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 nine months ended September 30, 2015.

Stock options issued



	Directors
Grant date	5/1/2006			4/27/2007			4/25/2008			4/24/2009			5/7/2010			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			Subtotals
Total grant	30,000			30,000			30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			322,500
Vested	30,000			30,000			30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			322,500
Exercised	15,000			2,500			2,500			22,500			12,500			12,500			12,500			10,000			2,500			—			92,500
Forfeited	2,500			7,500			7,500			—			2,500			2,500			—			—			—			—			22,500
Exercisable at September 30, 2015	12,500			20,000			20,000			10,000			17,500			17,500			22,500			25,000			27,500			35,000			207,500
Remaining unexercised	12,500			20,000			20,000			10,000			17,500			17,500			22,500			25,000			27,500			35,000			207,500
Exercise price	$	40.35		$	54.17		$	50.15		$	32.68		$	38.76		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07
Volatility	0.206			0.225			0.237			0.344			0.369			0.358			0.348			0.333			0.173			0.166
Expected life (years)	9.0			8.0			7.0			6.0			5.0			5.0			5.0			5.0			5.0			5.0
Assumed yield	5.93		%	4.39		%	4.09		%	4.54		%	4.23		%	4.16		%	4.61		%	4.53		%	4.48		%	4.54		%
Risk-free rate	5.11		%	4.65		%	3.49		%	2.19		%	2.17		%	1.86		%	0.78		%	0.82		%	1.63		%	1.50		%
Total value at grant date	$	143,400		$	285,300		$	254,700		$	222,950		$	287,950		$	297,375		$	257,250		$	278,250		$	109,500		$	125,300		$	2,261,975
Expensed in previous years	143,400			285,300			254,700			222,950			287,950			297,375			257,250			278,250			109,500			—			2,136,675
Expensed in 2015	—			—			—			—			—			—			—			—			—			125,300			125,300
Future expense	—			—			—			—			—			—			—			—			—			—			—
	Officers
Grant date	4/27/2007			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			Subtotals												Grand Totals
Total grant	135,000			162,500			242,500			202,500			170,000			190,000			1,102,500												1,425,000
Vested	67,500			118,750			81,875			91,250			42,500			—			401,875												724,375
Exercised	14,097			57,504			38,750			21,875			625			—			132,851												225,351
Forfeited	67,500			43,750			135,000			30,000			—			—			276,250												298,750
Exercisable at September 30, 2015	53,403			61,246			43,125			69,375			41,875			—			269,024												476,524
Remaining unexercised	53,403			61,246			68,750			150,625			169,375			190,000			693,399												900,899
Exercise price	$	54.17		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07
Volatility	0.233			0.330			0.315			0.304			0.306			0.298
Expected life (years)	6.5			8.0			8.0			8.0			7.0			7.0
Assumed yield	4.13		%	4.81		%	5.28		%	5.12		%	4.89		%	4.94		%
Risk-free rate	4.61		%	2.75		%	1.49		%	1.49		%	2.17		%	1.89		%
Gross value at grant date	$	1,339,200		$	1,366,625		$	1,518,050		$	1,401,300		$	1,349,800		$	1,584,600		$	8,559,575											$	10,821,550
Estimated forfeitures	62,000			367,937			889,690			280,468			168,749			141,780			1,910,624												1,910,624
Expensed in previous years	1,277,200			909,563			418,899			492,937			196,848			—			3,295,447												5,432,122
Expensed in 2015	—			89,125			117,819			201,825			221,454			150,295			780,518												905,818
Future expense	—			—			91,642			426,070			762,749			1,292,525			2,572,986												2,572,986
Weighted average term of remaining future expense (in years)							2.8

The table below summarizes the option activity for the nine months ended September 30, 2015:



	Number of Shares		Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	748,208		$	44.79	$	9,274,028
Granted	225,000		51.07		153,000
Exercised	(72,309	)	42.71		1,041,624
Expired/Forfeited	—		—
Outstanding September 30	900,899		46.53		4,881,029
Exercisable September 30	476,524		45.33		3,235,179

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 September 30, 2015, the closing share price of $51.75 was lower than the exercise price of the 73,403 outstanding options granted in 2007, and, therefore, those options had no intrinsic value as of September 30, 2015. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 7.2 years and 5.9 years, respectively.