STOCK INCENTIVE PLAN

12 Months Ended

Dec. 31, 2015

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

STOCK INCENTIVE PLAN

14. Stock Incentive Plan

We have a Stock Incentive Plan which was approved in 1998 with 180,000 (329,422 adjusted for three 10% stock dividends, a 10% stock distribution, and a 25% stock dividend) shares reserved and a Stock Incentive Plan which was approved in 2010 with 300,000 (330,000 adjusted for on 10% stock dividend) shares reserved. Under both Plans, options are periodically granted to employees at a price not less than the fair market value of the shares at the date of grant. Employees become 20% vested after five years and then 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. 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 our profits or growth.

Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of our common stock. The expected term of the options granted shall not exceed ten years from the date of grant (the amount of time options granted are expected to be outstanding). The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted was determined using the following weighted-average assumptions as of grant date:

	2015					2014			2013
Risk free interest rate		1.96	%	2.33	%		2.94	%		2.49	%	2.94	%
Expected life (in years)		10		10			10			10		10
Expected stock price volatility		19.62	%	19.62	%		36.34	%		36.34	%	36.34	%
Dividend yield		4.13	%	4.13	%		3.98	%		3.98	%	3.98	%

There are currently options to purchase 19,017 shares outstanding and exercisable under the 1998 Omnibus Stock Incentive Plan with options to purchase 15,637 shares exercisable at December 31, 2015. This plan has expired, however, those shares granted before the expiration date may still be exercised.

The following table presents a summary of the activity under the 1998 and 2010 Omnibus Stock Incentive Plans for the years ended December 31:

	2015					2014					2013
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding, January 1		176,181		$	10.48		175,081		$	10.31		191,913		$	10.18
Granted		23,650			14.44		11,000			13.49		7,700			12.25
Expired		(7,150	)		11.64		(7,150	)		11.15		(10,618	)		10.83
Exercised		(9,378	)		13.11		(2,750	)		9.74		(13,914	)		9.24
Outstanding, December 31		183,302		$	10.81		176,181		$	10.48		175,081		$	10.31
Exercisable at year end		17,457		$	12.95		19,012		$	13.39		11,797		$	14.90

All information has been retroactively adjusted for the 2015 10% stock dividend.

The following table presents information pertaining to options outstanding at December 31, 2015:

December 31, 2015
Exercise Price:		Number of Options Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Intrinsic Value of Outstanding Options		Number of Options Exercisable		Weighted Average Exercise Price		Intrinsic Value of Exercisable Options
$	13.74		8,347		0.4	$	13.74	$	19,365		8,347	$	13.74	$	19,365
$	13.22		6,050		1.0	$	13.22	$	17,182		4,840	$	13.22	$	4,332
$	12.48		2,420		1.5	$	12.48	$	8,664		1,210	$	12.48	$	13,746
$	11.73		2,200		2.2	$	11.73	$	9,526		1,240	$	11.73	$	5,369
$	9.79		13,310		4.7	$	9.79	$	83,454		1,820	$	9.79	$	11,411
$	10.61		5,500		5.2	$	10.61	$	29,975		—	$	—	$	—
$	9.47		100,100		5.5	$	9.47	$	659,659		—	$	—	$	—
$	10.10		9,075		6.6	$	10.10	$	54,087		—	$	—	$	—
$	10.91		2,750		6.9	$	10.91	$	14,162		—	$	—	$	—
$	11.67		1,100		7.6	$	11.67	$	4,829		—	$	—	$	—
$	13.64		2,200		7.9	$	13.64	$	5,324		—	$	—	$	—
$	13.49		6,600		8.6	$	13.49	$	16,962		—	$	—	$	—
$	14.35		20,350		9.5	$	14.35	$	34,798		—	$	—	$	—
$	14.98		3,300		9.6	$	14.98	$	3,564		—	$	—	$	—
			183,302		5.71	$	10.81	$	961,551		17,457	$	12.95	$	54,223

All information has been retroactively adjusted for the 2015 10% stock dividend.

The total intrinsic value of options exercised during the years ended December 31, 2015, 2014, and 2013, were $14,272, $12,775, and $43,156, respectively.

We recognized compensation cost for the years ended December 31, 2015, 2014 and 2013 in the amount of $78,987, $74,908, and $74,722, respectively, related to the granted options.

As of December 31, 2015, there was a total of $392,031 in unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. The cost is expected to be recognized over a weighted average period of 5.71 years.