STOCK OPTIONS

Incentive Options

On April 28, 1994, the stockholders approved the 1994 Incentive Stock Option Plan (“1994 ISO Plan”) for key employees. Each option becomes vested and exercisable for up to 20% of the total optioned shares each year after grant. Under the terms of this plan, the exercise price of the shares subject to each option granted would not be less than the fair market value of the common stock at the date the option is granted. There are 3,000 shares outstanding under this option plan. No further option grants can be made under this plan.

On May 3, 2005, the stockholders of the Company approved the 2005 Incentive Stock Option Plan (“2005 ISO Plan”) and the Company reserved 500,000 shares of common stock for options to be issued under the 2005 ISO Plan . During the years ended December 31, 2013, 2012 and 2011, options to purchase 49,000 shares, 61,000 shares and 35,000 shares, respectively, were granted under this plan. Each option becomes vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.

Following is a summary of activity in the Incentive Stock Option Plans for the periods indicated:



	2013				2012				2011
	Shares		Exercise Price*		Shares		Exercise Price*		Shares		Exercise Price*
Options outstanding at beginning of year	330,730		$	21.82	377,480		$	19.27	360,130		$	18.29
Granted	49,000		42.70		61,000		32.76		35,000		26.45
Exercised	(81,880	)	16.77		(99,650	)	19.26		(15,650	)	12.03
Canceled	(5,500	)	24.24		(8,100	)	17.20		(2,000	)	24.69
Options outstanding at end of year	292,350		26.68		330,730		21.82		377,480		19.27
Options exercisable at end of year	154,950		$	21.57	192,830		$	19.48	243,180		$	19.32
Options available for grant at end of year	66,100				109,600				162,500

*Weighted Averages

Options outstanding and exercisable at December 31, 2013 were as follows:



Qualified Stock Options	Options Outstanding				Options Exercisable
	Shares	Remaining Contractual Life (yrs)*	Exercise Price*		Shares	Exercise Price*
Range of Exercise Price
$11.45 - $17.85	54,550	5.07	$	11.80	38,350	$	11.95
$19.79 - $32.76	188,800	5.77	$	26.83	116,600	$	24.73
$42.70 - $42.70	49,000	9.35	$	42.70	—	$	—
Total	292,350				154,950

*Weighted Averages

The weighted-average grant-date fair values of options granted during 2013, 2012, and 2011 were $20.56, $14.76 and $12.50, respectively. As of December 31, 2013, there was $1,322,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of five years.

Non-Qualified Options

On May 7, 2009, the stockholders of the Company approved the 2009 Equity Incentive Plan and the Company reserved 400,000 shares of common stock for this plan. Options become vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.

Following is a summary of activity in the Non-Qualified Stock Option Plans for the periods indicated:



	2013			2012				2011
	Shares	Exercise Price*		Shares		Exercise Price*		Shares		Exercise Price*
Options outstanding at beginning of year	89,700	$	19.91	112,800		$	18.62	102,400		$	15.62
Granted	25,000	42.70		—		—		30,000		26.45
Exercised	—	—		(23,100	)	13.62		(14,600	)	11.45
Cancelled	—	—		—		—		(5,000	)	25.18
Options outstanding at end of year	114,700	24.87		89,700		19.91		112,800		18.62
Options exercisable at end of year	57,900	$	19.89	38,100		$	21.91	37,400		$	19.57
Options available for grant at end of year	293,526			322,750				32,500

*Weighted Averages

Options outstanding and exercisable as of December 31, 2013 were as follows:



Non-Qualified Stock Options	Options Outstanding				Options Exercisable
	Shares	Remaining Contractual Life(yrs)*	Exercise Price*		Shares	Exercise Price*
Range of Exercise Price
$11.45 - $17.85	37,200	5.36	$	11.45	23,400	$	11.45
$19.79 - $32.76	52,500	5.61	25.90		34,500	25.61
$42.70 - $42.70	25,000	9.35	$	42.70	—	$	—
Total	114,700				57,900

*Weighted Averages

The weighted-average grant-date fair values of options granted during 2013 and 2011 were $20.56 and $12.50, respectively. There were no options granted in 2012. As of December 31, 2013, there was $213,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of five years.

During 2013, 2012 and 2011, 0, 23,100, and 14,600 non-qualified options were exercised, respectively, were exercised, $0, $315,000, and $167,000 of cash receipts were received, respectively, and tax deductions of $0, $284,000, and $178,000 were realized, respectively, for the tax deductions from option exercises.

Restricted Stock Units

Following is a summary of activity in the Restricted Stock Units for the periods indicated:



	2013				2012				2011
	Shares		Exercise Price*		Shares		Exercise Price*		Shares		Exercise Price*
Options outstanding at beginning of year	11,375		$	24.24	19,750		$	22.96	9,000		$	15.86
Granted	4,224		42.70		—		—		13,500		26.08
Exercised	(4,875	)	22.07		(6,125	)	21.13		(2,750	)	15.06
Cancelled	—		—		(2,250	)	21.45		—		—
Options outstanding at end of year	10,724		32.49		11,375		24.24		19,750		22.96

Restricted stock units vest 25% after one year following the award date and for an additional 25% of total awarded shares each succeeding year until fully vested. The weighted-average remaining contractual life in years for 2013, 2012, and 2011 were 2.09, 2.65 and 3.48, respectively. As of December 31, 2013, there was $90,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of four years.