NOTE 11 - Stock Options

The activity in the Company’s stock option plan was as follows for the dates indicated:


	Number of	Range of				Weighted Average
	Options	Exercise Prices				Exercise Price

Balance outstanding, January 1, 2015	595,125	$	2.00	-	4.10	$	3.41

Granted in 2015	60,000				2.75		2.75

Expired in 2015	(20,125)		2.00	-	4.10		3.42

Balance outstanding, December 31, 2015	635,000	$	2.75	-	3.50	$	3.39

Granted in 2016	415,000				3.34		3.34

Expired in 2016	(385,000)				3.50		3.50

Balance outstanding, December 31, 2016	665,000	$	2.59	-	3.50	$	3.34

Exercisable, December 31, 2016	278,750	$	2.59	-	3.50	$	3.36

On November 11, 2014, pursuant to the Company’s 2014 Equity Incentive Plan, Mr. Ramadan was granted five-year options to purchase 200,000 shares of Common Stock that vest in four equal parts, with the options to acquire 50,000 shares vesting immediately upon the date of grant and options to acquire 50,000 shares vesting subsequently upon each anniversary of the grant date. The fair value of this grant was $234, or $1.17 per option. The exercise price of all these options was initially set at $3.20 per share, the closing stock price on the date of grant, and will escalate by 4.0% annually on each anniversary date. As of December 31, 2016, 150,000 options had vested and are exercisable at the escalated price of $3.46 per share.

On April 15, 2015, pursuant to the Company’s 2014 Incentive Equity Plan, the Compensation Committee recommended and the Board approved a grant to all six members of the Board at that time, each five-year options to purchase 10,000 shares of Common Stock that vest in four equal parts, with the options to acquire 2,500 shares vesting immediately upon the date of grant and options to acquire 2,500 shares vesting subsequently upon each anniversary of the grant date. The exercise price of these options was initially set at $2.75 per share, the closing stock price on the date of grant, and will escalate by 4.0% annually on each anniversary date. The fair value of this grant was $76, or $1.27 per option. As of December 31, 2016, 12,500 options had vested and are exercisable. The 10,000 options grant to Mr. Malcolm M.B. Sterrett, a former director, who stood down for re-election at the Company’s annual meetings of shareholders on June 26, 2015, expired on July 30, 2015, thirty days after his departure from the Board on June 30, 2015.

On January 29, 2016, the Compensation Committee recommended and the Board of Directors (or the “Board”) approved a grant to Mr. Ramadan, our Chief Executive Officer, pursuant to the Company’s 2014 Equity Incentive Plan,of five-year stock options to purchase 75,000 shares of Common Stock that vest in four equal parts, with the options to acquire 18,750 shares vesting immediately upon the date of grant and options to acquire 18,750 shares vesting subsequently upon each anniversary of the grant date. The exercise price of all these options was initially set at $2.59 per share, the closing stock price on the date of grant, and will escalate by 4.0% annually on each anniversary date. The fair value of the grant was approximately $78, or $1.04 per option.

On June 2, 2016, the Compensation Committee recommended and the Board approved five-year stock option grants to eight KMEs, of an aggregate of 340,000 shares of Common Stock, pursuant to the Company’s 2014 Equity Incentive Plan. These options vest in four equal parts, with the first portion vesting immediately upon the date of grant and remaining equal portions vesting subsequently upon each anniversary of the grant date. The exercise price of all these options was set at $3.50 per share, the closing stock price on the date of grant, and will escalate by 4.0% annually on each anniversary date. The fair value of the entire grant was approximately $382, or $1.12 per option.

As of December 31, 2016, there was $318 of total unrecognized compensation cost related to unvested share-based compensation awards granted under the equity compensation plans, which will be amortized over the weighted average remaining requisite service period of three years. Of the $318 of total unrecognized compensation cost, the Company expects to recognize approximately $170 for 2017 and $148 for 2018.

In each instance, the option exercise price per share was equal to or above the market value of the underlying stock on the date of grant. Options are generally granted with terms between five and ten years after the date of grant or earlier upon termination of employment, as defined in the plan or agreements.

The fair value of each option grant given in 2015 and 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the below assumptions related to risk-free interest rates, expected dividend yield, expected lives (i.e. life term of the grant) and expected stock price volatility.


Grant Year	2016		2015

Stock price volatility	34.56% - 34.71%		43.5	%
Risk-free interest rate	1.2% - 1.5%		1.4	%
Expected life (in years)	5.0		5.0
Expected dividend yield	—	%	—	%

Other than the grants described above, there were no other grants issued in 2015 and 2016.

Additional information about the Company’s outstanding stock options at December 31, 2016 is as follows:


	Options Outstanding
		Weighted
		Average
		Remaining	Weighted
		Contractual	Average
	Number of	Life	Exercise		Intrinsic
Exercise Prices	Shares	(in Years)	Price		Value
$2.50 - $3.49	325,000	3.21	$	3.17	$	—
$3.50	340,000	4.42		3.50		—
	665,000	3.83	$	3.34	$	—

Warrants – There were no warrants outstanding as of December 31, 2016 and 2015.