Note A - Summary of Accounting Policies and Nature of Operations: Stock-based Compensation (Policies)

12 Months Ended

Dec. 31, 2016

Policies

Stock-based Compensation

Stock-Based Compensation

The Company does not have a written employee stock option plan.  The Company has historically granted only employee stock options with an exercise price equal to the market price of the Company’s stock at the date of grant, a contractual term of ten years, and a vesting period of three years ratably on the first, second and third anniversaries of the date of grant (with limited exceptions).

All employee stock options granted during 2016 and 2015 were nonqualified stock options.   Stock-based compensation is measured at the grant date, based on the calculated fair value of the option, and is recognized as an expense on a straight-line basis over the requisite employee service period (generally the vesting period of the grant).

The fair values of the granted options are estimated at the date of grant using the Black-Scholes option pricing model.  See Note G – Common Stock and Stock-Based Compensation for further information on stock-based compensation.