9.	*Stock Plans and Other Incentives*

The Company has adopted certain incentive plans for the purpose of attracting and retaining the Company’s directors, officers and employees by having the ability to issue options, restricted stock units (“RSUs”), or stock awards. Awards granted under the Company’s incentive plans expire ten years from the date of grant and vest over periods ranging generally from three to five years for employees.

Option Awards

The following table presents option activity and other plan data for the years ended December 31, 2015, 2014 and 2013:


	For the Years Ended December 31,
	2015				2014				2013
	Options		Weighted- Average Exercise Price		Options		Weighted- Average Exercise Price		Options		Weighted- Average Exercise Price

Outstanding at beginning of period		582,500	$	9.52		627,724	$	9.05		645,448	$	8.94
Granted		—	$	—		20,000	$	18.52		—	$	—
Exercised		(35,000)	$	(8.12)		(56,362)	$	(8.25)		(8,862)	$	(5.24)
Cancelled through cash settlement		—	$	—		(8,862)	$	(4.09)		(8,862)	$	(5.24)
Forfeited/cancelled/expired		—	$	—		—	$	—		—	$	—

Outstanding at end of period		547,500	$	9.61		582,500	$	9.52		627,724	$	9.05

Options exercisable at end of period		531,500	$	9.35		562,500	$	9.21		627,724	$	9.05

Options exercisable which can be settled in cash		—	$	—		—	$	—		17,724	$	4.09

Weighted average fair value of options granted per year (per option)	$	—			$	7.64			$	—

Weighted average remaining contractual life at end of period		3.0 years				3.9 years				4.5 years

Certain outstanding options had allowed the option holder to receive from the Company, in cancellation of the holder’s option, a cash payment with respect to each cancelled option equal to the amount, if any, by which the fair market value of the share of stock underlying the option exceeds the exercise price of such option. The Company accounted for these options as liability awards. Changes in the settlement value of option awards treated under the liability method were reflected as an increase to, or a reduction of, expense in the consolidated statements of operations.

At December 31, 2015 and 2014, there were no options outstanding for which a liability was required as the remaining liability award options were either exercised or settled with a net cash payment in 2013 and 2014. The Company recorded a compensation benefit of approximately $137,000 for the year ended December 31, 2014 and compensation expense of approximately $82,000 for the year ended December 31, 2013, in general and administrative expenses in the consolidated statements of operations related to the respective changes in the amount of the liability for option cancellations. There was no compensation expense (benefit) related to the liability for option cancellations for the year ended December 31, 2015.

In each of the years ended December 31, 2014 and 2013, a total of 8,862 options were settled with net cash payments aggregating approximately $132,000 and $110,000, respectively.

In May 2014, the Company granted 20,000 options to one employee. These options, which are accounted for as an equity award, vest ratably over a five-year period and have an exercise price of $18.52 per option, based upon the closing price of the Company’s common stock on the date of grant. For expense purposes, the Company estimated the fair value of each option granted on the date of grant using the Black-Scholes option-pricing model at $7.64 per option. The following table includes the assumptions that were made and the estimated fair value for option grants in 2014 (no option awards were granted during either 2015 or 2013):


	2014 Grant

Stock price on grant date	$	18.52
Exercise price	$	18.52
Dividend yield		2.38%
Risk-free interest rate		2.20%
Expected life		8.0 years
Estimated volatility		47.8%
Fair value of options granted (per option)	$	7.64

The following table presents additional option details at December 31, 2015 and 2014:


	Options Outstanding and Exercisable at December 31, 2015							Options Outstanding and Exercisable at December 31, 2014
Range of Exercise Prices	Outstanding		Remaining Contractual Life (Years)	Weighted Average Exercise Price		Intrinsic Value (A)		Outstanding		Remaining Contractual Life (Years)	Weighted Average Exercise Price		Intrinsic Value (A)

$ 7.50		20,000	1.6	$	7.50	$	324,600		47,500	2.6	$	7.50	$	886,825
$ 8.03		225,000	4.6	$	8.03		3,533,625		225,000	5.6	$	8.03		4,082,625
$ 10.40		282,500	1.4	$	10.40		3,765,725		290,000	2.4	$	10.40		4,573,300
$ 18.52		20,000	8.4	$	18.52		104,200		20,000	9.4	$	18.52		153,000

		547,500	3.0	$	9.61	$	7,728,150		582,500	3.9	$	9.52	$	9,695,750

(A)

The intrinsic value is the amount by which the fair value of the Company’s stock price exceeds the exercise price of an option at December 31, 2015 and 2014, respectively. For purposes of this calculation, the Company’s closing stock prices were $23.73 and $26.17 per share on December 31, 2015 and 2014, respectively.

Dividends are not paid or accrued on unexercised options.

RSU Awards

The following table presents the changes in RSUs outstanding for the years ended December 31, 2015, 2014 and 2013:


	For the Years Ended December 31,
	2015		2014		2013

Outstanding at beginning of period		277,973		365,686		469,848
Granted		83,141		105,132		103,176
Common stock delivered (A) (B) (C)		(105,970)		(185,224)		(205,075)
Forfeited		(1,103)		(7,621)		(2,263)

Outstanding at end of period		254,041		277,973		365,686


Intrinsic value (D)	$	6,028,000	$	7,275,000	$	7,032,000

(A)

The 2015 period includes 41,136 shares which were used to settle minimum employee withholding tax obligations for 28 employees of approximately $993,000 in 2015. A net of 64,834 shares of common stock were delivered in 2015.

(B)

In the 2014 period, all of the vested RSUs were issued as shares.

(C)

The 2013 period includes 80,139 shares which were used to settle minimum employee withholding tax obligations for 16 employees of approximately $1,280,000 in 2013. A net of 124,936 shares of common stock were delivered in 2013.

(D)

For purposes of this calculation, the Company’s closing stock prices were $23.73, $26.17 and $19.23 per share on December 31, 2015, 2014 and 2013, respectively.

In the first quarter of 2015, an aggregate of 77,405 RSUs were granted to employees, which RSUs vest one-third a year over three years and had an average grant date fair value of $22.41 per RSU. In February 2014, an aggregate of 91,431 RSUs were granted to employees, which RSUs vest one-third a year over three years and had a grant date fair value of $18.13 per RSU. In December 2014, an aggregate of 6,900 RSUs were granted, which RSUs vest upon the third anniversary of the grant date and had a grant date fair value of $20.43 per RSU. In February 2013, an aggregate of 91,356 RSUs were granted to employees, which RSUs vest one-third a year over three years and had a grant date fair value of $16.20 per RSU. The grant date fair value was determined based on the closing stock price of the Company’s common stock on the applicable date of grant and considers the impact of dividend payments. The awards granted to employees in 2015, 2014 and 2013 are treated as equity awards and the grant date fair value is charged to compensation expense at the corporate level on a straight-line basis over the vesting periods. Dividends are not paid or accrued on unvested employee RSUs.

During the years ended December 31, 2015, 2014 and 2013, an aggregate of 5,736 RSUs, 6,801 RSUs and 11,820 RSUs, respectively, were granted to non-employee directors (with an average grant date fair value of $24.03, $20.28 and $15.56 per RSU, respectively) related to the equity component of their compensation. In each case, the grant date fair value was determined as of the last trading day of the quarter for which the RSUs were being received as compensation. The RSUs are immediately vested, but are not deliverable to the non-employee directors until six months after termination of their service as a director.

Dividends are paid on RSUs granted to non-employee directors. The Company issued 40,564 shares in 2014, to satisfy the settlement of RSUs related to directors that retired from the Board six months prior.

Option and RSU Expense Information

The Company recorded non-cash compensation expense of approximately $1,773,000, $1,702,000 and $1,859,000, respectively, including approximately $138,000, $138,000 and $173,000 related to non-employee director equity compensation, for the years ended December 31, 2015, 2014 and 2013, respectively, related to all stock options and RSUs accounted for as equity awards, as a component of general and administrative expenses in the statements of operations.

At December 31, 2015, the total compensation cost related to outstanding, non-vested equity awards of options and RSUs that is expected to be recognized as compensation cost in the future aggregates approximately $2,028,000. It does not include any awards granted subsequent to December 31, 2015.


For the Year Ended December 31,	Options		RSUs		Total

2016	$	31,000	$	1,225,000	$	1,256,000
2017		31,000		652,000		683,000
2018		31,000		47,000		78,000
2019		11,000		—		11,000

	$	104,000	$	1,924,000	$	2,028,000