. STOCKHOLDERS' EQUITY

a)	Equity Compensation Plans

We had a stock option plan that terminated in

March 2017,

which permitted stock option grants to non-employee directors with an exercise price equal to the fair market value of the shares at the date of grant. Options outstanding and exercisable were granted at a stock option price which was

not

less than the fair market value of our common stock on the date the option was granted, and

option has a term in excess of

ten

years.

A summary of stock option transactions for the years ended

December 31

is as follows (

amounts shown for

2018,

as the plan was terminated in

March 2017):

	201 7					201 6
				Weighted					Weighted
				Average					Average
	Option			Exercise		Option			Exercise
	Shares			Price		Shares			Price
Outstanding at January 1		56,400		$	5.14		68,400		$	5.17
Granted		-			-		-			-
Forfeited or cancelled		(12,000	)		5.14		(12,000	)		5.30
Exercised		(44,400	)		5.14		-			-
Outstanding at December 31		-		$	-		56,400		$	5.14
Exercisable at end of year		-		$	-		56,400		$	5.14
Weighted-average fair value of options granted during year		n/a					n/a

Because there were

grants of stock options in

2018,

2017

2016,

there were

amounts of compensation cost recorded. The intrinsic value of stock options exercised in

2017

was

$155,606.

Cash received from the exercise of stock options for

2017

was

$223,404.

We have a restricted stock plan that was adopted by our Board of Directors in

January 2013

and approved by our stockholders in

June 2013.

The plan reserves up to

300,000

shares of our common stock for restricted stock awards to our executive officers, non-employee directors and other key employees (of which, there were

178,225

shares available for future awards at

December 31, 2018).

Awards granted under the plan

may

be stock awards or performance awards, and

may

be subject to a graded vesting schedule with a minimum vesting period of

four

years, unless otherwise determined by the committee that administers the plan.

In addition, in

October 2018

we granted (outside of the restricted stock plan) to Janet Carr, our Chief Executive Officer, a total of

644,000

restricted stock units, of which

460,000

vest over a period of

five

years from the grant date based on Ms. Carr’s continued employment in her role as CEO,

92,000

will vest if/when the Company’s operating income exceeds

$12

million dollars

two

fiscal years in a row, and

92,000

will vest if/when the Company’s operating income exceeds

$14

million dollars in

one

fiscal year.

A summary of the activity for non-vested restricted common stock awards is as follows:

	Shares			Grant Fair Value
Balance, January 1, 2017		65,150		$	8.03
Granted		9,005			8.05
Forfeited		(4,054	)		8.97
Vested		(33,300	)		8.97
Balance, December 31, 2017		36,801		$	8.03

Balance, January 1, 2018		36,801		$	8.03
Granted		654,000			7.39
Vested		(33,084	)		7.94
Balance, December 31, 2018		657,717		$	7.39

Restricted stock awards are valued at the fair market value of our common stock at the grant date of award. For service awards, we recognize compensation cost over the service period, assuming

forfeitures. For these service awards, our share based compensation expense was

$327,629,

$239,599,

and

$199,870

2018,

2017

and

2016,

respectively, and was included as a component of operating expenses. As of

December 31, 2018,

there was unrecognized compensation cost related to non-vested, service-based restricted stock awards of

$3,315,366

which will be recognized in each of the following years:

2019	$	714,754
2020		711,733
2021		699,088
2022		679,880
2023		509,911

For the performance based awards that were granted to Ms. Carr,

compensation expense has been recorded in

2018.

b)	Cash Dividend

Our Board will determine future cash dividends after giving consideration to existing levels of profit and cash flow, capital requirements, current and forecasted liquidity, as well as financial and other business conditions existing at the time.

c)	Share Repurchase Program

August 2015,

our Board authorized a share repurchase program pursuant to which we are authorized to repurchase up to

1.2

million shares of our common stock at prevailing market rates through

August 2016.

Subsequently, the program was amended to increase the number of shares available for repurchase from

1.2

million to

2.2

million and to extend the program through

August 2019.

For the year ended

December 31,

we repurchased the following shares:

Year ended December 31	Total shares repurchased		Average price per share
2018		243,387		$6.79
2017		-		-
2016		520,482		$7.06

December 31, 2018,

there are

907,406

shares that remain available for repurchase under the plan.