STOCK COMPENSATION PLANS

6 Months Ended

Jun. 30, 2015

On May 25, 2005, the Company's stockholders approved a new Equity Compensation Plan, referred to as the 2005 Equity Compensation Plan, or the Plan, which authorizes up to 500,000 shares of Class A Non-Voting Common Stock, or Class A Stock, for issuance. The Company accounts for stock options issued after January 1, 2006 under Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC Topic, 718. For the three and six months ended June 30, 2015, compensation expense of approximately $13,000 and $46,000 was recorded for stock options granted in May 2014. Approximately $34,000 and $67,000 in compensation expense was recorded during the three and six months ended June 30, 2014 for stock options granted in May 2014 and May 2013. Costs were determined based on the fair value at the grant dates and those costs are being charged to income over the service period associated with the grants.

There was no stock compensation cost capitalized as part of an asset.

The fair value of each option grant is estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions used for grants issued in 2014. All options were granted at market value with a 10-year option term with a vesting period of one year from the date of grant.

	2014
Expected Dividend Yield	3.88	%
Expected Stock Price Volatility	26.50	%
Weighted Average Risk-Free Interest Rate	2.24	%
Weighted Average Expected Life of Options (in years)	7.52

The expected dividend yield is the dividend yield at grant. The expected volatility is the standard deviation of the change in the natural logarithm of the stock price (expressed as an annual rate) for the expected term shown above. The expected term was based on historic exercise patterns for similar grants. The risk-free interest rate is calculated from the Treasury Constant Maturity rates as of the date of the grants.

The following summary reflects changes in the shares of Class A Stock underlying options for the six months ended June 30, 2015:

	Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Life (Yrs.)		Aggregate Intrinsic Value
Plan options
Outstanding at January 1, 2015		376,250		$	19.52			$	1,157,000
Granted		–			–				–
Exercised		(176	)		19.70				324
Expired		–			–				–
Outstanding at June 30, 2015		376,074		$	19.52		3.99	$	669,600

Options exercisable at June 30, 2015		376,074		$	19.52		3.99	$	669,600

The total intrinsic value of options exercised during the six months ended June 30, 2015 was approximately $324.

The following summary reflects changes in the non-vested shares of Class A Stock underlying options for the six months ended June 30, 2015:

Non-vested Shares	Option Shares			Weighted Average Grant – Date Fair Value Per Option
Non-vested at January 1, 2015		33,750		$	3.95
Granted		–			–
Vested		(33,750	)		3.95
Canceled		–			–
Non-vested at June 30, 2015		–		$	–

As of June 30, 2015, there was no unrecognized expense related to non-vested option shares granted under the Plan.