Note 14 – Equity and Stock-Based Compensation

Stock-Based Compensation

During the first quarter of 2015 and 2014, we issued 160,643 and 125,209 shares, respectively, of Class A Nonvoting Common Stock to an executive employee associated with the vesting of his prior years’ stock grants. No such grants were made during the second and third quarters of 2015 and 2014.

Employee/Director Stock Option Plan

The Company may grant stock options and other share-based payment awards (“Awards”) of our Class A Nonvoting Common Stock to eligible employees, directors, and consultants under the 2010 Stock Incentive Plan. The aggregate total number of shares of the Class A Nonvoting Common Stock authorized for issuance under our 2010 Stock Incentive Plan is 1,250,000. As of September 30, 2015, we had 663,800 shares remaining for future issuances.

Number of securities remaining available for future issuance under equity compensation plans

Stock options are generally granted at exercise prices equal to the grant-date market prices and expire no later than ten years from the grant date. In recent periods, we have typically limitd the exercise period of granted options to five years. At the discretion of our Compensation and Stock Options Committee, the vesting period of stock options ranges from zero to four years.

We estimate the grant-date fair value of our options using the Black-Scholes option-valuation model, which takes into account assumptions such as the dividend yield, the risk-free interest rate, the expected stock price volatility, and the expected life of the options. We expense the estimated grant-date fair values of options over the vesting period on a straight-line basis. Based on our historical experience and the relative market price to strike price of the options, we have not hereto estimated any forfeitures of vested or unvested options.

For the nine months ended September 30, 2015 and 2014, respectively, the weighted average assumptions used in the option-valuation model were as follows:


	2015		2014
Stock option exercise price	$	13.30	$	7.40
Risk-free interest rate		2.23%	2.88%
Expected dividend yield		--	--
Expected option life in years		4	10
Expected volatility		31.86%	30.65%
Weighted average fair value	$	3.82	$	2.46

We recorded compensation expense of $75,428 and $208,831 for the quarter and nine months ended September 30, 2015, respectively, and $34,000 and $102,000 for the same periods ended September 30, 2014, respectively. At September 30, 2015, the total unrecognized estimated compensation cost related to non-vested stock options was $653,626, which we expect to recognize over a weighted average vesting period of 1.86 years. 336,100 options were exercised during the nine months ended September 30, 2015 having an intrinsic value of $1.7 million, for which we received $2.7 million of cash and other consideration. The intrinsic, unrealized value of all options outstanding, vested and expected to vest, at September 30, 2015 was $2.3 million, of which 58.3% are currently exercisable.

The following table summarizes the information of options outstanding and exercisable as of September 30, 2015 and December 31, 2014:


	Options Outstanding							Exercisable Options
	Number of Options		Weighted Average Exercise Price				Weighted Average Remaining Years of Contractual Life	Number of Options			Weighted Average Exercise Price				Weighted Average Remaining Years of Contractual Life
(Shares in thousands)	Class A	Class B	Class A		Class B		Class A & B	Class A	Class B		Class A		Class B		Class A & B
Balance - December 31, 2014	568	185	$	6.88	$	9.90	2.44	348	185		$	6.82	$	9.90	3.11
Granted	12	--		12.34		--		13	--			--		--
Exercised	(48)	--		6.87		--		(47)	--			--		--
Balance - March 31, 2015	532	185	$	7.01	$	9.90	3.05	314	185		$	7.02	$	9.90	2.64
Granted	100	--		13.42		--		31	--			--		--
Exercised	(90)	(85)		5.29		9.51		(89)	(85)			--		--
Forfeited	(4)	--		6.23		--		(3)	--			--		--
Balance - June 30, 2015	538	100	$	8.49	$	10.24	3.23	253	100		$	7.56	$	10.24	2.41
Granted	-	-		-		-		13	-			-		-
Exercised	(10)	(100)		8.35		10.24		(10)	(100)	(1)		-		-
Forfeited	(4)	-		6.23		-		(2)	-			-		-
Balance - September 30, 2015	524	--	$	8.51		-	3.28	254	--		$	7.46	$	--	2.65

(1) The 100,000 Class B common stock options were exercised by a trust owned by the beneficial owners of the Company.

Common Stock Buyback

On May 16, 2014, the Company's board of directors authorized management, at its discretion, to spend up to an aggregate of $10.0 million to acquire shares of Reading’s Common Stock. This approved stock repurchase plan supersedes and effectively cancels the program that was approved by the board on May 14, 2004, which allowed management to purchase up to 350,000 shares of Reading’s Common Stock.

The repurchase program allows Reading to repurchase its shares in accordance with the requirements of the SEC on the open market, in block trades and in privately negotiated transactions, depending on market conditions and other factors. All purchases are subject to the availability of shares at prices that are acceptable to Reading, and accordingly, no assurances can be given as to the timing or number of shares that may ultimately be acquired pursuant to this authorization.

Under this approved buyback program, the Company has repurchased $7.2 million worth of common stock at an average price of $12.92 per share. This leaves $2.8 million available for repurchase as of September 30, 2015.