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4) Stock-based Compensation
 9 Months Ended
Sep. 30, 2015
Notes  
4) Stock-based Compensation

4)      Stock-Based Compensation

 

The Company has four fixed option plans (the “2003 Plan”, the “2006 Director Plan”, the “2013 Plan” and the “2014 Director Plan”). Compensation expense for options issued of $88,510 and $108,872 has been recognized for these plans for the three months ended September 30, 2015 and 2014, respectively, and $299,986 and $237,398 for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, the total unrecognized compensation expense related to the options issued in December 2014 was $61,645, which is expected to be recognized over the vesting period of one year. At the Annual Meeting of Stockholders of the Company, held on July 1, 2015, the Company’s stockholders approved an amendment to the Company’s “2013 Plan” to authorize an additional 450,000 shares of Class A common stock to be available for issuance under the plan, of which up to 200,000 shares of Class A common shares may be issued as up to 200,000 shares of Class C common stock.

 

The Company generally estimates the expected life of the options based upon the contractual term of the options adjusted for actual experience. Future volatility is estimated based upon the a weighted historical volatility of the Company’s Class A common stock and three peer company stocks over a period equal to the estimated life of the options. Common stock issued upon exercise of stock options are generally new share issuances rather than from treasury shares.

 

A summary of the status of the Company’s stock incentive plans as of September 30, 2015, and the changes during the nine months ended September 30, 2015, are presented below:

 

Number of Class A Shares

Weighted Average Exercise Price

 

Number of Class C Shares

Weighted Average Exercise Price

Outstanding at December 31, 2014

         512,795

$      3.20

         691,591

$      2.00

Granted

                    -

 

                    -

 

Exercised

         (23,820)

         1.85

       (114,023)

         2.14

Cancelled

           (8,846)

         2.31

                    -

 

Outstanding at September 30, 2015

         480,129

$      3.28

         577,568

$      2.62

As of September 30, 2015:

Options exercisable

         447,571

$      3.17

         550,693

$      2.51

As of September 30, 2015:

Available options for future grant

         561,649

                    155,000

Weighted average contractual term of options

outstanding at September 30, 2015

7.15 years

2.41 years

Weighted average contractual term of options

exercisable at September 30, 2015

7.00 years

2.35 years

Aggregated intrinsic value of options

outstanding at September 30, 2015 (1)

$1,646,768

$2,363,921

Aggregated intrinsic value of options

exercisable at September 30, 2015 (1)

$1,583,605

$2,312,190

(1) The Company used a stock price of $6.71 as of September 30, 2015 to derive intrinsic value.

 

A summary of the status of the Company’s stock incentive plans as of September 30, 2014, and the changes during the nine months ended September 30, 2014, are presented below:

 

Number of Class A Shares

Weighted Average Exercise Price

 

Number of Class C Shares

Weighted Average Exercise Price

Outstanding at December 31, 2013

         405,133

$      2.41

         508,656

$      2.00

Granted

         52,000

         4.29

           50,000

         4.72

Exercised

         (40,468)

         1.66

                    -

Cancelled

           (8,201)

         2.29

                    -

Outstanding at September 30, 2014

         408,464

$      2.75

         558,656

$      2.25

As of September 30, 2014:

Options exercisable

         334,869

$      2.40

         495,532

$      1.92

As of September 30, 2014:

Available options for future grant

         412,480

         55,000

Weighted average contractual term of options

outstanding at September 30, 2014

7.01 years

2.57 years

Weighted average contractual term of options

exercisable at September 30, 2014

6.45 years

1.80 years

Aggregated intrinsic value of options

outstanding at September 30, 2014 (1)

$913,166

$1,524,902

Aggregated intrinsic value of options

exercisable at September 30, 2014 (1)

$869,804

$1,512,402

(1) The Company used a stock price of $4.97 as of September 30, 2014 to derive intrinsic value.

 

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the nine months ended September 30, 2015 and 2014 was $532,418 and $133,141, respectively.