6. STOCKHOLDERS’ EQUITY

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 101,989 shares of common stock are reserved for additional grants of options under the plan as of December 31, 2017.

Under the plan, the Company charged compensation expense of $23,561 and $25,007 against income in 2017 and 2016, respectively.

As of December 31, 2017, there was approximately $17,000 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 $2,000 and $4,000 for 2017 and 2016, respectively.

The fair value of options granted during 2017 and 2016 was estimated using the Black-Scholes option pricing model with the following assumptions:


	2017	2016
Dividend yield	0%	0%
Expected volatility	41.3%	42.4%
Expected life of option	Five Years	Five Years
Risk-free interest rate	1.8%	1.3%
Fair value of each option on grant date	$ 3.43	$ 4.02

There were 2,250 and 4,500 options granted during 2017 and 2016, respectively.

A summary of the status of the Company’s stock option plan as of December 31, 2017 and changes during the year then ended is presented below:



		Weighted
		Average
		Exercise
	Shares	Price
Outstanding at January 1, 2017	16,168	$	14.40
Granted	2,250		8.91
Exercised	(250)		7.54
Outstanding at December 31, 2017	18,168	$	13.81
Exercisable at December 31, 2017	10,499	$	15.41

The weighted-average grant date fair value of options granted was $3.43 and $4.02 for the years ended December 31, 2017 and 2016, respectively. The total intrinsic value of stock options exercised was $490 and $2,160 for the years ended December 31, 2017 and 2016, respectively.

In prior years, the Company’s board of directors had authorized the repurchase of up to 250,000 shares of common stock. A total of 219,589 shares were repurchased under this program including 1,950 shares repurchased during the second quarter of 2017. As of August 2, 2017, the plan allowed for an additional 30,411 shares to be repurchased. On August 3, 2017, the Company’s board of directors approved a new repurchase authorization for up to 100,000 shares of the Company’s common stock, which replaces all prior authorizations. Shares repurchased under this new authorization may be made through open market and privately negotiated transactions from time to time. The new share repurchase authorization does not have an expiration date. Subsequent to August 2, 2017 the Company repurchased 33,500 shares for $278,620. During 2017, the Company repurchased 25,000 shares for $218,750 from a beneficial shareholder holding more than 5% of outstanding common stock.