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Share-Based Employee Compensation | 12 Months Ended
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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.

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