Stock Option Plan and Restricted Stock Plan

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Plan and Restricted Stock Plan

15. STOCK OPTION PLAN AND RESTRICTED STOCK PLAN:

The Company has an incentive stock plan to provide for the granting of options to employees of the Company at prices not less than market at the date of grant. At December 31, 2016, the Company had allocated 3,337,000 shares of stock for issuance under the plan. The plan provides that options granted are exercisable after two years from date of grant at a rate of 20% each year cumulatively during the 10-year term of the option. Shares are issued under the stock option plan from available authorized shares. An analysis of stock option activity for the year ended December 31, 2016 is presented in the table and narrative below:

							Weighted- Average
	Shares			Weighted- Average Ex. Price			Remaining Contractual Term (Years)		Aggregate Intrinsic Value ($000)
Outstanding, beginning of year		1,231,346		$	26.70
Granted		—			—
Exercised		(82,871	)		15.69
Cancelled		(54,440	)		(29.52	)
Outstanding, end of year		1,094,035			27.40			6.56	$	19,475
Exercisable at end of year		422,945		$	20.38			4.29	$	10,498

The options outstanding at December 31, 2016, had exercise prices ranging between $13.66 and $33.89. Stock options have been adjusted retroactively for the effects of stock dividends and splits.

The following table summarizes information concerning outstanding and vested stock options as of December 31, 2016:

Exercise Price		Number Outstanding		Remaining Contracted Life (Years)		Number Vested
$	13.66		36,522		0.1		36,522
	16.78		123,473		2.4		123,473
	15.73		180,380		4.8		136,460
	30.85		320,410		6.8		126,490
$	33.89		433,250		8.8		—
			1,094,035				422,945

The fair value of the options granted during 2015 were estimated using the Black-Scholes options pricing model with the following weighted-average assumptions: risk-free interest rate of 1.89%; expected dividend yield of 1.89%; expected life of 5.78 years; and expected volatility of 23.36%.

The weighted-average grant-date fair value of options granted during 2015 was $6.72. There were no grants during 2014 and 2016. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014, was $1,226,000, $1,539,000 and $1,738,000, respectively.

As of December 31, 2016, there was $3,058,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.14 years. The total fair value of shares vested during the years ended December 31, 2016, 2015, and 2014 was $592,000, $810,000 and $382,000.

The aggregate intrinsic value of vested stock options at December 31, 2016 totaled $10,498,000.

On April 28, 2015, shareholders of the Company approved a restricted stock plan for selected employees, officers, non-employee directors and consultants. At December 31, 2016, the Company had allocated 439,000 shares of stock for issuance under the plan.

On July 21, 2015, 7,070 shares were granted to the ten non-employee directors. Total value of these shares totaled $250,000 and was expensed over the period from grant date to April 26, 2016, the next scheduled annual shareholders’ meeting at which the directors’ current term expired. On April 26, 2016, upon re-election of existing directors, 7,660 shares with a total value of $250,000 were granted to the ten non-employee directors and is being expensed over the period from grant day to April 25, 2017, the next scheduled annual shareholders’ meeting at which the current directors’ current term will expire. The Company recorded director expense related to these restricted stock grants of $278,000 and $139,000 for the year ended December 31, 2016 and 2015, respectively.

On October 27, 2015, the Company granted 31,273 shares with a total value of $1,060,000 to certain officers that is being expensed over the vesting period of three years. On October 25, 2016, the Company granted 15,405 shares with a total value of $560,000 to certain officers that is being expensed over the vesting period of three years. The Company recorded restricted stock expense for officers of $381,000 and $62,000, respectively, for the year ended December 31, 2016 and 2015.