Stock Option Plans

The Company has established two stock incentive plans, the 1993 plan and the 2004 plan, as amended, (together, the “Plans”). Under the Plans, options were granted at an exercise price not less than the market value of the common stock on the date of grant and expire ten years from the date of grant. Officer options vest ratably over four years following the grant and are charged to expense using the straight-line method over the vesting period. Director options vest immediately and are charged to expense as of the date of grant.

The following table summarizes the amount and activity of each grant with outstanding unexercised options, the total value and variables used in the computation and the amount expensed and included in general and administrative expense in the Consolidated Statements of Operations for the three months ended March 31, 2014.

Stock options issued



	Directors
Grant date	4/26/2004			5/6/2005			5/1/2006			4/27/2007			4/25/2008			4/24/2009			5/7/2010			5/13/2011			5/4/2012			5/10/2013			Subtotals
Total grant	30,000			30,000			30,000			30,000			30,000			32,500			32,500			32,500			35,000			35,000			317,500
Vested	30,000			30,000			30,000			30,000			30,000			32,500			32,500			32,500			35,000			35,000			317,500
Exercised	30,000			22,500			5,000			—			—			17,500			5,000			5,000			5,000			2,500			92,500
Forfeited	—			—			2,500			7,500			7,500			—			2,500			2,500			—			—			22,500
Exercisable at March 31, 2014	—			7,500			22,500			22,500			22,500			15,000			25,000			25,000			30,000			32,500			202,500
Remaining unexercised	—			7,500			22,500			22,500			22,500			15,000			25,000			25,000			30,000			32,500			202,500
Exercise price	$	25.78		$	33.22		$	40.35		$	54.17		$	50.15		$	32.68		$	38.76		$	41.82		$	39.29		$	44.42
Volatility	0.183			0.198			0.206			0.225			0.237			0.344			0.369			0.358			0.348			0.333
Expected life (years)	5.0			10.0			9.0			8.0			7.0			6.0			5.0			5.0			5.0			5.0
Assumed yield	5.75		%	6.91		%	5.93		%	4.39		%	4.09		%	4.54		%	4.23		%	4.16		%	4.61		%	4.53		%
Risk-free rate	3.57		%	4.28		%	5.11		%	4.65		%	3.49		%	2.19		%	2.17		%	1.86		%	0.78		%	0.82		%
Total value at grant date	$	66,600		$	71,100		$	143,400		$	285,300		$	254,700		$	222,950		$	287,950		$	297,375		$	244,388		$	262,946		$	2,136,709
Expensed in previous years	66,600			71,100			143,400			285,300			254,700			222,950			287,950			297,375			244,388			262,946			2,136,709
Expensed in 2014	—			—			—			—			—			—			—			—			—			—			—
Future expense	—			—			—			—			—			—			—			—			—			—			—
	Officers
Grant date	4/26/2004			5/6/2005			4/27/2007			5/13/2011			5/4/2012			5/10/2013						Subtotals									Grand Totals
Total grant	122,500			132,500			135,000			162,500			242,500			202,500						997,500									1,315,000
Vested	115,000			118,750			67,500			67,500			28,125			—						396,875									714,375
Exercised	115,000			84,850			—			16,250			1,875			—						217,975									310,475
Forfeited	7,500			13,750			67,500			41,250			130,000			—						260,000									282,500
Exercisable at March 31, 2014	—			33,900			67,500			51,250			26,250			—						178,900									381,400
Remaining unexercised	—			33,900			67,500			105,000			110,625			202,500						519,525									722,025
Exercise price	$	25.78		$	33.22		$	54.17		$	41.82		$	39.29		$	44.42
Volatility	0.183			0.207			0.233			0.330			0.315			0.304
Expected life (years)	7.0			8.0			6.5			8.0			8.0			8.0
Assumed yield	5.75		%	6.37		%	4.13		%	4.81		%	5.28		%	5.12		%
Risk-free rate	4.05		%	4.15		%	4.61		%	2.75		%	1.49		%	1.49		%
Total value at grant date	$	292,775		$	413,400		$	1,258,848		$	1,277,794		$	1,442,148		$	1,254,164					$	5,939,129								$	8,075,838
Forfeited options	17,925			35,100			—			252,300			813,800			—						1,119,125									1,119,125
Expensed in previous years	274,850			378,300			1,258,848			692,088			261,807			209,027						3,074,920									5,211,629
Expensed in 2014	—			—			—			58,838			39,271			78,384						176,493									176,493
Future expense	—			—			—			274,568			327,270			966,753						1,568,591									1,568,591
Weighted average term of remaining future expense (in years)													2.5

The table below summarizes the option activity for the three months ended March 31, 2014:



	Number of Shares		Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	753,625		$	42.55	$	4,529,206
Granted	—		—		$	—
Exercised	(31,600	)	29.39		$	555,959
Expired/Forfeited	—		—		—
Outstanding March 31	722,025		43.14		$	3,724,265
Exercisable March 31	381,400		43.49		$	2,150,234

The intrinsic value measures the price difference between the options’ exercise price and the closing share price quoted by the New York Stock Exchange as of the date of measurement. The intrinsic value for shares exercised during the period was calculated by using the closing share price on the date of exercise. At March 31, 2014, the closing share price of $47.36 was lower than the exercise price of the 90,000 and 22,500 outstanding options granted in 2007 and 2008, respectively, and, therefore, those options had no intrinsic value as of March 31, 2014. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 6.8 years and 5.2 years, respectively.