5.	STOCK PLANS

On January 23, 2014, the Board of Directors of the Company declared a 3% stock dividend payable as of March 31, 2014. All stock options and restricted stock outstanding have been adjusted to give retroactive effect to stock dividends.

The following table presents the activity related to stock options for the three months ended September 30, 2014:

	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		301,457	$	12.01

Granted		—		—

Expired		—		—

Cancelled / Forfeited		—		—

Exercised		—		—

Options outstanding at End of Period		301,457	$	12.01	$	231,049		3.21

Exercisable (vested) at End of Period		253,265	$	13.13	$	160,204		2.20

The following table presents the activity related to stock options for the nine months ended September 30, 2014:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		368,177		$	11.52

Granted		18,967		$	7.28

Expired		(85,687	)	$	8.89

Cancelled / Forfeited		—			—

Exercised		—			—

Options outstanding at End of Period		301,457		$	12.01	$	231,049		3.21

Exercisable (vested) at End of Period		253,265		$	13.13	$	160,204		2.20

The weighted average grant date fair value per share of options granted during the nine-month period ended September 30, 2014 was $3.03 per share.

As of September 30, 2014, there was $103,000 of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of approximately 2.68 years.

There was $35,000 of recognized compensation cost related to stock options granted for the nine months ended September 30, 2014.

A summary of the weighted average assumptions used in valuing stock options during the three months and nine months ended September 30, 2014 is presented below:

	Three Months Ended		Nine Months Ended
	September 30, 2014*		September 30, 2014
Risk Free Interest Rate		—		1.53	%

Expected Dividend Yield		—		0.00	%

Expected Life in Years		—		5

Expected Price Volatility		—		45.93	%

* There were no stock options granted during the three-month period ended September 30, 2014.

The following table presents the activity related to non-vested restricted stock for the three months ended September 30, 2014:

	Number of Shares		Weighted Average Grant-Date Fair Value		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Non-vested Restricted stock outstanding at Beginning of Period		71,013	$	5.87

Granted		—		—

Cancelled / Forfeited		—		—

Exercised/Released/Vested		—		—

Non-vested restricted stock outstanding at End of Period		71,013	$	5.87	$	536,148		8.22

The following table presents the activity related to non-vested restricted stock for the nine months ended September 30, 2014:

	Number of Shares			Weighted Average Grant-Date Fair Value		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Non-vested Restricted stock outstanding at Beginning of Period		61,541		$	4.88

Granted		24,890		$	7.28

Cancelled / Forfeited		(4,230	)	$	4.74

Exercised/Released/Vested		(11,188	)	$	4.01

Non-vested restricted stock outstanding at End of Period		71,013		$	5.87	$	536,148		8.22

The weighted average fair value of restricted stock granted during the nine month period ended September 30, 2014 was $7.28 per share.

As of September 30, 2014, there was $244,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 2.75 years.

There was $81,000 of recognized compensation cost related to restricted stock awards for the nine month ended September 30, 2014.

The Company has an Employee Stock Purchase Plan (“ESPP”). Under the ESPP, the Company is authorized to issue to eligible employees shares of common stock. There are 309,986 (adjusted for the 2014 stock dividend) shares authorized under the ESPP. The ESPP will terminate March 15, 2016. The ESPP is implemented by participation periods of not more than twenty-seven months each. The Board of Directors determines the commencement date and duration of each participation period. The Board of Directors approved the current participation period of November 24, 2013 to November 23, 2014. An eligible employee is one who has been continually employed for at least 90 days prior to commencement of a participation period. Under the terms of the ESPP, employees can choose to have up to 10 percent of their compensation withheld to purchase the Company’s common stock each participation period. The purchase price of the stock is 85 percent of the lower of the fair value on the last trading day before the date of participation or the fair value on the last trading day during the participation period.

As of September 30, 2014, there was $4,000 of unrecognized compensation cost related to ESPP issuances. This cost is expected to be recognized over a weighted average period of approximately 0.25 years.

There was $23,000 of recognized compensation cost related to ESPP issuances for the nine-month period ended September 30, 2014.

The weighted average fair value at issuance date during the nine-month period ended September 30, 2014 was $1.56.

A summary of the weighted average assumptions used in valuing ESPP issuances during the three months and nine month ended September 30, 2014 is presented below:

	Three Months Ended			Nine Months Ended
	September 30, 2014			September 30, 2014
Risk Free Interest Rate		0.12	%		0.12	%

Expected Dividend Yield		0.00	%		0.00	%

Expected Life in Years		1.00			1.00

Expected Price Volatility		20.00	%		20.00	%