Stock Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Based Compensation

Note 10: Stock Based Compensation

The shareholders of the Company voted at the Company’s Annual Meeting, April 13, 2010 to approve the 2010 Omnibus Stock Incentive Plan, including 363,000 shares (adjusted for a 10% stock dividend declared on August 26, 2010 and a 10% stock dividend declared on August 27, 2015) reserved under the plan (copy of the plan was filed with 2010 Proxy Statement). This plan is intended to assist the Company in recruiting and retaining employees with ability and initiative by enabling employees to participate in its future success and to align their interest with those of the Company and its shareholders. Under the Omnibus Stock Incentive Plan, options are periodically granted to employees at a price not less than 100% of the fair market value of the shares at the date of the grant. All employees are eligible to participate in this plan if the Executive Committee, in its sole discretion, determines that such person has contributed or can be expected to contribute to the profits or growth of the Company or its subsidiary. Options may be exercised in whole at any time or in part from time to time at such times and in compliance with such requirements as the Executive Committee shall determine. The maximum period in which an option may be exercised is determined at the date of grant and shall not exceed 10 years from the date of grant.

The options are not transferable except by will or by the laws of descent and distribution.

On April 23, 2015, the Executive Committee granted options to purchase an aggregate of 20,350 shares to nine employees. Fair value was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield 4.13%, historical volatility 19.62%, risk free interest rate of 1.96%. In addition, the Executive Committee granted options to purchase 3,300 shares to an employee on June 29, 2015. Fair value was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield 4.13%, historical volatility 19.62%, risk free interest rate of 1.96%.

On July 24, 2014, the Executive Committee granted options to purchase an aggregate of 11,000 shares to twelve employees. Fair value was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield 3.74%, historical volatility 31.69%, risk free interest rate of 2.52% and an expected life of 10 years.

On April 14, 1998, the Company adopted the 1998 Omnibus Stock Incentive Plan which expired on April 14, 2008. Options can no longer be granted under the 1998 Plan. Options granted before April 14, 2008, shall remain valid in accordance with their terms. There are currently options to purchase 19,017 shares outstanding under this plan with options to purchase 13,209 shares exercisable.

All of the above shares subject to options have been adjusted to reflect a 10% stock dividend declared on August 27, 2015.

Under both plans, employees become 20% vested after five years and vest 20% each year until fully vested. The right to exercise each such 20% of the options is cumulative and will not expire until the tenth anniversary of the date of the grant.

The following is a summary of the activity under the 1998 and 2010 Omnibus Stock Incentive Plan for the three and nine months ended September 30, 2015 and for the three and nine months ended September 30, 2014.

Three Months Ended September 30, 2015	Options			Weighted Average Exercise Price
Balance at July 1, 2015	187,042		$	10.84
Forfeited	(1,925	)		13.49
Balance at September 30, 2015	185,117			10.81
Nine months Ended September 30, 2015	Options			Weighted Average Exercise Price
Balance at January 1, 2015	176,181		$	10.48
Forfeited	(6,326	)		11.88
Exercised	(8,388	)		13.51
Granted	23,650			14.48
Balance at September 30, 2015	185,117			10.81
Three months Ended September 30, 2014	Options			Weighted Average Exercise Price
Balance at July 1, 2014	168,206		$	10.03
Granted	11,000			13.49
Forfeited	(1,375	)		11.67
Balance at September 30, 2014	177,831			10.23
Nine months Ended September 30, 2014	Options			Weighted Average Exercise Price
Balance at January 1, 2014	175,081		$	10.03
Granted	11,000			13.49
Forfeited	(5,500	)		10.73
Exercised	(2,750	)		9.47
Balance at September 30, 2014	177,831			10.23
Options exercisable at September 30, 2015	13,209		$	13.41

All shares and exercise prices per share have been adjusted to reflect a 10% stock dividend declared on August 27, 2015.