8. Non-Cash Share-Based Employee Compensation

3 Months Ended

Mar. 31, 2014

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 $12 for the three months ended March 31, 2014, compared with $31 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, 2014, compared with $0 for the same period last year) and selling, general and administrative expenses ($12 for the three months ended March 31, 2014, compared with $31 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, 2014 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, 2013.

A summary of activity under the Company’s stock option plan during the three months ended March 31, 2014 is presented below:

As of January 1, 2014	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		482,611		3.50		-		2.18		-
Vested		410,942		3.64		-		2.41		-
Nonvested		71,669		2.68		-		0.87		-
Period activity
Issued		5,000		3.14		-		0.08		-
Exercised		55,833		2.24		-		1.15		-
Forfeited		-		-		-		-		-
Expired		-		-		-		-		-
As of March 31, 2014
Outstanding		431,778		3.65		4.13		2.29		236,232
Vested		373,443		3.78		3.87		2.55		211,814
Nonvested		58,335		2.86		5.78		0.63		24,418