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 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 104,239 shares of common stock are reserved for additional grants of options under the plan as of December 31, 2016.

Under the plan, the Company charged compensation expense of $25,007 and $21,743 against income in 2016 and 2015, respectively.

As of December 31, 2016, there was approximately $33,000 of unrecognized compensation expense 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 approximately $3,800 for 2016. There was no exercise of stock options in 2015.

The fair value of options granted during 2016 and 2015 was estimated using the Black-Scholes option pricing model with the following assumptions:


	2016	2015
Dividend yield	0%	0%
Expected volatility	42.4%	42.3% - 42.4%
Expected life of option	Five Years	Five Years
Risk-free interest rate	1.3%	1.4% - 1.5%
Fair value of each option on grant date	$ 4.02	$5.43 - $6.14

There were 4,500 options and 7,250 options granted during 2016 and 2015, 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, 2016 and changes during the year then ended is presented below:



		Weighted
		Average
		Exercise
	Shares	Price
Outstanding at January 1, 2016	12,168	$	15.47
Granted	4,500		10.75
Exercised	(500)		7.53
Outstanding at December 31, 2016	16,168	$	14.40
Exercisable at December 31, 2016	6,417	$	15.41

The weighted-average grant date fair value of options granted was $4.02 and $5.92 for the years ended December 31, 2016 and 2015, respectively. The total intrinsic value of stock options exercised was $2,160 for the year ended December 31, 2016. No stock options were exercised in 2015.