Note 4 - Stockholders' Equity | 9 Months Ended |
Sep. 30, 2013 |
Disclosure Text Block Supplement [Abstract] | ' |
Shareholders' Equity and Share-based Payments [Text Block] | ' |
4. STOCKHOLDERS’ EQUITY |
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Stock-based compensation is estimated at the grant date based on the award’s fair value and is recognized on a straight-line basis over the vesting periods, generally four years. Stock-based compensation expenses before taxes related to the Company’s stock plans and employee stock purchase plan were allocated as follows (in thousands): |
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| | Three Months | | | Nine Months | |
Ended September 30, | Ended September 30, |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Cost of design-to-silicon yield-solutions | | $ | 812 | | | $ | 513 | | | $ | 1,995 | | | $ | 1,264 | |
Research and development | | | 484 | | | | 288 | | | | 1,143 | | | | 726 | |
Selling, general and administrative | | | 628 | | | | 452 | | | | 1,804 | | | | 1,486 | |
Stock-based compensation expenses | | $ | 1,924 | | | $ | 1,253 | | | $ | 4,942 | | | $ | 3,476 | |
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The Company estimated the fair value of share-based awards granted during the period using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions, resulting in the following weighted average fair values: |
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Stock Plans: |
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| | Three Months | | | Nine Months | |
Ended September 30, | Ended September 30, |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Expected life (in years) | | | 4.78 | | | | 4.58 | | | | 4.78 | | | | 4.82 | |
Volatility | | | 50.3 | % | | | 57.42 | % | | | 55.83 | % | | | 59.41 | % |
Risk-free interest rate | | | 1.31 | % | | | 0.66 | % | | | 0.94 | % | | | 0.77 | % |
Expected dividend | | | — | | | | — | | | | — | | | | — | |
Weighted average fair value per share of options granted during the period | | $ | 9.13 | | | $ | 4.77 | | | $ | 7.55 | | | $ | 4.26 | |
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Employee Stock Purchase Plan: |
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| | Three Months | | | Nine Months | |
Ended September 30, | Ended September 30, |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Expected life (in years) | | | 1.25 | | | | 1.25 | | | | 1.25 | | | | 1.25 | |
Volatility | | | 41.21 | % | | | 51.92 | % | | | 45.29 | % | | | 51.59 | % |
Risk-free interest rate | | | 0.2 | % | | | 0.19 | % | | | 0.19 | % | | | 0.18 | % |
Expected dividend | | | — | | | | — | | | | — | | | | — | |
Weighted average fair of purchase rights granted during the period | | $ | 6.95 | | | $ | 3.46 | | | $ | 5.56 | | | $ | 2.99 | |
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On September 30, 2013, the Company has in effect the following stock-based compensation plans: |
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Stock Plans — At the annual meeting of stockholders on November 16, 2011, the Company’s stockholders approved the 2011 Stock Incentive Plan (the “2011 Plan”). Under the 2011 Plan, the Company may award stock options, stock appreciation rights, stock grants or stock units covering shares of the Company's common stock to employees, directors, non-employee directors and contractors. The aggregate number of shares reserved for awards under this plan is 3,200,000 shares, plus up to 3,500,000 shares previously issued under the 2001 Plan that are forfeited or repurchased by the Company or shares subject to awards previously issued under the 2001 Plan that expire or that terminate without having been exercised or settled in full on or after November 16, 2011. In case of awards other than options or stock appreciation rights, the aggregate number of shares reserved under the plan will be decreased at a rate of 1.33 shares issued pursuant to such awards. The exercise price for stock options must generally be at prices no less than the fair market value at the date of grant. Stock options generally expire ten years from the date of grant and become vested and exercisable over a four-year period. |
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On May 28, 2013, the Company’s stockholders approved the Company’s First Amended and Restated 2011 Stock Incentive Plan to increase the number of authorized shares under such plan by 1,600,000 shares for a total of 4,800,000 shares. |
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In 2001, the Company adopted a 2001 Stock Plan (the “2001 Plan”). In 2003, in connection with its acquisition of IDS Systems Inc., the Company assumed IDS’ 2001 Stock Option / Stock Issuance Plan (the “IDS Plan”). Both of the 2001 and the IDS Plans expired in 2011. Stock options granted under the 2001 and IDS Plans generally expire ten years from the date of grant and become vested and exercisable over a four-year period. Although no new awards may be granted under the 2001 or IDS Plans, awards made under the 2001 and IDS Plans that are currently outstanding remain subject to the terms of each such plan. |
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As of September 30, 2013, 5.2 million shares of common stock were reserved to cover stock-based awards under the 2011 Plan, of which 2.7 million shares were available for future grant. The number of shares reserved and available under the 2011 Plan includes 0.4 million shares that were subject to awards previously made under the 2001 Plan and were forfeited, expired or repurchased by the Company after adoption of the 2011 Plan through September 30, 2013. As of September 30, 2013, there were no outstanding awards that had been granted outside of the 2011, 2001 or the IDS Plans (collectively, the "Stock Plans"). |
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Stock option activity under the Company’s Stock Plans during the nine months ended September 30, 2013 was as follows: |
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| | Number of | | | Weighted | | | Weighted | | | Aggregate | |
Options | Average | Average | Intrinsic |
(in | Exercise | Remaining | Value |
thousands) | Price | Contractual | (in |
| per Share | Term | thousands) |
| | (years) | |
Outstanding, January 1, 2013 | | | 3,810 | | | $ | 6.91 | | | | | | | | | |
Granted | | | 65 | | | $ | 16.07 | | | | | | | | | |
Exercised | | | (682 | ) | | $ | 6.22 | | | | | | | | | |
Canceled | | | (92 | ) | | $ | 8.51 | | | | | | | | | |
Expired | | | (18 | ) | | $ | 5.97 | | | | | | | | | |
Outstanding, September 30, 2013 | | | 3,083 | | | $ | 7.21 | | | | 6.81 | | | $ | 43,248 | |
Vested and expected to vest, September 30, 2013 | | | 2,942 | | | $ | 7.14 | | | | 6.73 | | | $ | 41,451 | |
Exercisable, September 30, 2013 | | | 1,859 | | | $ | 6.65 | | | | 5.85 | | | $ | 27,108 | |
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The aggregate intrinsic value in the table above represents the total intrinsic value based on the Company’s closing stock price of $21.23 per share as of September 30, 2013, which would have been received by the option holders had all “in-the-money” option holders exercised their options as of that date. The total intrinsic value of options exercised during the nine months ended September 30, 2013 was $8.6 million. |
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As of September 30, 2013, there was $4.4 million of total unrecognized compensation cost related to unvested stock options. That cost is expected to be recognized over a weighted average period of 2.22 years. The total fair value of shares vested during the nine months ended September 30, 2013 was $2.3 million. |
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Nonvested restricted stock units activity during the nine months ended September 30, 2013 was as follows: |
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| | Shares | | | Weighted | | | | | | | | | |
(in thousands) | Average | | | | | | | | |
| Grant Date | | | | | | | | |
| Fair Value Per | | | | | | | | |
| Share | | | | | | | | |
Nonvested, January 1, 2013 | | | 450 | | | $ | 7.97 | | | | | | | | | |
Granted | | | 550 | | | $ | 18.15 | | | | | | | | | |
Vested | | | (90 | ) | | $ | 8.87 | | | | | | | | | |
Forfeited | | | (22 | ) | | $ | 8.72 | | | | | | | | | |
Nonvested, September 30, 2013 | | | 888 | | | $ | 14.06 | | | | | | | | | |
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As of September 30, 2013, there was $9.4 million of total unrecognized compensation cost related to nonvested restricted stock units. That cost is expected to be recognized over a weighted average period of 3.0 years. |
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Employee Stock Purchase Plan — In July 2001, the Company adopted a ten-year Employee Stock Purchase Plan (“Purchase Plan”) under which eligible employees can contribute up to 10% of their compensation, as defined in the Purchase Plan, towards the purchase of shares of PDF common stock at a price of 85% of the lower of the fair market value at the beginning of the offering period or the end of the purchase period. The Purchase Plan consists of twenty-four-month offering periods with four six-month purchase periods in each offering period. Under the Purchase Plan, on January 1 of each year, starting with 2002, the number of shares reserved for issuance will automatically increase by the lesser of (1) 675,000 shares, (2) 2% of the Company’s outstanding common stock on the last day of the immediately preceding year, or (3) the number of shares determined by the board of directors. At the annual meeting of stockholders on May 18, 2010, the Company’s stockholders approved an amendment to the Purchase Plan to extend it through May 17, 2020. During the three months and nine months ended September 30, 2013, a total of 80,000 and 184,000 shares, respectively, were issued at a weighted-average purchase price of $9.66 and $7.16 per share, respectively, under the Purchase Plan. During the three months and nine months ended September 30, 2012, a total of 104,000 and 202,000 shares, respectively, were issued at a weighted-average purchase price of $4.89 and $4.85 per share, respectively, under the Purchase Plan. For the three months and nine months ended September 30, 2013, the Purchase Plan compensation expense was $0.1 million and $0.5 million, respectively. For the three months and nine months ended September 30, 2012, the Purchase Plan compensation expense was $0.1 million and $0.3 million, respectively. As of September 30, 2013, there was $0.7 million of unrecognized compensation cost related to the Purchase Plan. That cost is expected to be recognized over a weighted average period of 1.4 years. As of September 30, 2013, 1.3 million shares were available for future issuance under the Purchase Plan. |
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Stock Repurchase Program — On October 29, 2007, the Board of Directors adopted a program to repurchase up to $10.0 million of the Company’s common stock on the open market. The initial program was for three years, but on October 19, 2010, the Board of Directors authorized an extension of, and an increase in, the program and the aggregate amount available to repurchase between October 19, 2010 and October 29, 2012 was reset to $10.0 million of the Company’s common stock, meaning a total of $19.3 million was available. The program expired on October 29, 2012, as of which date, 3.8 million shares had been repurchased at the average price of $4.53 per share and a total purchase price of $17.0 million. On November 8, 2012, the Board of Directors adopted a new program to repurchase up to $20.0 million of the Company’s common stock on the open market over the next two years. As of September 30, 2013, 36,100 shares had been repurchased at the average price of $13.23 per share under this new program, at a total purchase of $0.5 million, and $19.5 million remained available for future repurchases. |