9. Non-Cash Share-Based Employee Compensation

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

NOTE 9 - Non-Cash Share-Based Employee Compensation

The Company has an employee and non-employee director share-based incentive compensation plan. Related to these programs, the Company recorded non-cash share-based employee compensation expense of $14 and $16 for the three and six months ended June 30, 2017, respectively, compared with $14 and $26, respectively, for the same periods last year. The Company considers its non-cash share-based employee compensation expenses as a component of cost of products and selling, general and administrative expenses. 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 six months ended June 30, 2017 was calculated using certain assumptions. Such assumptions are described more comprehensively in Note 11 (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, 2016.

A summary of activity under the Company’s stock option plans during the six months ended June 30, 2017 is presented below:

As of January 1, 2017	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		311,000		3.48		—		1.96		—
Vested		231,000		3.30		—		1.97		—
Nonvested		80,000		4.01		—		1.93		—
Period activity
Issued		178,500		5.10		—		1.36		—
Exercised		125,000		2.88		—		1.62		—
Forfeited		75,000		4.26		—		1.99		—
Expired		—		—		—		—		—
As of June 30, 2017
Outstanding		289,500		4.54		7.32		1.73		39,860
Vested		108,000		3.69		3.61		2.28		39,860
Nonvested		181,500		5.04		9.53		1.40		—

Restricted Stock Units

On June 15, 2017, the Company granted to each non-employee director RSUs with a grant fair value of $20 per award, which will vest on June 15, 2018, subject to continued service through such vesting date.