NOTE 15 – STOCK INCENTIVE PLANS

During 2005, the stockholders approved the 2004 Equity Incentive Plan (the “2004 Plan”) to provide equity incentives to selected persons. Awards may be granted to employees, officers, directors, consultants and advisors of the Company or subsidiary. Awards granted under the 2004 Plan may be either stock options or restricted stock awards and are designated at the time of grant. Options granted under the 2004 Plan to directors, consultants and advisors are non-qualified stock options. Options granted to officers and other employees may be incentive stock options or non-qualified stock options. Restricted stock awards may be made to any plan participant. As of December 31, 2014, there were no authorized shares available for future grants under the 2004 Plan.

During 2013, the stockholders approved the 2013 Equity Incentive Plan (the “2013 Plan”) to provide equity incentives to selected persons. Awards may be granted to employees, officers, directors, consultants and advisors of the Company or subsidiary. Awards granted under the 2013 Plan may be either stock options or restricted stock awards and are designated at the time of grant. Restricted stock awards may be made to any plan participant. As of December 31, 2014, there were 233,178 shares available for future grants under the 2013 Plan.

Information regarding the Company's restricted stock grants activity for the years ended December 31, 2014 and 2013 are as follows:


	2014			2013
			Weighted			Weighted
			Average			Average
	Number of		Grant Date	Number of		Grant Date
	Shares		Fair Value	Shares		Fair Value

Unvested restricted stock, beginning of year	125,922	$	4.98	123,144	$	4.83
Granted	36,043		8.81	32,940		6.06
Forfeited	(2,550)		7.20	-		-
Vested	(46,870)		5.21	(30,162)		4.95
Unvested restricted stock, end of period	112,545	$	6.06	125,922	$	4.98

Total stock-based compensation related to restricted stock awards was $300 thousand and $236 thousand for the years ended December 31, 2014 and December 31, 2013, respectively. As of December 31, 2014 and 2013, there were $439 thousand and $438 thousand, respectively, of unrecognized compensation cost related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of 1.7 years and 2.3 years.

Options granted to officers and other employees and which are incentive stock options, are subject to limitations under Section 422 of the Internal Revenue Code. The option price under each such grant shall not be less than the fair market value on the date of the grant. No option will be granted for a term in excess of ten years. The Company established a vesting schedule that must be satisfied before the options may be exercised.

As of December 31, 2014, there were 10,525 options outstanding which will expire between January 2015 and October 2015.

Stock option transactions under all plans are summarized as follows:


			Weighted
			Average	Weighted
			Exercise	Average		Aggregate
	Number of		Price per	Contractual		Intrinsic
	Shares		Share	Term		Value

Outstanding, December 31, 2012	55,751	$	12.48
Options expired	(18,933)		8.93
Options forfeited	(4,069)		14.27
Outstanding, December 31, 2013	32,749		14.31
Options granted	36,000		9.97
Options expired	(22,224)		14.97
Outstanding, December 31, 2014	46,525	$	10.63	7.7	$	8,280
Exercisable, December 31, 2014	10,525	$	12.91	0.5	$	-

The following table summarizes information about stock options outstanding and exercisable at December 31, 2014:


		Weighted
Exercise	Number	Average Remaining	Number
Price	Outstanding	Life (Years)	Exercisable

9.97	36,000	9.9	-
12.63	6,708	0.8	6,708
13.39	3,817	0.1	3,817
	46,525	7.7	10,525

There were no stock options exercised during 2014 and options outstanding and exercisable had no intrinsic value at December 31, 2014.

The following table summarizes information about stock option assumptions:


	December 31, 2014

Expected dividend yield		1.20%
Expected volatility		34.47%
Risk-free interest rate		1.55%
Expected option life		10.0 Years

Total stock-based compensation related to stock options was $4 thousand for the year ended December 31, 2014.

The weighted average grant date fair value of options granted during the year ended December 31, 2014 was $9.51 per share. Expected future expense relating to the non-vested options outstanding as of December 31, 2014 is $131 thousand over a weighted average period of 4.9 years. Upon exercise of vested options, management expects to draw on treasury stock as the source of the shares.