NOTE 3 – STOCK COMPENSATION PLANS

On December 9, 2015, the Company's stockholders approved the 2015 Equity Compensation Plan, or the 2015 Plan, which replaced the 2005 Equity Compensation Plan, or the 2005 Plan that expired on May 24, 2015. The 2015 Plan provides that grants may be in any of the following forms: incentive stock options, nonqualified stock options, stock units, stock awards, dividend equivalents and other stock-based awards. The 2015 Plan is administered and interpreted by the Compensation Committee of the Board of Directors, or the Committee. The Committee has the authority to determine the individuals to whom grants will be made under the 2015 Plan, the type, size and terms of the grants, the time when grants will be made and the duration of any applicable exercise or restriction period (subject to the limitations of the 2015 Plan), and deal with any other matters arising under the 2015 Plan. The Committee presently consists of three directors, each of whom is a non-employee director of the Company. All of the employees of the Company and its subsidiaries and non-employee directors of the Company are eligible for grants under the 2015 Plan.

A compensation expense of $35,000 and $57,000 related to the May 2016 issue of restricted stock awards was recorded for the three and nine months ended September 30, 2016, respectively. For the nine months ended September 30, 2015, compensation expense of approximately $46,000, was recorded for stock options granted in May 2014. There was no expense recorded for the three month period ended September 30, 2015. Costs were determined based on the fair value at the grant date and those costs were 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 was estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions used for grants issued in May 2014. All options were granted at fair value with a 10-year option term with a vesting period of one year from the date of grant.


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

On May 4, 2016, 5,000 shares of Class A common stock, or Class A Stock, were granted as restricted stock awards. The fair value per share was $27.70, the closing price of the Class A Stock as recorded on the Nasdaq Global Market on May 4, 2016. The restricted shares are subject to a one year vesting period from the date of grant. Prior to their release date, these restricted stock awards may be subject to forfeiture in the event of the recipient's termination of employment.

On December 18, 2015, 5,000 shares of Class A Stock were issued as fully vested unrestricted stock awards. The fair value per share was $27.38, the closing price of the Class A Stock as recorded on the Nasdaq Global Market on December 18, 2015.

The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the nine months ended September 30, 2016:

	Options									Restricted Awards
	Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Life (Yrs.)		Aggregate Intrinsic Value (in thousands)		Outstanding Restricted Stock Awards		Weighted Average Grant Date Fair Value
Plan options/restricted stock awards
Outstanding at January 1, 2016		270,000		$	19.34			$	2,256		–		–
Granted		–			–				–		5,000	$	27.70
Exercised/vested and released		(33,750	)		19.64				286		–		–
Expired/cancelled		–			–				–		–		–
Outstanding at September 30, 2016		236,250		$	19.30		4.59	$	2,182		5,000	$	27.70

Exercisable/vested at September 30, 2016		236,250		$	19.30		4.59	$	2,182		–		–

The total intrinsic value of options exercised during the nine months ended September 30, 2016 was approximately $286,000.

There were no unvested option shares outstanding under the 2015 Plan during the nine months ended September 30, 2016.

As of September 30, 2016, there was no unrecognized expense related to non-vested option shares granted under the 2015 Plan.

As of September 30, 2016, there was $82,000 total unrecognized expense related to non-vested awards of restricted shares awarded under the 2015 Plan. The cost will be recognized over 0.59 years, the remaining vesting period for the restricted stock awards.

The following summary reflects changes in the non-vested restricted shares of Class A Stock for the nine months ended September 30, 2016.

	Non-vested Restricted Shares		Weighted Average Grant Date Fair Value
Non-vested Restricted Shares
Outsanding at January 1, 2016		–		–
Granted		5,000	$	27.70
Vested and released		–		–
Cancelled		–		–
Oustanding at September 30, 2016		5,000	$	27.70

Restricted shares vested at September 30, 2016		–		–