Note 4 - Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 |
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, |
| | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Cost of Design-to-silicon yield-solutions | | $ | 947 | | | $ | 812 | | | $ | 2,467 | | | $ | 1,995 | |
Research and development | | | 426 | | | | 484 | | | | 1,230 | | | | 1,143 | |
Selling, general and administrative | | | 853 | | | | 628 | | | | 2,562 | | | | 1,804 | |
Stock-based compensation expenses | | $ | 2,226 | | | $ | 1,924 | | | $ | 6,259 | | | $ | 4,942 | |
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On September 30, 2014, 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, which was first amended and restated at the 2013 annual meeting of stockholders on May 28, 2013, when the Company’s stockholders approved the First Amended and Restated 2011 Stock Incentive Plan and then subsequently amended at the 2014 annual meeting of stockholders on May 27, 2014, when the Company’s stockholders approved the Second Amended and Restated 2011 Incentive Plan (as amended, 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 6,550,000 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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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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The Company estimated the fair value of share-based awards granted under the Stock Plan 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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| | Three Months | | | Nine Months | |
Ended September 30, | Ended September 30, |
| | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Expected life (in years) | | | 4.58 | | | | 4.78 | | | | 4.58 | | | | 4.78 | |
Volatility | | | 44.88 | % | | | 50.3 | % | | | 43.45 | % | | | 55.83 | % |
Risk-free interest rate | | | 1.63 | % | | | 1.31 | % | | | 1.55 | % | | | 0.94 | % |
Expected dividend | | | — | | | | — | | | | — | | | | — | |
Weighted average fair value per share of options granted during the period | | $ | 7.54 | | | $ | 9.13 | | | $ | 7.44 | | | $ | 7.55 | |
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As of September 30, 2014, 7.0 million shares of common stock were reserved to cover stock-based awards under the 2011 Plan, of which 3.9 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, 2014. As of September 30, 2014, 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, 2014, 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, 2014 | | | 2,880 | | | $ | 7.35 | | | | | | | | | |
Granted (weighted average fair value of $7.44 per share) | | | 19 | | | $ | 19.55 | | | | | | | | | |
Exercised | | | (484 | ) | | $ | 6.33 | | | | | | | | | |
Canceled | | | (33 | ) | | $ | 9.82 | | | | | | | | | |
Expired | | | (6 | ) | | $ | 5.91 | | | | | | | | | |
Outstanding, September 30, 2014 | | | 2,376 | | | $ | 7.63 | | | | 5.96 | | | $ | 12,428 | |
Vested and expected to vest, September 30, 2014 | | | 2,344 | | | $ | 7.59 | | | | 5.93 | | | $ | 12,316 | |
Exercisable, September 30, 2014 | | | 1,762 | | | $ | 7.14 | | | | 5.41 | | | $ | 9,895 | |
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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 $12.61 per share as of September 30, 2014. The total intrinsic value of options exercised during the nine months ended September 30, 2014, was $6.5 million. |
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As of September 30, 2014, there was $2.5 million of total unrecognized compensation cost related to unvested stock options. That cost is expected to be recognized over a weighted average period of 1.5 years. The total fair value of shares vested during the nine months ended September 30, 2014, was $1.6 million. |
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Nonvested restricted stock units activity during the nine months ended September 30, 2014, was as follows: |
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| | Shares | | | Weighted | | | | | | | | | |
(in thousands) | Average | | | | | | | | |
| Grant Date | | | | | | | | |
| Fair Value Per | | | | | | | | |
| Share | | | | | | | | |
Nonvested, January 1, 2014 | | | 759 | | | $ | 14.44 | | | | | | | | | |
Granted | | | 560 | | | $ | 19.52 | | | | | | | | | |
Vested | | | (167 | ) | | $ | 13.77 | | | | | | | | | |
Forfeited | | | (25 | ) | | $ | 17.99 | | | | | | | | | |
Nonvested, September 30, 2014 | | | 1,127 | | | $ | 17.04 | | | | | | | | | |
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As of September 30, 2014, there was $15.1 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 2.8 years. |
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Employee Stock Purchase Plan — In July 2001, the Company adopted a ten-year Employee Stock Purchase Plan (as amended, “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. |
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The Company estimated the fair value of purchase rights granted under the Purchase Plan 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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| | Nine Months | | | | | | | | | |
Ended September 30, | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | |
Expected life (in years) | | | 1.25 | | | | 1.25 | | | | | | | | | |
Volatility | | | 33.46 | % | | | 45.29 | % | | | | | | | | |
Risk-free interest rate | | | 0.21 | % | | | 0.19 | % | | | | | | | | |
Expected dividend | | | — | | | | — | | | | | | | | | |
Weighted average fair value of purchase rights granted under the Purchase Plan | | $ | 6.44 | | | $ | 5.56 | | | | | | | | | |
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During the three months ended September 30, 2014 and 2013,a total of 62,000 and 80,000 shares, respectively, were issued at a weighted-average purchase price of $13.06 and $9.66 per share,. During the nine months ended September 30, 2014 and 2013, a total of 114,000 and 184,000 shares, respectively, were issued at a weighted-average purchase price of $12.62 and $7.16 per share, respectively, under the Purchase Plan. For both the three-month periods ended September 30, 2014 and 2013, the Purchase Plan compensation expense was $0.1 million. For both the nine months ended September 30, 2014 and 2013, the Purchase Plan compensation expense was $0.5 million. As of September 30, 2014, there was $0.4 million of unrecognized compensation cost related to the Purchase Plan. That cost is expected to be recognized over a weighted average period of 1.1 years. As of September 30, 2014, 1.2 million shares were available for future issuance under the Purchase Plan. |
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Stock Repurchase Program — On November 8, 2012, the Board of Directors adopted a 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, 2014, 230,311 shares had been repurchased at the average price of $17.56 per share under this program, at a total purchase of $4.0 million, and $16.0 million remained available for future repurchases. The current program will expire on November 8, 2014. In anticipation of the expiration of the existing program, on October 21, 2014, the Board of Directors adopted a new program, effectively immediately, to repurchase up to $25.0 million of the Company’s common stock both on the open market and in privately negotiated transactions over the next two years. |