NET INCOME PER SHARE

6 Months Ended

Jun. 30, 2017

3. NET INCOME PER SHARE

In accordance with Accounting Standards Codification 260, Earnings Per Share, basic net income per share amount is computed using the weighted-average number of shares of common stock outstanding during the periods presented, while diluted net income per share is computed using the sum of the weighted-average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of diluted earnings per share result from the assumed exercise of stock options using the treasury stock method.

The following table summarizes the number of common equivalent shares that were excluded for the calculation of diluted net income per share reported in the condensed consolidated statement of operations.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Stock options		20,000		50,000		20,000		50,000

For the three and six months ended June 30, 2017, the Company had 20,000 options, which have an exercise price of $29.21, and will vest upon the achievement of certain performance criteria, which have not yet been met. These options expire on December 2, 2019. For the three and six months ended June 30, 2016, the Company had 50,000 options excluded from the calculation of diluted earnings per share, of which 30,000 options had an exercise price of $37.64, which was higher than the average market price for the second quarter of 2016. These options expire on April 21, 2025.