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Stock Option Plan and Restricted Stock Plan
9 Months Ended
Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Option Plan and Restricted Stock Plan

Note 8 - Stock Option Plan and Restricted Stock Plan

The Company grants incentive stock options for a fixed number of shares with an exercise price equal to the fair value of the shares at the date of grant to employees. In June 2017, the Company granted 452,450 incentive stock options with an exercise price of $42.35 per share. The fair value of the options was $9.90 per option and was estimated using the Black-Scholes options pricing model with the following weighted average assumptions: risk-free interest rate of 1.89%; expected dividend yield of 1.79%; expected life of 6.24 years; and expected volatility of 26.51%. No options were granted in 2016.

The Company recorded stock option expense totaling $750,000 and $221,000 for the three-month periods ended September 30, 2017 and 2016, respectively. The Company recorded stock option expense totaling $1,182,000 and $662,000 for the nine months ended September 30, 2017 and 2016, respectively. The additional disclosure requirements under authoritative accounting guidance have been omitted due to the amounts being insignificant.

On July 21, 2015, 7,070 restricted shares were granted to the ten non-employee directors. Total value of these restricted shares totaled $250,000 and was expensed over the period from grant date to April 26, 2016, the annual shareholders’ meeting at which these director’s term expired. On April 26, 2016, upon re-election of existing directors, 7,660 restricted shares with a total value of $250,000 were granted to the ten non-employee directors and was expensed over the period from grant day to April 25, 2017, the annual shareholders’ meeting at which these directors’ term expired. On April 25, 2017, upon re-election of existing directors, 14,650 restricted shares with a total value of $600,000 were granted to the ten non-employee directors and is being expensed over the period from the grant date to April 24, 2018, the Company’s next shareholders’ meeting at which the directors’ term expires.

 

The Company recorded director expense related to these restricted share grants of $150,000 and $63,000 for the three-month periods ended September 30, 2017 and 2016, respectively. The Company recorded director expense related to these restricted share grants of $333,000 and $215,000 for the nine-month periods ended September 30, 2017 and 2016, respectively.

On October 27, 2015, the Company granted 31,273 restricted shares with a total value of $1,060,000 to certain officers that is being expensed over the vesting period of three years. On October 25, 2016, the Company granted 15,405 restricted shares with a total value of $560,000 to certain officers that is being expensed over the vesting period of three years. The Company recorded restricted stock expense for officers of $133,000 and $88,000, for the three-month periods ended September 30, 2017 and 2016, respectively. The Company recorded restricted share expense for officers of $399,000 and $262,000 for the nine-month periods ended September 30, 2017 and 2016, respectively.

On October 24, 2017, the Company granted 14,191 restricted shares with a total value of $655,000 to certain officers that will be expensed over the vesting period of one to three years.