94		%	3.80		%
Risk-free rate	4.61		%	2.75		%	1.49		%	1.49		%	2.17		%	1.89		%	1.55		%
Gross value at grant date	$	1,339,200		$	1,366,625		$	1,518,050		$	1,401,300		$	1,349,800		$	1,584,600		$	1,136,840		$	9,696,415								$	11,966,115
Estimated forfeitures	62,000			367,937			845,100			280,468			168,749			141,780			86,628			1,952,662									1,952,662
Expensed in previous years	1,277,200			998,688			575,994			762,034			492,120			240,472			—			4,346,508									6,465,083
Expensed in 2016	—			—			96,956			134,550			147,636			180,354			43,758			603,254									754,379
Future expense	—			—			—			224,248			541,295			1,021,994			1,006,454			2,793,991									2,793,991
Weighted average term of remaining future expense (in years)							2.8

The table below summarizes the option activity for the six months ended June 30, 2016:



	Number of Shares		Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	860,274		$	46.58	$	4,237,456
Granted	226,500		57.74		899,205
Exercised	(169,732	)	45.76		1,878,685
Expired/Forfeited	(2,500	)	40.35
Outstanding at June 30	914,542		49.52		11,151,610
Exercisable at June 30	452,417		46.43		6,915,024

The intrinsic value measures the price difference between the options’ exercise price and the closing share price quoted by the New York Stock Exchange as of the date of measurement. The intrinsic value for shares exercised during the period was calculated by using the closing share price on the date of exercise. At June 30, 2016, the closing share price of $61.71 was higher than the exercise price of all outstanding options. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 7.8 years and 6.6 years, respectively.