8. EQUITY-BASED INCENTIVE AWARDS

Omnibus Plan

The Company has two equity-based incentive plans, the 2007 Omnibus Incentive Plan and 2014 Omnibus Incentive Plan (collectively “the Omnibus Plans”), which provide for equity incentives to employees. Each Omnibus Plan was designed with the intent of encouraging employees to acquire a vested interest in the growth and performance of the Company. The Omnibus Plans together permit the issuance of up to 225,000 shares of the Company’s common stock in the form of stock options, restricted stock awards, restricted stock units, performance share awards as well as awards such as stock appreciation rights, performance units, performance shares, bonus shares, and dividend share awards payable in the form of common stock or cash. The number of shares issuable under the Omnibus Plans is subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. At December 2015, awards with respect to a total of 179,255 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plans and awards with respect to another 45,745 shares may be awarded under the Omnibus Plans.

During Q1 2016, the Company issued 5,500 incentive stock options to various employees, pursuant to the provisions of the Company’s 2014 Omnibus Plan. These awards vest in equal installments over a five year service period. The awards had an estimated fair value at the grant date of approximately $0.1 million using the Black-Scholes option pricing model. The following assumptions were used in connection with the Black-Scholes option pricing calculation as it relates to the Q1 2016 incentive stock option awards:

	Stock Option Pricing Assumptions
	Q1 2016
Risk-free interest rate	1.98	%
Dividend yield	0.9	%
Expected volatility	24.3	%
Expected life in years	6

Stock Options

The stock options issued by the Company expire ten years from the grant date and include graded vesting schedules ranging between three and five years. Stock options issued and outstanding at December 2015 are summarized as follows:

			Remaining			Exercisable
Year Awarded	Exercise Price	Number Outstanding	Weighted-Average Contractual Life	Weighted-Average Exercise Price		Number Exercisable	Weighted-Average Exercise Price
Fiscal 2010	$51.50	3,500	4.33 years	$	51.50	3,500	$	51.50
Fiscal 2012	$53.80 - $65.97	4,900	5.82 years	$	55.04	3,700	$	54.79
Fiscal 2013	$62.33	6,700	6.82 years	$	62.33	4,500	$	62.33
Fiscal 2015	$81.03	6,000	9.08 years	$	81.03	—	—
Fiscal 2016	$83.90	5,500	9.81 years	$	83.90	—	—

		26,600		$	68.24	11,700	$	56.70

Restricted Stock Units

During Q1 2016, the Company issued 13,250 restricted stock unit awards to members of its management team pursuant to the provisions of the Company’s Omnibus Plans. Nonvested restricted stock units at December 2015 are as follows:

	Restricted Stock Units(1)	Restricted Stock Units(2)	Restricted Stock Units(3)
Date of award:	October 2013	October - December 2014	October 2015
Number of awards issued:	17,600	13,000	13,250
Service period:	36-60 months	36 months	36-60 months
Estimated fair value of award at grant date	$1,486,000	$1,083,000	$1,112,000
Awards outstanding at December 2015	6,649	8,668	13,250
Fair value of non-vested awards at December 2015:	$534,000	$696,000	$1,065,000

(1)

10,951 restricted stock units were vested as of December 2015. 4,669 restricted stock units will vest in October 2016. The remaining 1,980 restricted stock units will vest in equal amounts in October 2016, October 2017, and October 2018.

(2)

4,332 of the restricted stock units were vested as of December 2015. The remaining 8,668 restricted stock units will vest in equal amounts in October 2016, and October 2017.

(3)

13,000 of the restricted stock units will vest in equal amounts in October 2016, October 2017, and October 2018. The remaining 250 restricted stock units will vest annually in October 2016 through October 2020.

There is no direct cost to the recipients of the restricted stock units, except for any applicable taxes. The recipients of the restricted stock units are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met.

The restricted stock units provide that the recipients can elect, at their option, to receive either common stock in the Company, or a cash settlement based upon the closing price of the Company’s shares, at the time of vesting. Based on these award provisions, the compensation expense recorded in the Company’s Condensed Statement of Operations reflects the straight-line amortized fair value based on the period end closing price.

	Number of Shares		Weighted Average Fair Value
Nonvested restricted stock units at September 2015	29,977		$	80.00
Granted	13,250		83.90
Vested	(14,660	)	83.95

Nonvested restricted stock units at December 2015	28,567		$	80.35

All Equity-Based Awards (stock options and restricted stock units)

Net income before income taxes included compensation expense of approximately $0.3 million during both Q1 2016 and Q1 2015 related to the amortization of all equity-based compensation awards. Total unamortized compensation expense related to these awards at December 2015 and December 2014 was approximately $2.3 million and $2.2 million, respectively.