Stock options

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

5. Stock options

Under a stock option plan adopted in 1995, the Company had the discretion to grant options for up to 1,600,000 shares of common stock until May 15, 2005, at which time the plan terminated except to the extent necessary to govern outstanding options.   Stock options granted under the plan vest on grant date and expire ten years from the date of grant plus 30 days. The exercise price of the options is the fair value on the date of grant.

At the Company's 2006 Annual Meeting of Stockholders, the stockholders approved the 2006 Stock Incentive Plan (the "Plan").  The Plan permits the issuance of stock options, restricted stock awards, and performance shares to employees, officers, directors, and consultants of the Company.  Initially, and until such time as the Board creates a Compensation Committee, the Board of Directors will administer the Plan.  The total number of shares of common stock that may be issued pursuant to awards under the Plan is 5,000,000.  Under the Plan, no participant may receive awards of stock options that cover in the aggregate more than 500,000 shares of common stock in any fiscal year.  Unless terminated by the Board, or upon the granting of awards covering all of the shares subject to the Plan, the Plan shall terminate on June 5, 2016.

The Company expenses the cost of options granted over the vesting period of the option based on the grant-date fair value of the award.  For the year ended December 31, 2015 and 2014, the Company recognized no expense related to options granted under the Plan.

Fair values were estimated at the date of grants of the options for options issued in prior years, using the Black-Scholes option valuation model.  The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable.  For purposes of determining the expected life of the options, the Company utilizes the Simplified Method as defined in Staff Accounting Bulletin No. 107 issued by the Securities and Exchange Commission.

In addition options valuation models require the input of highly subjective assumptions including stock price volatility.

As of December 31, 2015, there were no unrecognized compensation expenses related to non-vested share-based compensation arrangements under the Plan.

A summary of the Company's Incentive Plan as of December 31, 2015 and changes during the year is presented below:

				Weighted Average
	Options			Exercise Price
Outstanding at Beginning of Year 2014		60,417		$	1.82
Granted		0
Cancelled or Exercised		(54,167	)	$	1.73
Outstanding at End of Year 2014		6,250		$	2.56
Granted		0		$	0
Cancelled or Exercised		0		$	0
Outstanding at End of Year 2015		6,250		$	2.56

The following table summarizes information about stock options outstanding at December 31, 2015:

	Options Outstanding		Options Exercisable
		Weighted
		Average	Weighted		Weighted
Range of	Number	Remaining	Average	Number	Average
Exercise	Outstanding	Contractual	Exercise	Exercisable	Exercise
Prices	at 12/31/15	Life	Price	at 12/31/15	Price
$1.44 - $3.12	6,250	3.45 years	$2.56	6,250	$2.56