12. Earnings per share (“EPS”)

The Company uses the two-class method of computing basic EPS due to the existence of non-vested restricted stock awards with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities). For the three and six months ended June 30, 2018 and 2017, no significant adjustments were made to net income for purposes of calculating basic and diluted EPS. The following is a reconciliation of the weighted average shares used in diluted EPS computations.

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Weighted average common shares-basic		18,413,756		18,050,551		18,409,331		18,015,308
Effect of dilutive securities
Unexercised stock options and stock purchase plan		327,171		156,109		318,047		115,560
Unvested restricted stock awards and units		94,633		136,378		83,978		157,182
Weighted average common shares-diluted		18,835,560		18,343,038		18,811,356		18,288,050

There were 413,296 and 462,146 outstanding options, restricted stock, and performance-based or market-based equity awards not included in the diluted earnings per share computation for the three months ended June 30, 2018 and 2017, respectively, and 259,470 and 506,964 outstanding options, restricted stock, and performance-based or market-based equity awards not included in the diluted earnings per share computation for the six months ended June 30, 2018 and 2017, respectively, because inclusion of these awards was anti-dilutive or, for performance-based and market-based awards, all necessary conditions had not been satisfied by the end of the respective period.