5.	Stock-Based Compensation

The Company maintains the

2019

Equity Incentive Plan (the

“2019

Plan”). The

2019

Plan replaced the

1995

Incentive Stock Option Plan (the

"1995

Plan) upon its ratification by shareholders in

April 2019.

The

1995

plan authorized the issuance of up to

442,750

shares of common stock. Of those shares,

16,000

were subject to outstanding options as of

September 30, 2019.

Awards granted under the

1995

Plan will remain in effect until they are exercised or expire according to their terms. At the time the

2019

Plan was approved, there were

102,157

shares reserved for future grants under the

1995

Plan which will

longer be available for future grants.

Under the terms of the

2019

Plan, the number of shares of common stock that

may

be the subject of awards and issued under the

2019

Plan was initially set at

102,157.

Subsequent to the approval of the

2019

Plan,

750

outstanding options granted under the

1995

were forfeited. Under the terms of the

2019

Plan, those forfeited options are added back to the

2019

Plan reserve pool bringing the number of shares of common stock available for future awards under the

2019

Plan to

102,907.

As of

September 30, 2019,

3,250

options have been granted under the

2019

Plan.

The Company charged compensation cost of approximately

$2,500

against the loss for the

three

months ended

September 30, 2019

and approximately

$3,600

for the

three

months ended

September 30, 2018.

For the

first

nine

months of

2019,

the Company charged compensation cost of approximately

$6,300

and approximately

$10,100

for the same period in

2018.

As of

September 30, 2019,

there was approximately

$14,600

of unrecognized compensation cost related to unvested share-based compensation awards. That cost is expected to be recognized over the next

three

years.

The Company receives a tax deduction for certain stock option exercises during the period in which the options are exercised, generally for the excess of the market price at the time the stock options are exercised over the exercise price of the options, which increases additional paid in capital and reduces income taxes payable.

stock options were exercised during the

nine

months ended

September 30, 2019

September 30, 2018.

There were

3,250

options granted during the

nine

months ended

September 30, 2019.

During the

nine

months ended

September 30, 2018,

2,750

options were granted. The fair value of options granted during the

nine

months ended

September 30, 2019

and

2018

was estimated using the Black Scholes option pricing model with the following assumptions:

	2019			2018
Dividend yield		0			0
Expected volatility		37.5	%		40.0	%
Expected life of option (years)		5			5
Risk-free interest rate		1.7	%		2.8	%
Fair value of each option on grant date	$	2.53		$	3.38

Stock option activity during the

nine

months ended

September 30, 2019

was as follows:

				Weighted
				Average
				Exercise
	Shares			Price
Outstanding at January 1, 2019		18,000		$	13.22
Granted		3,250			7.15
Exercised		—			—
Expired and forfeited		(2,000	)		21.69
Outstanding at September 30, 2019		19,250		$	11.32
Exercisable at September 30, 2019		13,415		$	12.83

The aggregate intrinsic value of all options outstanding and exercisable at

September 30, 2019

was

$0.