NOTE 7 - STOCKHOLDERS’ EQUITY

Employee Stock Incentive Plans

The Company has a 2000 Employee Stock Option Plan which initially provided for options to purchase up to 1,000 shares of the Company’s common stock to key employees, officers and directors. The Board of Directors determines the amount and terms of the options, which cannot exceed ten years. At January 1, 2016, options for 96 shares were outstanding under this plan. There are no shares available for future grant.

The 2007 Stock and Incentive Compensation Plan provided for stock awards up to 500 shares of the Company’s common stock to employees, non-employee directors or independent contractors, with a maximum number of full value restricted share awards up to 200. As of January 1, 2016, options for 237 shares were outstanding under this plan, while 162 restricted shares had been awarded. There are no shares available for future grant.

The 2013 Stock and Incentive Compensation Plan provides for stock awards up to 700 shares of the Company’s common stock to employees, non-employee directors or independent contractors. As of January 1, 2016, options for 134 shares had been granted and were outstanding under this plan, while 192 restricted shares had been awarded. There are 374 shares available for future grant.

Historically, the Company has issued restricted share and/or option awards to employees and non-employee directors. The Board of Directors determines the amount and terms of the options, which cannot exceed ten years. Under both the 2013 and 2007 Stock and Incentive Compensation Plans, restricted share awards cliff vest on the third anniversary, while option share awards vest annually in 25% increments over four years.

Changes in award shares outstanding are summarized as follows:


	Restricted shares			Options
							Aggregate
		Wtd. Avg.			Wtd. Avg.		Intrinsic
	Shares	Grant Price		Shares	Ex. Price		Value
December 31, 2012	50	$	31.35	341	$	25.62	$	4,300
Granted	58		20.29	68		20.71		1,191
Vested or Exercised	(8)		19.57	(2)		12.29		(52)
Forfeited	—		—	(24)		(30.29)		(1,644)
December 31, 2013	100	$	24.12	383	$	24.52		5,251
Granted	61		23.27	70		24.28		977
Vested or Exercised	(39)		27.35	(13)		2.87		(460)
Forfeited	—		—	(13)		(24.57)		(816)
December 31, 2014	122	$	22.68	427	$	24.89	$	5,696
Granted	100		39.97	56		37.30		52
Vested or Exercised	(45)		22.87	(12)		23.97		(171)
Forfeited	—		—	(4)		(26.35)		(258)
January 1, 2016	177	$	32.39	467	$	26.39		5,529

Aggregate intrinsic value represents the estimated value of the Company’s common stock at the end of the period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable.

The following table summarizes information about stock options at January 1, 2016:


	Options Outstanding				Options Exercisable
		Wtd. Avg.				Wtd. Avg.
Range of		Remaining	Wtd. Avg.			Remaining	Wtd. Avg.
Exercise		Contractual	Exercise			Contractual	Exercise
Price	Shares	Life	Price		Shares	Life	Price
$0.00-20.00	107	1.61	$	19.41	100	1.39	$	19.41
$20.01-30.00	213	6.52	$	22.92	122	5.47	$	22.81
Over $30.00	147	5.81	$	36.46	90	3.81	$	35.95
	467	5.17	$	26.39	312	3.69	$	25.49

The following table details exercisable options and related information for year end:


	January 1, 2016		December 31, 2014		December 31, 2013
Exercisable at end of year		312		273		259
Weighted average price	$	25.49	$	25.59	$	24.89

Weighted average fair value of options granted during the year	$	12.35	$	11.61	$	9.59

The following table details unvested option activity for the year ended January 1, 2016:


		Wtd. Avg.
	Shares	Ex. Price
December 31, 2014	154	$	23.65
Vested	55		24.73
Granted	56		37.30
Forfeited	—		(24.08)
January 1, 2016	155	$	28.20

The fair value of each option award is estimated on the date of grant using the Monte Carlo option valuation model with suboptimal exercise behavior. The Monte Carlo model places greater emphasis on market evidence and predicts more realistic results because it considers open form information including volatility, employee exercise behaviors and turnover. Stock options have a contractual term of 10 years. The following assumptions were used in determining the fair value of option awards for 2015, 2014 and 2013:


	Equivalent		Equivalent		Implied
Grant date	interest rate		volatility		expected lives
March 2, 2015	2.07	%	32.50	%	6.86
March 17, 2014	2.68	%	40.00	%	8.32
March 1, 2013	1.86	%	40.00	%	8.33

Expected volatility is based on an analysis that looks at the unbiased standard deviation of the Company’s common stock over the option term as well as implied volatilities of all long-term exchange traded options for the Company. The expected life of the options represents the period of time that the Company expects the options granted to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option for the expected term of the instrument. A 0% dividend yield was assumed as no dividend payout over the term of the award is expected.

As of January 1, 2016, there was $3,589 of total unrecognized compensation cost, after estimated forfeitures, related to unvested share-based compensation granted under the plans. That cost is expected to be recognized over a weighted-average period of 2.37 years. The total fair value of option shares vested during the years ended January 1, 2016 and December 31, 2014 was $487 and $446, respectively.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (“2009 ESPP”) which, if implemented, could provide employees of the Company and its subsidiaries with an opportunity to participate in the growth of the Company and to further align the interest of the employees with the interests of the Company through the purchase of shares of the Company’s Common Stock. Under the 2009 ESPP, 300 shares of the Company’s Common Stock have been authorized for issuance. As of January 1, 2016, all 300 shares remain available for issuance.