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13) Stock Compensation Plans
 12 Months Ended
Dec. 31, 2020
Disclosure Text Block [Abstract]  
13) Stock-based Compensation

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 $358,878 and $256,996 has been recognized under these plans for the years ended December 31, 2020 and 2019, respectively, and is included in personnel expenses on the consolidated statements of earnings. As of December 31, 2020, the total unrecognized compensation expense related to the options issued was $39,152, 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)
March 27, 2020   All Plans    $            0.65   5%    $      3.76   32.29%   1.64%   4.82
                             
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

 

Activity of the stock option plans is summarized as follows:

 

    Number of
Class A Shares		   Weighted Average Exercise Price   Number of
Class C Shares		   Weighted Average Exercise Price
Outstanding at January 1, 2019      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
Adjustment for the effect of stock dividends          27,968              19,354    
Granted          77,000             180,000    
Exercised       (116,487)           (130,820)    
Cancelled           (1,671)                       -    
                 
Outstanding at December 31, 2020      1,072,863    $    4.33         662,666    $    4.73
                 
Exercisable at end of year      1,053,903    $    4.45         616,542    $    4.91
                 
Available options for future grant         325,372             266,500    
                 
Weighted average contractual term of options                
outstanding at December 31, 2020   5.50 years       6.71 years    
                 
Weighted average contractual term of options                
exercisable at December 31, 2020   5.43 years       6.63 years    
                 
Aggregated intrinsic value of options outstanding              
at December 31, 2020 (1)   $4,311,983       $2,396,954    
                 
Aggregated intrinsic value of options exercisable              
at December 31, 2020 (1)   $4,223,251       $2,183,399    
                                    
(1) The Company used a stock price of $8.35 as of December 31, 2020 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, 2020 and 2019 was $663,901 and $271,220, respectively.