(7)	SHAREHOLDERS' EQUITY

Shares Repurchased and Retired

The Company from time to time may purchase its Common Stock on the open market or in privately negotiated transactions. During 2012, the Company, in 41 separate transactions, repurchased a total of 37,787 shares of its Common Stock for total consideration of approximately $622,000 at prices ranging from $15.75 to $19.00 per share. During 2013, the Company did not purchase any shares of its Common Stock. During 2014, the Company, in two separate transactions, repurchased and retired a total of 400 shares of its Common Stock for total consideration of approximately $6,300 at prices ranging from $15.38 to $15.49 per share. As of December 31, 2014, approximately $885,000 of the previously authorized amount was available for purchases.

Stock-Based Compensation Plans

The Company’s shareholders approved the 2005 Equity Incentive Plan (“2005 Plan”) in June 2005. The Company’s shareholders have approved several amendments to the 2005 Plan to increase the number of authorized shares of Common Stock issuable under the 2005 Plan (i) from 300,000 shares to 425,000 shares in June 2007, (ii) from 425,000 shares to 625,000 shares in June 2009, (iii) from 625,000 shares to 775,000 shares in June 2012, and (iv) from 775,000 shares to 1,025,000 shares in June 2014. The 2005 Plan provides for the grant of incentive stock options, restricted stock, restricted stock units and stock grants to eligible employees (including officers and employee-directors) and non-statutory stock options to eligible employees, directors and consultants. The objectives of the 2005 Plan are to attract and retain the best personnel and provide for additional performance incentives by providing eligible employees with the opportunity to acquire equity in the Company. As of December 31, 2014, there were 191,701 shares available for issuance under the 2005 Plan. The exercise price of the stock options issued under the 2005 Plan is equal to the market price at the date of grant, or market price at the date of grant plus 10% for shareholders who own greater than 10% of the Company and receive incentive stock options. These stock options expire seven years, or five years for shareholders who own greater than 10% of the Company, from the date of the grant and vest annually over a service period ranging from three to five years. The 2005 Plan is administered by a committee of two or more independent directors from the Company’s Board of Directors (the “Committee”). The Committee determines the eligible individuals to whom awards under the 2005 Plan may be granted, as well as the time or times at which awards will be granted, the number of shares subject to awards to be granted to any eligible individual, the term of any award, and any other terms and conditions of the awards in addition to those contained in the 2005 Plan. As of December 31, 2014, there were 322,834 vested options and 263,999 unvested options under the 2005 Plan.

The Company uses the Black-Scholes pricing model to estimate the fair value of each option granted with the following weighted average assumptions:

	For years ended December 31,
Valuation Assumptions	2012			2013			2014

Expected life ⁽¹⁾		5.1			5.0			4.5
Risk-free interest rate ⁽²⁾		0.88	%		0.90	%		1.45	%
Expected volatility ⁽³⁾		50	%		50	%		35	%
Expected dividend yield		4.91	%		5.05	%		6.05	%
Expected forfeiture ⁽⁴⁾		1.26	%		17.77	%		18.32	%

⁽¹⁾The expected life, in years, of stock options is estimated based on historical experience.

⁽²⁾The risk-free interest rate is based on U.S. Treasury bills whose term is consistent with the expected life of the stock options.

⁽³⁾The expected volatility is estimated based on historical and current stock price data for the Company.

⁽⁴⁾Forfeitures are estimated based on historical experience.

A summary of stock option activity as of December 31, 2012, 2013 and 2014, and changes during the years then ended, are presented below:

	Number of Options/ Warrants			Weighted-Average Exercise Price		Range of Exercise Prices		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (thousands)
Balance at December 31, 2011		410,689		$	18.41	$	10.20 - $21.85		4	$	219
Granted		132,000		$	17.97	$	16.50 - $18.39
Exercised		(34,422	)	$	14.35	$	10.20 - $17.61
Canceled		(30,500	)	$	17.61	$	17.61 - $17.61

Balance at December 31, 2012		477,767		$	18.63	$	10.75 - $21.85		4.3	$	223
Granted		89,000		$	17.41	$	17.25 - $18.95
Exercised		(53,501	)	$	18.27	$	10.75 - $20.02
Canceled		(30,433	)	$	18.00	$	15.22 - $20.02

Balance at December 31, 2013		482,833		$	18.48	$	10.75 - $21.85		3.9	$	214
Granted		210,000		$	14.75	$	12.55 - $17.80
Exercised		(10,000	)	$	10.75	$	10.75 - $10.75
Canceled		(96,000	)	$	18.30	$	16.50 - $21.85

Balance at December 31, 2014		586,833		$	17.36	$	11.50 - $21.00		4.2	$	197

Exercisable at December 31, 2012		224,437		$	19.21	$	10.75 - $21.85		3.1	$	126

Exercisable at December 31, 2013		276,169		$	18.95	$	10.75 - $21.85		2.9	$	152

Exercisable at December 31, 2014		322,834		$	18.89	$	11.50 - $21.00		2.4	$	23

The weighted average grant date fair value of options granted was $5.16, $4.93 and $2.47 per option during the years ended December 31, 2012, 2013 and 2014, respectively. Net cash proceeds from the exercise of stock options during the years ended December 31, 2012, 2013 and 2014 were $0, $43,000 and $64,500, respectively. The associated income tax effect from stock options exercised during the years ended December 31, 2012, 2013 and 2014 was ($18,000), ($60,000) and $11,000, respectively. As of the date of exercise, the total intrinsic value of options exercised during the years ended December 31, 2012, 2013 and 2014 was $142,000, $165,000 and $67,000, respectively. As of December 31, 2014, there was approximately $411,000 of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a weighted average period of 2.51 years.

The following table summarizes information about the options outstanding at December 31, 2014:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number of Options Outstanding at December 31, 2014		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number of Options Exercisable at December 31, 2014		Weighted Average Exercise Price

$	10.93 — 13.11		77,667		6.4	$	12.46		6,667	$	11.50
	13.12 — 15.29		21,000		0.1		15.22		21,000		15.22
	15.30 — 17.48		176,000		5.9		16.11		33,001		16.53
	17.49 — 19.66		129,000		4.6		18.25		79,000		18.34
	19.67 — 21.85		183,166		1.9		20.24		183,166		20.24

$	10.93 — 21.85		586,833		4.2	$	17.36		322,834	$	18.89