Stock Options

In 2014, the Company adopted the 2014 Equity Incentive Plan designed to help the Company attract, retain, and motivate employees and non-employee directors. Incentive stock options, non-qualified stock options, and restricted stock may be granted as part of the plan.

On August 27, 2015, the Company issued 38,750 stock options with a strike price of $42.03 to employees that have a five year vesting period and expire ten years from the grant date. On March 24, 2017, the Company issued 70,000 stock options in total, to a group of employees, that have a strike price of $44.21. The options granted in 2017 all expire ten years from the grant date however, of the 70,000 grants awarded, 46,250 of the options have a three year vesting period while the remaining 23,750 options vest in five years.



Stock Options Granted
Date	Shares	Forfeited		Outstanding	Strike Price		Vesting Period	Expiration
March 24, 2017	46,250	—		46,250	$	44.21	3 years	10 years
March 24, 2017	23,750	—		23,750	44.21		5 years	10 years
August 27, 2015	38,750	(12,250	)	26,500	42.03		5 years	10 years

A summary of stock option activity is presented below:



	March 31, 2017			March 31, 2016
	Shares	Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding, beginning of year	26,500	$	42.03	34,750		$	42.03
Granted	70,000	44.21		—		—
Exercised	—	—		—		—
Forfeited	—	—		(2,250	)	42.03
Expired	—	—		—		—
Outstanding, end of year	96,500	$	43.61	32,500		$	42.03

Exercisable, end of year	—	$	—	—		$	—

The estimated fair value of options, including the effect of estimated forfeitures, is recognized as expense on a straightline basis

over the options’ vesting periods while ensuring that the cumulative amount of compensation cost recognized at least equals the

value of the vested portion of the award at that date. The Company determines the fair value of options granted using the Black-Scholes option-pricing model. The risk-free interest rate is based on the United States Treasury bond with a similar term to the expected life of the options at the grant date. Expected volatility was estimated based on the adjusted historic volatility of the Company’s shares. The expected life was estimated to equal the contractual life of the options. The dividend yield rate was based upon recent historical dividends paid on shares.