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Share-Based Employee Compensation
 12 Months Ended
Dec. 31, 2021
Share-Based Employee Compensation  
10. Share-based Employee Compensation

10. Share-Based Employee Compensation

 

The Company has an employee and non-employee director incentive compensation equity plan. Related to these programs, the Company recorded $253 and $129 of share-based employee compensation expense during the years ended December 31, 2021 and 2020, respectively, which is included as a component of cost of products and SG&A expenses in the accompanying consolidated statements of operations. No amount of share-based employee compensation expense was capitalized as part of capital expenditures or inventory for the years presented.

 

The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of a stock option grant. The share-based employee compensation expense recorded in the years ended December 31, 2021 and 2020 was calculated using the assumptions noted in the following table. Expected volatilities are based on the historical volatility of the Company’s common stock over the period of time, commensurate with the expected life of the stock options. The dividend yield assumption is based on the Company’s expectations of dividend payouts at the grant date. In 2021, the Company paid dividends on January 19, for a dividend declared in 2020, April 26, August 9 and October 18. In December 2021, the Company’s Board of Directors also declared a quarterly dividend that was paid on January 24, 2022. The Company has estimated its future stock option exercises. The expected term of option grants is based upon the observed and expected time to the date of post vesting exercises and forfeitures of options by the Company’s employees. The risk-free interest rate is derived from the average U.S. Treasury rate for the period, which approximates the rate at the time of the stock option grant.

 

 

FY 2021

 

 

FY 2020

 

Expected Volatility

 

 

52.3

%

 

 

52.1

%

Expected Dividends

 

 

3.0

%

 

 

2.0

%

Expected Term (in years)

 

 

6.5

 

 

 

6.5

 

Risk-Free Rate

 

 

0.80

%

 

 

0.49

%

Estimated Forfeitures

 

 

0.0

%

 

 

0.0

%

 

A summary of stock option activity under the Company’s equity compensation plans as of December 31, 2021, and changes during the year ended December 31, 2021, are presented below:

 

As of January 1, 2021 

 

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

 

 

489,000

 

 

 

3.96

 

 

 

7.23

 

 

 

1.51

 

 

 

24,000

 

Vested

 

 

185,800

 

 

 

4.15

 

 

 

5.65

 

 

 

1.55

 

 

 

24,000

 

Nonvested

 

 

303,200

 

 

 

3.84

 

 

 

8.20

 

 

 

1.49

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued

 

 

202,500

 

 

 

3.08

 

 

 

—

 

 

 

1.16

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Forfeited

 

 

5,000

 

 

 

5.10

 

 

 

—

 

 

 

1.37

 

 

 

—

 

Expired

 

 

10,000

 

 

 

4.55

 

 

 

—

 

 

 

1.06

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding

 

 

676,500

 

 

 

3.68

 

 

 

7.33

 

 

 

1.41

 

 

 

4,500

 

Vested

 

 

361,600

 

 

 

3.80

 

 

 

6.66

 

 

 

1.44

 

 

 

4,500

 

Nonvested

 

 

314,900

 

 

 

3.53

 

 

 

8.10

 

 

 

1.39

 

 

 

—

 

Outstanding:

 

 

 

 

 

 

 

Range of Exercise Prices

($) Per Share

 

 

Stock Options

Outstanding

 

 

Wgt. Avg.

Exercise

Price ($)

Per Share

 

 

Wgt. Avg.

Remaining

Contractual

Life (Years)

 

 

2.23

 

 

 

3.83

 

 

 

447,500

 

 

 

3.23

 

 

 

8.06

 

 

4.07

 

 

 

5.10

 

 

 

229,000

 

 

 

4.55

 

 

 

5.91

 

 

 

 

 

 

 

 

 

 

676,500

 

 

 

3.68

 

 

 

7.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Range of Exercise Prices

($) Per Share

 

 

 

 

 

Stock Options

Exercisable

 

 

 

Wgt. Avg.

Exercise

Price ($)

Per Share  

 

 

 

2.23

 

 

 

3.83

 

 

 

211,000

 

 

 

3.20

 

 

 

 

 

 

4.07

 

 

 

5.10

 

 

 

150,600

 

 

 

4.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

361,600

 

 

 

3.80

 

 

 

 

 

 

The weighted-average grant-date fair value per option granted during the years ended December 31, 2021 and 2020 was $1.16 and $1.27, respectively. There were no stock options exercised during the years ended December 31, 2021 and 2020.

 

In connection with the restricted stock units granted to non-employee directors, the Company accrues compensation expense based on the estimated number of shares expected to be issued, utilizing the most current information available to the Company at the date of the consolidated financial statements. The Company estimates the fair value of the restricted stock unit awards based upon the market price of the underlying common stock on the date of grant. As of December 31, 2021 and 2020, there was approximately $802 and $872, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements, including stock options and restricted stock units. This compensation cost is expected to be recognized approximately over four years.