(8)	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 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. During 2015, the Company did not purchase any shares of its Common Stock. During 2016, the Company, in five separate transactions, repurchased and retired a total of 845 shares of its Common Stock for total consideration of approximately $8,900 at prices ranging from $10.00 to $10.01 per share. As of December 31, 2016, approximately $876,000 of the previously authorized amount was available for purchases. In March 2016, the Company entered into its Credit Facility. Through the remainder of 2016, Common Stock repurchases were prohibited under the Credit Facility, and Common Stock repurchases are not currently permitted under the Credit Facility.

Stock-Based Compensation Plans

The Company’s 2005 Equity Incentive Plan, as amended (“2005 Plan”), terminated in March 2015. The 2005 Plan provided 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. As of December 31, 2016, there were 338,415 vested options and 56,251 unvested options granted under the 2005 Plan that remained outstanding in accordance with their terms and there were no shares available for issuance under the 2005 Plan due to its termination.

The Company’s shareholders approved the 2015 Equity Incentive Plan (“2015 Plan”) in June 2015. The 2015 Plan replaces the 2005 Plan. The maximum number of shares of Common Stock that may be delivered to participants and their beneficiaries under the 2015 Plan is 200,000. The 2015 Plan provides for the grant of incentive stock options, stock appreciation right awards, restricted stock awards, stock unit awards and other stock-based awards to eligible recipients. The objectives of the 2015 Plan are to attract and retain the best possible candidates for positions of responsibility and provide for additional performance incentives by providing eligible employees with the opportunity to acquire equity in the Company. The 2015 Plan is administered by a committee of two or more outside directors from the Company’s Board of Directors (the “Committee”). The Committee determines the eligible individuals to whom awards under the 2015 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 the award, vesting terms and conditions and any other terms and conditions of the grant in addition to those contained in the 2015 Plan. Each grant under the 2015 Plan will be confirmed by and subject to the terms of an award agreement. As of December 31, 2016, there were 71,000 unvested options granted under the 2015 Plan and 129,000 shares available for issuance under the 2015 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	2014			2015			2016

Expected life ⁽¹⁾		4.5			3.3			3.3
Risk-free interest rate ⁽²⁾		1.45	%		1.00	%		1.21	%
Expected volatility ⁽³⁾		35	%		35	%		39	%
Expected dividend yield		6.05	%		6.93	%		7.81	%
Expected forfeiture ⁽⁴⁾		18.32	%		27.00	%		27.00	%

⁽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, 2014, 2015 and 2016, and changes during the years then ended, is 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, 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
Granted		11,000		$	12.69	$	12.64 - $12.74
Exercised		(6,667	)	$	11.50	$	11.50 - $11.50
Canceled		(135,500	)	$	18.83	$	12.55 - $21.00

Balance at December 31, 2015		455,666		$	16.82	$	12.55 - $19.75		4.2	$	-
Granted		95,000		$	10.11	$	10.04 - $11.11
Canceled		(85,000	)	$	14.18	$	10.04 - $19.75

Balance at December 31, 2016		465,666		$	15.94	$	10.04 - $19.75		3.6	$	654

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

Exercisable at December 31, 2015		307,672		$	17.79	$	12.55 - $19.75		3.4	$	-

Exercisable at December 31, 2016		338,415		$	17.34	$	12.55 - $19.75		2.9	$	157

The weighted average grant date fair value of options granted was $2.47, $1.81 and $1.74 per option during the years ended December 31, 2014, 2015 and 2016, respectively. Net cash proceeds from the exercise of stock options during the years ended December 31, 2014 and 2015 were $64,500 and $8,000, respectively. The associated income tax effect from stock options exercised during the years ended December 31, 2014 and 2015 was $11,000 and ($5,000), respectively. As of the date of exercise, the total intrinsic value of options exercised during the years ended December 31, 2014 and 2015 was $67,000 and $11,000, respectively. As of December 31, 2016, there was approximately $135,000 of total unrecognized compensation expense related to non-vested stock options, which is expected to be recognized over a weighted average period of 1.95 years.

The following table summarizes information about the options outstanding at December 31, 2016:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number of Options Outstanding at December 31, 2016		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number of Options Exercisable at December 31, 2016		Weighted Average Exercise Price

$	8.74 — 10.93		67,000		6.0	$	10.04		-	$	-
	10.93 — 13.11		60,000		5.0	$	12.45		37,333	$	12.55
	15.30 — 17.48		141,000		4.0		16.16		108,999		16.28
	17.49 — 19.66		121,000		2.6		18.26		115,417		18.29
	19.67 — 21.85		76,666		1.3		19.75		76,666		19.75

$	10.93 — 21.85		465,666		3.6	$	15.94		338,415	$	17.34