7. Stock-Based Awards

The 2006 Incentive Plan initially adopted in 2006, and amended and restated in 2011 (the “2006 Incentive Plan”), provides for grants of options with terms of up to ten years, grants of restricted stock or stock unit awards (SUAs), issuances of stock bonuses or grants other stock-based awards, covering up to 500,000 shares of common stock, plus cash based awards, to officers, directors, employees, and consultants. Such shares are issuable out of the Company’s authorized but unissued common stock. As of December 31, 2014, 146,885 shares remained available for future grant under the 2006 Incentive Plan.

The fair value of the SUAs is determined by the closing price on the date of grant. The SUAs vest over a period of two to four years and are convertible into an equivalent number of shares of the Company’s common stock provided that the employee receiving the award remains continuously employed throughout the vesting period. The Company records compensation expense related to the SUAs on a straight-line basis over the vesting term of the SUA. Employees are issued shares upon vesting, net of tax withholdings.

The Company granted 44,575 SUAs on May 8, 2014. The fair value of the SUAs was $14.97 per share, which was the closing price of the Company’s stock on that date. The SUAs vest over a period of two to four years and are convertible into an equivalent number of shares of the Company’s common stock provided that the awardee remains continuously employed throughout the vesting period. In addition, 9,879 SUAs were withheld for taxes in 2014, in conjunction with the vesting of SUA’s granted in prior years, and consequently, added back to the shares available for future grant.

The Company granted 56,500 SUAs on May 23, 2013. The fair value of the SUAs was $11.45 per share, which was the closing price of the Company’s stock on that date. The SUAs vest over a period of two to four years and are convertible into an equivalent number of shares of the Company’s common stock provided that the awardee remains continuously employed throughout the vesting period. In addition, 13,362 SUAs were withheld for taxes in 2013, in conjunction with the vesting of SUA’s granted in prior years, and consequently, added back to the shares available for future grant.

The Company granted 65,000 SUAs on May 22, 2012. The fair value of the SUAs was $9.79 per share, which was the closing price of the Company’s stock on that date. The SUAs vest over a period of two to four years and are convertible into an equivalent number of shares of the Company’s common stock provided that the awardee remains continuously employed throughout the vesting period. In addition, 9,619 SUAs were withheld for taxes in 2012, in conjunction with the vesting of SUA’s granted in prior years, and consequently, added back to the shares available for future grant.

The Company also has stock option plans that have expired or been terminated, but shares can be issued upon exercise of outstanding options that were granted prior to such expiration or termination. Such shares are issuable out of the Company’s authorized but unissued common stock. No additional grants of options or other stock based awards may be made under such expired or terminated plans. Activity for these plans is included in this footnote. Options granted under the plans consisted of both non-qualified and incentive stock options and were granted in each case at a price that was not less than the fair market value of the common stock at the date of grant. These options generally have contractual lives of ten years and they are all fully exercisable.

A summary of stock option activity for the Company’s stock option plans is as follows:

			Weighted		Weighted
			Average		Average
			Exercise		Remaining	Aggregate
	Number of		Price		Contractual	Intrinsic
	Shares		per Share		Life	Value⁽¹⁾
Outstanding & exercisable, December 31, 2011		221,239		13.62
Granted		—		—
Exercised		—		—
Cancelled		(21,401)		13.61
Outstanding & exercisable, December 31, 2012		199,838		13.62
Granted		—		—
Exercised		(14,988)		8.58		$	53,636
Cancelled		(7,900)		13.75
Outstanding & exercisable, December 31, 2013		176,950		14.04
Granted		—		—
Exercised		(40,900)		12.84		$	157,897
Cancelled		—		—
Outstanding & exercisable, December 31, 2014		136,050	$	14.40	.4 years	$	102,038

(1)

The aggregate intrinsic value on this table was calculated based on the amount, if any, by which the closing market value of the Company’s stock on December 31, 2014 ($15.15) exceeded the exercise price of any of the underlying options, multiplied by the number of shares subject to each such option. For value on the exercised stock, the calculation is based on the amount the Company’s stock price at exercise exceeded the exercise price.

A summary of stock unit award activity for the Company is as follows:

			Weighted
			Average	Aggregate
	Number of		Period to	Intrinsic
	Shares		Vest	Value⁽²⁾
Outstanding & Unvested, December 31, 2011		119,100		$	1,083,810
Granted		65,000
Converted to common stock*		(46,625)		$	458,211
Cancelled		—
Outstanding & Unvested, December 31, 2012		137,475		$	1,477,856
Granted		56,500
Converted to common stock*		(50,350)		$	577,321
Cancelled		(4,650)
Outstanding & Unvested, December 31, 2013		138,975		$	2,041,543
Granted		44,575
Converted to common stock*		(61,925)		$	922,330
Cancelled		—
Outstanding & Unvested, December 31, 2014		121,625	2.7 years	$	1,842,619

Available for grant, December 31, 2014		146,885

(2)

The aggregate intrinsic value on this table was calculated based on the closing market price of the Company’s stock. The price at year end was $15.15, $14.69, $10.75, and $9.10 for the years ended December 31, 2014, 2013, 2012 and 2011, respectively. For value on the converted stock, the price used is the price on the grant date.

Includes 9,879 shares in 2014, 13,362 shares in 2013, 9,619 shares in 2012, and 8,406 shares in 2011 withheld to cover income taxes.

As of December 31, 2014, a total of 404,560 shares of common stock were reserved for issuance under the various stock plans. As of December 31, 2014, the unamortized fair value of awards relating to SUAs was $1,057,142 to be amortized over a weighted average period of approximately 2.7 years. During 2014 and 2013, the total tax benefit related stock compensation was $125 thousand and $44 thousand, respectively.