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6. STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

NOTE 6. STOCK BASED COMPENSATION

The Company has a stock incentive plan, originally created in 1992, and most recently amended in 2001. No additional grants may be made under the plan. All stock options have an exercise price that is equal to the fair market value of the Company’s stock on the date the options were granted. Administration of the plan, including determination of the number, term, and type of options to be granted, lies with the Board of Directors or a duly authorized committee of the Board of Directors. Options were generally granted based on employee performance with vesting periods ranging from date of grant to seven years. At the date of the grant, the maximum term before expiration is ten years.

The following table presents information related to the value of outstanding stock options for the period shown:

		Three months ended
		March 31, 2016

		Weighted Average Exercise
		Shares				Price

Outstanding at beginning of period			67,000			$	3.22
Granted			-				-
Exercised			(36,843	)			3.24
Forfeited			-				-

Outstanding at end of period			30,157			$	3.19

At March 31, 2016, the Company had 7,000 unvested stock options with associated unrecognized compensation cost of $808 that will be recognized over a weighted-average period of 2.13 years. The intrinsic value of the 23,157 stock options exercisable at March 31, 2016 was $85,732.

The Company expenses stock options on a straight-line basis over the options’ related vesting term. Pretax compensation expense related to stock options for the three months ended March 31, 2016 and 2015 was $372 and $5,291, respectively.

Stock options exercised during the three months ended March 31, 2016 and 2015 were 36,843 and 30,000, respectively.