8. Non-Cash Share-Based Employee Compensation

9 Months Ended

Sep. 30, 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 $3 and $36, respectively, for the three and nine months ended September 30, 2013, compared with $5 and $23 for the same periods last year.  The Company considers its non-cash share-based employee compensation expenses as a component of selling, general and administrative expenses ($3 and $36 for the three and nine months ended September 30, 2013, respectively, compared with $5 and $23 for the same periods 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 and nine months ended September 30, 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 September 30, 2013, and changes during the nine months ended September 30, 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		90,000		2.59		-		0.98		-
Exercised		55,000		1.90		-		1.15		-
Forfeited		-		-		-		-		-
Expired		5,000		4.50		-		2.68		-
As of September 30, 2013
Outstanding		490,944		3.47		4.47		2.17		159,250
Vested		419,275		3.61		4.01		2.39		141,816
Nonvested		71,669		2.68		7.15		0.87		17,434