5. STOCK PLANS

On January 22, 2015, the Board of Directors of the Company declared a 4% stock dividend payable as of March 31, 2015. 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 March 31, 2015:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		313,483		$	11.54
Granted		41,047		$	7.60
Expired		(86,875	)	$	10.00
Cancelled / Forfeited		—			—
Exercised		(19,846	)	$	4.23
Options outstanding at End of Period		247,809		$	12.02	$	236,940		4.65
Exercisable (vested) at End of Period		176,160		$	14.07	$	169,885		2.82

The weighted average grant date fair value per share of options granted during the three-month period ended March 31, 2015 was $2.67 per share.

As of March 31, 2015, there was $182,000 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 3.21 years.

There was $16,000 of recognized compensation cost related to stock options granted for the three months ended March 31, 2015.

A summary of the weighted average assumptions used in valuing stock options during the three months ended March 31, 2015 is presented below:

	Three Months Ended
	March 31, 2015
Risk Free Interest Rate		1.61	%

Expected Dividend Yield		0.00	%

Expected Life in Years		5

Expected Price Volatility		37.38	%

The following table presents the activity related to non-vested restricted stock for the three months ended March 31, 2015:

	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		73,827		$	5.64
Granted		30,056		$	7.59
Cancelled/Forfeited		—			—
Exercised/Released/Vested		(18,304	)	$	4.66
Non-vested restricted stock outstanding at End of Period		85,579		$	6.54	$	676,074		8.74

The weighted average fair value of restricted stock granted during the three month period ended March 31, 2015 was $7.59 per share.

As of March 31, 2015, there was $402,000 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 3.17 years.

There was $36,000 of recognized compensation cost related to restricted stock awards for the three month ended March 31, 2015.

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 322,385 (adjusted for the 2015 stock dividend) shares authorized under the ESPP. The ESPP will expire 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, 2014 to November 23, 2015. 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 March 31, 2015, there was $16,000 of unrecognized compensation cost related to ESPP issuances. This cost is expected to be recognized over a weighted average period of approximately 0.75 years.

There was $7,000 of recognized compensation cost related to ESPP issuances for the three-month period ended March 31, 2015.

The weighted average fair value at issuance date during the three-month period ended March 31, 2015 was $1.67.

A summary of the weighted average assumptions used in valuing ESPP issuances during the three months ended March 31, 2015 is presented below:

	Three Months Ended
	March 31, 2015
Risk Free Interest Rate		0.14	%

Expected Dividend Yield		0.00	%

Expected Life in Years		1.00

Expected Price Volatility		15.10	%