12. Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Weighted average amortization period of identified intangible assets of finite useful life

12. Stockholders' Equity

Dividend Declared

Dividends declared and paid on Common Stock were $1,557,398 and $1,312,625 for the years ended December 31, 2015 and 2014, respectively. The Company’s Board of Directors approved a quarterly dividend on February 4, 2016 of $.0625 per share payable in cash on March 15, 2016 to stockholders of record as of February 29, 2016 (see Note 20).

Stock Options

Pursuant to the Company’s 2005 Equity Participation Plan (the “2005 Plan”), which provides for the issuance of incentive stock options, non-statutory stock options and restricted stock, a maximum of 700,000 shares of the Company’s Common Stock are permitted to be issued pursuant to options granted and restricted stock issued. The 2005 Plan terminated on October 10, 2015 (except for options already granted), ten years after its effective date. Effective August 12, 2014, the Company adopted the 2014 Equity Participation Plan (the “2014 Plan”) pursuant to which, subject to stockholder approval on or before August 12, 2015, a maximum of 700,000 shares of Common Stock of the Company are authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and stock bonuses.  The stockholders approved the 2014 Plan on August 11, 2015. Incentive stock options granted under the 2014 Plan and 2005 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). The Board of Directors or the Stock Option Committee determines the expiration date with respect to non-statutory stock options and the vesting provisions for restricted stock granted under the 2014 Plan and 2005 Plan.

The results of operations for the years ended December 31, 2015 and 2014 include stock-based compensation expense totaling $134,185 and $171,876, respectively. Stock-based compensation expense related to stock options for the years ended December 31, 2015 and 2014 is net of estimated forfeitures of approximately 17% and 20%, respectively. Such amounts have been included in the consolidated statements of income and comprehensive income within other operating expenses.

Stock-based compensation expense in 2015 and 2014 is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award. The weighted average estimated fair value of stock options granted during the years ended December 31, 2015 and 2014 was $1.87 and $1.60 per share, respectively. The fair value of stock options at the grant date was estimated using the Black-Scholes option-pricing model. The following weighted average assumptions were used for grants during the following periods:

	Years ended
	December 31,
	2015			2014
Dividend Yield		2.62	%		2.97	%
Volatility		34.54	%		40.53	%
Risk-Free Interest Rate		1.03	%		0.92	%
Expected Life	3.0 years			3.25 years

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our stock options.

A summary of stock option activity under the Company’s 2005 Plan and 2014 Plan for the year ended December 31, 2015 is as follows:

Stock Options	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2015		421,250		$	5.16		3.13	$	1,258,013
Granted (1)		50,000		$	6.73			$	113,500
Exercised		(127,750	)	$	2.66			$	677,713
Forfeited		(3,750	)	$	5.09			$	32,150
Outstanding at December 31, 2015		339,750		$	6.34		3.36	$	904,775
Vested and Exercisable at December 31, 2015		191,625		$	6.21		3.30	$	534,094

(1)   On August 12, 2014, 50,000 options were awarded under the 2014 Plan, which were subject to stockholder approval. Stockholder approval of the 2014 Plan was obtained on August 11, 2015.

The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2015 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Common Stock for the options that had exercise prices that were lower than the $9.00 closing price of the Company’s Common Stock on December 31, 2015. The total intrinsic value of options exercised in the year ended December, 2015 was $677,713, determined as of the date of exercise.

Participants in the 2005 Plan and 2014 Plan may exercise their outstanding vested options, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the option being exercised (“Net Exercise”). All of the 127,750 options exercised during the year ended December 31, 2015 were Net Exercises. A total of 100,115 options were exercised during the year ended December 31, 2014. The Company received cash proceeds of $5,877 from the exercise of options for the purchase of 2,500 shares of Common Stock in the year ended December 31, 2014. The remaining 97,615 options exercised in 2014 were Net Exercises.

As of December 31, 2015 and 2014, the fair value of unamortized compensation cost related to unvested stock option awards was approximately $101,000 and $156,000, respectively. Unamortized compensation cost as of December 31, 2015 is expected to be recognized over a remaining weighted-average vesting period of 1.31 years.

As of December 31, 2015, there were 650,000 shares reserved under the 2014 Plan.

Other Equity Compensation

For the years ended December 31, 2015 and 2014, there was no other equity compensation.