Note 15. Stock-Based Compensation

The Company has a 2006 Stock Plan (the “Plan”) which has been approved by the Company’s shareholders. The Plan authorizes the grant of stock options, stock appreciation rights, restricted stock and stock bonuses for up to 62,500 shares of common stock. At the annual shareholders meeting on May 22, 2012, the shareholders of the Company approved an amendment which (a) removed the restrictions in the Plan that prohibit more than 20% of the awards being given to any one participant or to the independent directors as a group, or prohibiting more than 20% of the awards being made in restricted stock or bonus shares, and (b) increased the number of shares available under the Plan from 37,500 shares to 62,500 shares.

Options

As of December 31, 2014, 5,982 stock options have been awarded under the Plan. The exercise price is equal to the average of the high and low sales price of the stock as reported on the National Association of Securities Dealers Automated Quotation system (NASDAQ) on the grant date. A total of 5,982 shares of common stock have been reserved for issuance pursuant to the Plan with respect to the granted options.

On July 15, 2013, the Company granted share awards and stock options to an executive officer of the Company outside of the 2006 Stock Plan as an inducement material to the executive’s acceptance of employment. The share awards total 3,125 authorized but previously unissued shares of the Company’s common stock with a grant date price of $7.28. The shares vest based on continued employment of the executive, and the restrictions lapse in 33.3% increments on each of the first, second and third anniversaries of issuance. There were 2,084 unvested awards as of December 31, 2014. The stock options entitle the executive to purchase 3,125 authorized but previously unissued shares of the Company’s common stock at an exercise price of $8.08 per share. The stock options have a four-year term and vest in equal one-third increments on each of the first, second and third anniversaries of issuance provided that the executive is employed by the Company on each such vesting date. The stock options and share awards will become fully vested in the event of a change of control of the company or upon the executive’s death or disability.

As of December 31, 2014, the total unrecognized compensation cost related to non-vested stock options awards was $3, which is expected to be recognized over the next 19 months.

During 2014 and 2013 the Company’s options granted were 0 and 3,125, respectively, with a weighted average grant date fair value per option of $1.61. The total intrinsic value of options exercised was $0 for all three fiscal years 2014, 2013 and 2012. The closing market price of our common stock on the last day of 2014 was $2.31 per share. There is no intrinsic value for the vested options as of December 31, 2014 and 2013.

The Company records compensation expense for stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The Company uses historical data among other factors to estimate the expected price volatility, the expected option life, the dividend rate and expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield in effect at the time of grant for the estimated life of the option. The following table summarizes the estimates used in the Black-Scholes option-pricing model related to the 2013 and 2012 grants:



	Grant Date
	07/15/13		12/04/12
Volatility	48.60	%	54.00	%
Expected dividend yield	6.00	%	0.80	%
Expected term (in years)	4.00		4.00
Risk free interest rate	1.02	%	0.49	%

The following table summarizes the Company’s activities with respect to its stock options for the year ended December 31, 2014 as follows:



						Weighted-
		Weighted-		Aggregate		Average	Aggregate
		Average		Fair		Remaining	Intrinsic
	Shares	Exercise Price		Value		Contractual Term	Value
Outstanding at December 31, 2013	20,063	$	9.86	$	54
Granted	0		0.00		0
Exercised	0		0.00		0
Forfeited or expired	11,313		11.36		32
Outstanding at December 31, 2014	8,750	$	7.93	$	22	2.15	$	0.00
Exercisable at December 31, 2014	6,666	$	7.88	$	19	2.02	$	0.00

Non Vested Share Awards

During 2014 and 2013, the Company granted 0 and 2,813 non-vested shares of common stock under the 2006 Stock Plan. As of December 31, 2014 and 2013, the Company had 2,084 and 5,938, respectively, non-vested shares of common stock outstanding under the Plan. The shares vest over one to three years following the date of grant. The fair value of the awards is calculated as the fair market value of the shares on the date of grant. The Company recognized $16 and $23 of non-cash compensation for the years ended December 31, 2014 and 2013, respectively, related to this non-vested stock.

As of December 31, 2014 the total unrecognized compensation cost related to non-vested stock awards was $12 and is expected to be recognized over the next 19 months.

Investment Committee Share Compensation

In March 2012 the Board of Directors approved the recommendation by the Compensation Committee that the independent directors serving as members of the Investment Committee receive their monthly Investment Committee fees in the form of shares of the Company’s Common Stock issued under the 2006 Stock Plan, priced as the average of the closing price of the stock for the first 20 trading days for the calendar year. The shares issued to the independent directors of the Investment Committee for the twelve months ended December 31, 2014 and 2013 were 9,711 and 2,241, respectively.

Share-Based Compensation Expense

The expense recognized in the consolidated financial statements for the share-based compensation related to employees and directors for the years ended December 31, 2014, 2013 and 2012 was $34, $47 and $44, respectively. At December 31, 2014, we had unrecognized compensation expense, net of estimated forfeitures, related to non-vested stock awards in the amount of $15. This expense is expected to be recognized over the next 19 months. The total unrecognized compensation cost related to non-vested stock options awards was $3, which is expected to be recognized over the next 19 months. We recognize compensation expense using the straight-line method over the vesting period.