4) Stock-based Compensation

3 Months Ended

Mar. 31, 2016

Notes

4) Stock-based Compensation

4)      Stock-Based Compensation

The Company has four fixed option plans (the “2003 Plan”, the “2006 Director Plan”, the “2013 Plan” and the “2014 Director Plan”). Compensation expense for options issued of $84,452 and $85,545 has been recognized for these plans for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, the total unrecognized compensation expense related to the options issued in December 2015 was $228,136, which is expected to be recognized over the vesting period of one year.

The Company generally estimates the expected life of the options based upon the contractual term of the options adjusted for actual experience.Future volatility is estimated based upon the a weighted historical volatility of the Company’s Class A common stock and three peer company stocks over a period equal to the estimated life of the options.Common stock issued upon exercise of stock options are generally new share issuances rather than from treasury shares.

A summary of the status of the Company’s stock incentive plans as of March 31, 2016, and the changes during the three months ended March 31, 2016, are presented below:

	Number of Class A Shares	Weighted Average Exercise Price	Number of Class C Shares	Weighted Average Exercise Price
Outstanding at December 31, 2015	618,261	$      3.89	577,436	$      3.54
Granted	-		-
Exercised	(28,460)	2.15	-
Cancelled	-		-
Outstanding at March 31, 2016	589,801	$      3.97	577,436	$      3.54
As of March 31, 2016:
Options exercisable	484,659	$      3.45	498,686	$      2.99
As of March 31, 2016:
Available options for future grant	454,842		57,750
Weighted average contractual term of options
outstanding at March 31, 2016	7.50 years		2.50 years
Weighted average contractual term of options
exercisable at March 31, 2016	7.03 years		2.16 years
Aggregated intrinsic value of options
outstanding at March 31, 2016 (1)	$844,342		$1,096,391
Aggregated intrinsic value of options
exercisable at March 31, 2016 (1)	$844,342		$1,096,391
(1) The Company used a stock price of $5.09 as of March 31, 2016 to derive intrinsic value.

A summary of the status of the Company’s stock incentive plans as of March 31, 2015, and the changes during the three months ended March 31, 2015, are presented below:

	Number of Class A Shares	Weighted Average Exercise Price	Number of Class C Shares	Weighted Average Exercise Price
Outstanding at December 31, 2014	512,795	$      3.20	691,591	$      2.00
Granted	-		-
Exercised	-		(114,023)	2.14
Cancelled	(8,846)	2.31	-
Outstanding at March 31, 2015	503,949	$      3.21	577,568	$      2.62
As of March 31, 2015:
Options exercisable	379,946	$      2.75	471,943	$      2.15
As of March 31, 2015:
Available options for future grant	266,649		-
Weighted average contractual term of options
outstanding at March 31, 2015	7.57 years		2.93 years
Weighted average contractual term of options
exercisable at March 31, 2015	6.91 years		2.30 years
Aggregated intrinsic value of options
outstanding at March 31, 2015 (1)	$1,076,880		$1,572,653
Aggregated intrinsic value of options
exercisable at March 31, 2015 (1)	$988,022		$1,506,415
(1) The Company used a stock price of $5.34 as of March 31, 2015 to derive intrinsic value.

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the three months ended March 31, 2016 and 2015 was $91,989 and $438,989, respectively.