6. STOCK OPTIONS

The Company has a stock incentive plan for the issuance of up to 442,750 shares of common stock. The plan provides for granting eligible participants stock options or other stock awards, as described by the plan, at option prices ranging from 85% to 110% of fair market value at date of grant. Options granted expire up to seven years after the date of grant. Such options generally become exercisable over a three year period. A total of 115,573 shares of common stock are reserved for additional grants of options under the plan at December 31, 2013.

Under the plan, the Company charged compensation cost of $13,907 and $17,818 against income in 2013 and 2012, respectively.

As of December 31, 2013, there was approximately $20,000 of unrecognized compensation cost related to unvested share-based compensation awards granted which is expected to be recognized over the next three years.

Proceeds from the exercise of stock options were $89,398 for 2013 and $89,028 for 2012.

The fair value of options granted during 2013 and 2012 were estimated using the Black-Scholes option pricing model with the following assumptions:

	2013	2012

Dividend yield	0%	0%
Expected volatility	43.9%	41.8%
Expected life of option	Five Years	Five Years
Risk-free interest rate	0.7%	0.8%
Fair value of each option on grant date	$4.72	$2.73

There were 4,250 options and 750 options granted during 2013 and 2012, respectively.

FASB ASC 718, Compensation — Stock Compensation specifies that initial accruals be based on the estimated number of instruments for which the requisite service is expected to be rendered. Therefore, the Company is required to incorporate a preexisting forfeiture rate based on the historical forfeiture experience and prospective actuarial analysis, estimated at 3%.

A summary of the status of the Company’s stock option plan as of December 31, 2013 and changes during the year then ended is presented below:

Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at January 1, 2013	21,362		$	6.72
Granted	4,250		12.56
Exercised	(13,695	)	6.53
Expired and forfeited	(500	)	12.56
Outstanding at December 31, 2013	11,417		$	8.87	2.67	$	66,876
Vested or expected to vest at December 31, 2013	11,417		$	8.87	2.67	$	66,876
Exercisable at December 31, 2013	4,166		$	6.57	1.24	$	33,977

The weighted-average grant date fair value of options granted was $4.72 and $2.73 for the years ended December 31, 2013 and 2012, respectively. The total intrinsic value of options exercised was $95,477 for the year ended December 31, 2013 and $32,650 for the year ended December 31, 2012.

The following table summarizes information about stock options outstanding at December 31, 2013:

	Options Outstanding				Options Exercisable
		Weighted-
	Number	Average	Weighted-		Number	Weighted-
Range of	Outstanding at	Remaining	Average		Exercisable at	Average
Exercise	December 31,	Contractual	Exercise		December 31,	Exercise
Price	2013	Life (years)	Price		2013	Price

$ 5.00 - $5.99	1,500	0.31	$	5.00	1,500	$	5.00
$ 7.00 - $7.99	6,167	2.24	$	7.56	2,666	$	7.45
$12.00 - $13.00	3,750	4.31	$	12.56	—	$	—
	11,417	2.67	$	8.87	4,166	$	6.57