8. Non-Cash Share-Based Employee Compensation

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

NOTE 8 - Non-Cash Share-Based Employee Compensation

The Company has employee and non-employee director stock option programs. Related to these programs, and in accordance with ASC Topic 718, “Compensation-Stock Compensation”, the Company recorded non-cash share-based employee compensation expense of $31 for the three months ended March 31, 2013, compared with $15 for the same period last year. The Company considers its non-cash share-based employee compensation expenses as a component of cost of products ($0 for the three months ended March 31, 2013, compared with $0 for the same period last year) and selling, general and administrative expenses ($31 for the three months ended March 31, 2013, compared with $15 for the same period last year). There was no non-cash share-based employee compensation expense capitalized as part of capital expenditures or inventory for the periods presented.

The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of a stock option grant. The non-cash share-based employee compensation expense recorded in the three months ended March 31, 2013 was calculated using certain assumptions. For a description of such assumptions, reference is made to Note 10 (Share-Based Employee Compensation) of the Company’s Consolidated Financial Statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

A summary of stock option activity under the Company’s stock option plans as of March 31, 2013, and changes during the three months ended March 31, 2013 are presented below:

As of January 1, 2013	Stock Options		Wgt. Avg. Exercise Price ($) Per Share		Wgt. Avg. Remaining Contractual Life (Years)		Wgt. Avg. Grant Date Fair Value($) Per Share		Aggregate Intrinsic Value ($)
Outstanding		460,944		3.47		-		2.29		-
Vested		435,944		3.55		-		2.38		-
Nonvested		25,000		2.03		-		0.68		-
Period activity
Issued		55,000		2.23		-		1.40		-
Exercised		-		-		-		-		-
Forfeited		-		-		-		-		-
Expired		-		-		-		-		-
As of March 31, 2013
Outstanding		515,944		3.34		4.50		2.19		92,305
Vested		454,275		3.50		4.08		2.34		84,838
Nonvested		61,669		2.15		7.60		1.11		7,467