Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

Stock-Based Compensation

Note 8: Stock-Based Compensation

On June 28, 2013, the Company registered with the Securities and Exchange Commission a new stock-based compensation plan, which superseded all other plans. There are 342,000 shares available for grant under this plan at March 31, 2016.

Stock-based compensation expense related to stock awards for the three month periods ended March 31, 2016 and 2015 was $16 thousand and $17 thousand, respectively. Compensation expense for stock options is the estimated fair value of options on the date granted using the Black-Scholes Model amortized on a straight-line basis over the vesting period of the award. There was no unrecognized compensation expense related to stock options as of March 31, 2016.

Options for a total of 7,500 shares were granted and vested during the three months ended March 31, 2016. The aggregate fair value of options granted during the three months ended March 31, 2016 was $16 thousand. Options for a total of 7,500 shares were granted and vested during the three months ended March 31, 2015. The aggregate fair value of options granted during the three months ended March 31, 2015 was $17 thousand.

The variables used in these calculations of the fair value of the options are as follows:

	For the three months ended March 31,
	2016			2015
Risk free interest rate (5 year Treasury)		1.49	%		1.52	%
Expected dividend yield		0.0	%		0.0	%
Expected term (years)		5			5
Expected volatility		40.1	%		47.1	%

Stock option activity for the three months ended March 31, 2016 (unaudited) is summarized below:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (1)
Options outstanding, January 1, 2016		211,185	$	6.57		6.0
Granted		7,500		5.76
Forfeited		—		—
Exercised		—		—
Expired		—		—
Options outstanding and exercisable, March 31, 2016		218,685	$	6.54		5.9	$	69,619

(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. This amount changes based on changes in the market value of the Company’s common stock.