NOTE 6 STOCK OPTIONS/STOCK-BASED COMPENSATION

The Company maintains its 2013 Incentive Plan (the "2013 Plan") to provide a means whereby the Company may be able, by granting equity and other types of awards, to attract, retain and motivate capable and loyal employees, non-employee directors, consultants and advisors of the Company, for the benefit of the Company and its shareholders. In May 2015, the Company's shareholders approved an amendment to the 2013 Plan to increase the number of shares available for awards under the 2013 Plan by 2.5 million shares. As of December 31, 2015, there were 1.9 million shares available for future awards under the 2013 Plan.

Restricted Stock Awards

During the years ended December 31, 2015, 2014 and 2013, the Company issued 2,112,998, 299,416 and 353,596, respectively, restricted shares of common stock under the 2013 Plan as compensation to officers, employees and directors of the Company. Unvested restricted shares vest over various terms with all restricted shares vesting no later than March 2019. As of December 31, 2015, there was approximately $9.2 million of total unrecognized compensation expense related to unvested restricted stock that will be recognized over a weighted-average period of approximately 2.4 years. The Company has assumed a zero percent forfeiture rate for restricted stock due to the small number of officers, employees and directors that have received restricted stock awards.

The following table reflects the outstanding restricted stock awards and activity related thereto for the years ended December 31, 2015, 2014 and 2013:

	Year Ended					Year Ended					Year Ended
	December 31, 2015					December 31, 2014					December 31, 2013
	Number			Weighted-		Number			Weighted-		Number			Weighted-
	of			Average		Of			Average		Of			Average
	Shares			Price		Shares			Price		Shares			Price
Restricted Stock Awards:
Restricted Shares Outstanding at the Beginning of the Year		538,499		$	13.54		592,565		$	16.84		777,437		$	18.93
Shares Granted		2,112,998			6.29		299,416			12.09		353,596			15.33
Shares Forfeited		(1,397	)		14.79		-			-		(39,049	)		16.78
Lapse of Restrictions		(284,704	)		12.24		(353,482	)		17.84		(499,419	)		19.03
Restricted Shares Outstanding at the End of the Year		2,365,396		$	7.15		538,499		$	13.54		592,565		$	16.84

Stock Option Awards

On November 1, 2007, the board of directors granted options to purchase 560,000 shares of the Company's common stock under the Company's 2006 Incentive Stock Option Plan. The Company granted options to purchase 500,000 shares of the Company's common stock to members of the board and options to purchase 60,000 shares of the Company's common stock to one employee pursuant to an employment agreement. These options were granted at a price of $5.18 per share and the optionees were fully vested on the grant date. As of December 31, 2015, options to purchase a total of 141,872 shares of the Company's common stock remain outstanding but unexercised. The board of directors determined that no future grants will be made pursuant to the 2006 Incentive Stock Option Plan.

The Company used the Black-Scholes option valuation model to calculate stock-based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. The Company used the simplified method to determine the expected term of the options due to the lack of sufficient historical data. Changes in these assumptions can materially affect the fair value estimate. The total fair value of the options is recognized as compensation over the vesting period. There were no stock options granted by the Company in 2015, 2014 and 2013.

Changes in stock options for the years ended December 31, 2015, 2014, and 2013 were as follows:

	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Term (in Years)		Intrinsic Value
2015:

Beginning Balance		141,872		$	5.18		-	$	-
Granted		-			-		-		-
Exercised		-			5.18		-		-
Forfeited		-			-		-		-
Outstanding at December 31		141,872			5.18		1.8		-
Exercisable		141,872			5.18		1.8		-
Ending Vested		141,872			5.18		1.8		-
Weighted Average Fair Value of Options Granted During Year				$	-

2014:

Beginning Balance		241,872		$	5.18		-	$	-
Granted		-			-		-		-
Exercised		(100,000	)		5.18		-		-
Forfeited		-			-		-		-
Outstanding at December 31		141,872			5.18		2.8		66,680
Exercisable		141,872			5.18		2.8		66,680
Ending Vested		141,872			5.18		2.8		66,680
Weighted Average Fair Value of Options Granted During Year				$	-

2013:

Beginning Balance		251,963		$	5.18		-	$	-
Granted		-			-		-		-
Exercised		(10,091	)		5.18		-		-
Forfeited		-			-		-		-
Outstanding at December 31		241,872			5.18		3.8		2,392,000
Exercisable		241,872			5.18		3.8		2,392,000
Ending Vested		241,872			5.18		3.8		2,392,000
Weighted Average Fair Value of Options Granted During Year				$	-

Currently Outstanding Options

·	No options were forfeited during the years ended December 31, 2015, 2014, and 2013.

·	No options expired during the years ended December 31, 2015, 2014, and 2013.

·	Options covering 141,872 shares were exercisable and outstanding at December 31, 2015.

The Company recorded no compensation expense related to these options for the years ended December 31, 2015, 2014, and 2013. There is no further compensation expense that will be recognized in future periods relative to any options that had been granted as of December 31, 2015, because the Company recognized the entire fair value of such compensation upon vesting of the options.

·	There were no unvested options at December 31, 2015, 2014, and 2013.