NOTE 14 – SHARE-BASED COMPENSATION AND SHARE REPURCHASE PLANS

2010 Stock Incentive Plan

The Company may grant stock options and other share-based payment awards of our Class A Stock to eligible employees, directors, and consultants under the 2010 Stock Incentive Plan (the “2010 Plan”), which originally allows for an aggregate total number of 1,250,000 shares of Class A Nonvoting Common Stock authorized for issuance under the 2010 Plan. As of September 30, 2017, there were 302,540 shares authorized for issuance under the 2010 Plan and available for future grants or awards.

During the Company’s 2017 Annual Stockholders’ Meeting held on November 7, 2017, the Company's stockholders, upon recommendation of the Board of Directors, approved an amendment to the Company's 2010 Plan to increase the number of shares of common stock issuable under such plan by an additional 947,460 shares. The effect of the increase is to restore the amount of shares of Class A Common Stock available under the 2010 Stock Incentive Plan from the 302,540 shares available as of September 30, 2017, back up to its original reserve of 1,250,000 shares. There were no new grants during the 4th quarter of 2017. During 2018 option grants of 126,840 were issued, and restricted stock units of 97,600 issued. Accordingly, as of December 31, 2018, we had 1,031,970 shares remaining for future issuances.

Since the adoption of the 2010 Plan, the Company has granted awards primarily in the form of stock options or stock grants. In the first quarter of 2016, the Company started to award restricted stock units (“RSUs”) to directors and certain members of management. Stock options are generally granted at exercise prices equal to the grant-date market prices and typically expire no later than five years from the grant date. In contrast to a stock option where the grantee buys the Company’s share at an exercise price determined on grant date, an RSU entitles the grantee to receive one share for every RSU based on a vesting plan. At the discretion of our Compensation and Stock Options Committee, the vesting period of stock options and RSUs ranges from zero to four years. At the time the options are exercised or RSUs vest, at the discretion of management, we will issue treasury shares or make a new issuance of shares to the option or RSU holder.

Stock Options

We estimate the grant-date fair value of our stock 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.

The weighted average assumptions used in the option-valuation model for the years 2018, 2017 and 2016 were as follows:



	2018		2017		2016
Stock option exercise price	$	16.40	$	15.94	$	11.87
Risk-free interest rate		2.56%		1.66%		1.20%
Expected dividend yield		—		—		—
Expected option life in years		3.75		3.75		3.75
Expected volatility		24.99%		24.95%		25.01%
Weighted average fair value	$	3.80	$	3.45	$	2.49

We recorded compensation expense of $425,000, $310,000, and $284,000 for 2018, 2017, and 2016, respectively. At December 31, 2018, the total unrecognized estimated compensation cost related to non-vested stock options was $881,000 which is expected to be recognized over a weighted average vesting period of 1.81 years. Cash and other consideration received from option exercises during 2018, 2017, and 2016 totaled $361,000, $574,000 and $146,000 respectively.

The following is a summary of the status of RDI’s outstanding stock options for the three years ended December 31, 2018:



	Outstanding Stock Options
	Number of Options		Weighted Average Exercise Price				Weighted Average Remaining Years of Contractual Life	Aggregate Intrinsic Value
	Class A	Class B	Class A		Class B		Class A&B	Class A&B
Outstanding - January 1, 2016	486,565	—	$	8.68	$	—	2.89	$	2,188,011
Granted	169,327	—		11.87		—
Exercised	(46,815)	—		9.50		—			220,002
Expired	(74,000)	—		7.02		—
Outstanding - December 31, 2016	535,077	—	$	9.84	$	—	2.61	$	3,615,191
Granted	169,762	—		15.94		—
Exercised	(177,750)	—		7.85		—			702,840
Expired	(2,500)	—		6.23		—
Outstanding - December 31, 2017	524,589	—	$	12.50	$	—	3.15	$	3,054,325
Granted	126,840	—		16.40		—
Exercised	(60,000)	—		6.02		—			610,249
Expired	(4,960)	—		12.08		—
Outstanding - December 31, 2018	586,469	—	$	14.01	$	—	2.88	$	1,530,528

The following is a summary of the status of RDI’s vested and unvested stock options as of December 31, 2018, 2017 and 2016:



	Vested and Unvested Stock Options
	Number of Options		Weighted Average Exercise Price				Weighted Average Remaining Years of Contractual Life	Aggregate Intrinsic Value
	Class A	Class B	Class A			Class B	Class A&B	Class A&B
Vested
December 31, 2018	231,124	—	$	12.38	$	—	2.28	$	1,306,643
December 31, 2017	186,832	—		9.84		—	2.30		2,202,772
December 31, 2016	296,500	—		7.88		—	1.59		2,584,500
Unvested
December 31, 2018	355,345	—	$	15.07	$	—	3.27	$	223,885
December 31, 2017	337,757	—		13.86		—	3.62		851,552
December 31, 2016	238,577	—		12.28		—	3.87		1,030,691

Termination of Previous President’s Unvested Stock Options

Mr. James Cotter, Jr. has asserted in past communications with the Company that options to acquire 50,000 shares of Class A Stock, issued to him in connection with his retention as the President of our Company, survived his termination as President. On August 3, 2016, our Compensation and Stock Options Committee met, reviewed the issue and determined that such 50,000 options had in fact terminated with the termination of Mr. Cotter, Jr.’s employment as President. Accordingly, these options are not, and have not been outstanding since the effective date of Mr. Cotter, Jr’s termination. This was recorded as a forfeiture during the quarter ended September 30, 2016. Mr. Cotter, Jr., attempted to assert his claims with respect to such shares in the arbitration related to the payment of his severance benefits. The arbitrator determined that such claims were beyond the scope of the arbitration, and made no substantive determination with respect to Mr. Cotter, Jr’s claims.

Restricted Stock Units

We estimate the grant-date fair values of our RSUs using the Company’s stock price at grant-date and record such fair values as compensation expense over the vesting period on a straight-line basis. During 2018 and 2017, RSU awards were granted to both our directors and certain members of management. These RSU awards vest 25% at the end of each year for 4 years (in the case of members of management) and vest 100% at the end of one year (in the case of directors). During the years ended December 31, 2018 and December 31, 2017, we recognized compensation expense of $1.0 million and $668,000 respectively. The total unrecognized compensation expense related to these unvested RSUs was $1.4 million as of December 31, 2018.

Below is a table that shows the restricted stock units that have been issued and vested during the years ending December 31, 2018 along with the dollar value of these awards:



	Number of RSUs				$ value of RSUs
	Granted	Vesting	Unvested	Granted		Vesting		Unvested
2016	68,153	51,650	16,503	$	815,160	$	613,208	$	201,952
2017	70,538	40,645	29,893		1,124,348		648,569		475,779
2018	97,600	—	97,600		1,567,171		—		1,567,171
Total	236,291	92,295	143,996	$	3,506,679	$	1,261,777	$	2,244,902

2017 Stock Repurchase Plan

On March 14, 2019, the Board of Directors extended our Company’s stock buy-back program for two years, through March 2, 2021. The Board did not increase the authorized amount, which was initially fixed at $25.0 million. At the present time, $16.2 million of that authorization remains available to repurchase Class A Common Stock.

2014 Stock Repurchase Plan

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 the Company’s common stock. This approved stock repurchase plan supersedes and effectively cancels the program that was approved by the Board of Directors on May 14, 2004, which allowed management to purchase up to 350,000 shares of the Company’s common stock. As of December 31, 2016, we have fully spent the $10.0 million budget at an average price of $11.74.