13) Stock Compensation Plans

12 Months Ended

Dec. 31, 2019

Notes

13) Stock Compensation Plans

13)Stock Compensation Plans 

The Company has two fixed option plans (the “2013 Plan” and the “2014 Director Plan”). Compensation expense for options issued of $256,996 and $237,123 has been recognized under these plans for the years ended December 31, 2019 and 2018, respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, 2019, the total unrecognized compensation expense related to the options issued in December 2019 was $230,446, which is expected to be recognized over the vesting period of one year.

The fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant.

The following table summarizes the assumptions used in estimating the fair value of each option granted along with the weighted-average fair value of the options granted:

			Assumptions
Grant Date	Plan	Weighted-Average Fair Value of Each Option	Expected Dividend Yield	Underlying stock FMV	Weighted-Average Volatility	Weighted-Average Risk-Free Interest Rate	Weighted-Average Expected Life (years)
December 6, 2019	All Plans	$            0.96	5%	$      5.19	32.79%	1.64%	4.83
January 17, 2019	All Plans	$            1.12	5%	$      4.98	36.04%	2.56%	5.31
November 30, 2018	All Plans	$            1.12	5%	$      4.91	34.61%	2.86%	4.56

Activity of the stock option plans is summarized as follows:

	Number ofClass A Shares	Weighted Average Exercise Price	Number ofClass C Shares	Weighted Average Exercise Price
Outstanding at January 1, 2018	880,426	$    4.35	523,603	$    5.24
Adjustment for the effect of stock dividends	48,168		27,491
Granted	142,000		90,000
Exercised	(42,211)		-
Cancelled	(17,109)		(63,814)
Outstanding at December 31, 2018	1,011,274	$    4.49	577,280	$    5.15
Adjustment for the effect of stock dividends	51,018		28,295
Granted	81,000		180,000
Exercised	(45,834)		(191,443)
Cancelled	(11,405)		-
Outstanding at December 31, 2019	1,086,053	$    4.41	594,132	$    5.36
Exercisable at end of year	1,002,603	$    4.34	405,132	$    5.40
Available options for future grant	205,664		-
Weighted average contractual term of options
outstanding at December 31, 2019	5.62 years		5.82 years
Weighted average contractual term of options
exercisable at December 31, 2019	5.26 years		4.54 years
Aggregated intrinsic value of options outstanding
at December 31, 2019 (1)	$1,291,602		$2,177,223
Aggregated intrinsic value of options exercisable
at December 31, 2019 (1)	$1,259,786		$159,028
(1) The Company used a stock price of $5.57 as of December 31, 2019 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 years ended December 31, 2019 and 2018 was $271,220 and $123,154, respectively.