5. STOCK PLANS

On January 28, 2016, the Board of Directors of the Company declared a 4% stock dividend payable as of March 31, 2016. 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, 2016.

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value			Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		229,952		$	8.26
Granted		—			—
Expired		—			—
Cancelled / Forfeited		—			—
Exercised		(11,132	)		4.70
Options outstanding at End of Period		218,820		$	8.44		$	275,107		6.08
Exercisable (vested) at End of Period		114,830		$	9.37		$	207,478		3.70

The following table presents the activity related to stock options for the nine months ended September 30, 2016.

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value			Weighted Average Remaining Contractual Term (in years)
Options outstanding at Beginning of Period		227,364		$	10.74
Granted		56,199		$	7.82
Expired		(53,611	)	$	18.29
Cancelled / Forfeited		—			—
Exercised		(11,132	)		4.70
Options outstanding at End of Period		218,820		$	8.44		$	275,107		6.08
Exercisable (vested) at End of Period		114,830		$	9.37		$	207,478		3.70

The weighted average grant date fair value per share of options granted during the nine months ended September 30, 2016 was $2.13 per share.

As of September 30, 2016, there was $191,000 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 2.74 years.

There was $63,000 of recognized compensation cost related to stock options granted for the nine months ended September 30, 2016.

A summary of the weighted average assumptions used in valuing stock options during the three and nine months ended September 30, 2016 is presented below:

	Three Months Ended September 30, 2016*		Nine Months Ended September 30, 2016
Risk Free Interest Rate		—		1.23	%

Expected Dividend Yield		—		0.00	%

Expected Life in Years		—		5

Expected Price Volatility		—		28.41	%

* There were no stock options granted during the three months ended September 30, 2016.

The following table presents the activity related to non-vested restricted stock for the three months ended September 30, 2016.

	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		96,801		$	6.98
Granted		—			—
Cancelled / Forfeited		(1,393	)	$	7.42
Exercised/Released/Vested		—			—
Non-vested restricted stock outstanding at End of Period		95,408		$	6.97	$769,943	2.68

The following table presents the activity related to non-vested restricted stock for the nine months ended September 30, 2016.

	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		86,376		$	6.31
Granted		28,701		$	7.82
Cancelled / Forfeited		(1,705	)	$	7.49
Exercised/Released/Vested		(17,964	)	$	5.09
Non-vested restricted stock outstanding at End of Period		95,408		$	6.97	$769,943	2.68

The weighted average fair value of restricted stock granted during the nine months ended September 30, 2016 was $7.82 per share.

As of September 30, 2016, there was $368,000 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 2.68 years. There was $131,000 of recognized compensation cost related to restricted stock awards for the nine months ended September 30, 2016.

The Company has an Employee Stock Purchase Plan ("ESPP"). There are 260,000 shares authorized under the ESPP. The total number of shares authorized has been adjusted to give retroactive effect to stock dividends and stock splits, including the 4% stock dividend declared on January 28, 2016, payable March 31, 2016 to shareholders of record as of February 29, 2016. The ESPP will expire on March 16, 2026. The ESPP is implemented by participation periods of not more than 27 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 December 10, 2015 to December 9, 2016. 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, 2016, 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 $14,000 of recognized compensation cost related to ESPP issuances for the nine months ended September 30, 2016.

The weighted average fair value at issuance date during the nine months ended September 30, 2016 was $1.50 per share.

A summary of the weighted average assumptions used in valuing ESPP issuances during the three and nine months ended September 30, 2016 is presented below.

	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
Risk Free Interest Rate		0.71	%		0.71	%

Expected Dividend Yield		0.00	%		0.00	%

Expected Life in Years		1.00			1.00

Expected Price Volatility		9.51	%		9.51	%