SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Sep. 27, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
SHAREHOLDERSb EQUITY AND EMPLOYEE BENEFIT PLANS | ' |
SHAREHOLDERS’ EQUITY AND EMPLOYEE BENEFIT PLANS |
Common Stock and 401(k) Retirement Income Plan |
The Company has a 401(k) retirement income plan (the “Plan”) for its employees. Historically, the Company's matching contributions to the Plan were made in the form of issued and contributed shares of Company common stock; however, beginning January 2, 2011, matching contributions to the Plan are made in cash instead of stock. The Plan allows for employee contributions and matching Company contributions up to 4% or 6% of the employee's contributed amount based upon years of service. |
The following table reflects the Company’s matching contributions to the Plan during fiscal 2014 and 2013: |
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| | Fiscal | | | | | | | | |
(in thousands) | | 2014 | | 2013 | | | | | | | | |
Cash | | $ | 1,278 | | | $ | 1,478 | | | | | | | | | |
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Stock Repurchase Program |
On August 14, 2014, the Company’s Board of Directors authorized a program (the "Program") to repurchase up to $100 million of the Company’s common stock on or before August 14, 2017. The Company has entered into a written trading plan under Rule 10b5-1 of the Exchange Act, to facilitate repurchases under the Program. The Program may be suspended or discontinued at any time and will be funded using the Company's available cash. Under the Program, shares may be repurchased through open market and/or privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under this program will depend on market conditions as well as corporate and regulatory considerations. During the year ended September 27, 2014, the Company repurchased a total of 43.5 thousand shares of common stock at a cost of $0.6 million. The stock repurchases were recorded in the periods they were delivered, and the payment of $0.4 million was accounted for as treasury stock in the Company’s Consolidated Balance Sheet. The Company records treasury stock purchases under the cost method using first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amount in excess of the acquisition cost are credited to additional paid-in capital. If the Company reissues treasury stock at an amount below its acquisition cost and additional paid-in capital associated with prior treasury stock transaction is insufficient to cover the difference between acquisition cost and the reissue price, this difference is recorded against retained earnings. |
Accumulated Other Comprehensive Income |
The following table reflects accumulated other comprehensive income reflected on the Consolidated Balance Sheets as of September 27, 2014 and September 28, 2013: |
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| | As of | | | | | | | | |
(in thousands) | | September 27, 2014 | | September 28, 2013 | | | | | | | | |
Gain from foreign currency translation adjustments | | $ | 3,199 | | | $ | 4,182 | | | | | | | | | |
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Unrecognized actuarial gain, Switzerland pension plan, net of tax | | (609 | ) | | (227 | ) | | | | | | | | |
Switzerland pension plan curtailment | | (346 | ) | | (337 | ) | | | | | | | | |
Accumulated other comprehensive income | | $ | 2,244 | | | $ | 3,618 | | | | | | | | | |
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Equity-Based Compensation |
As of September 27, 2014, the Company had seven equity-based employee compensation plans (the “Employee Plans”) and three director compensation plans (the “Director Plans”) (collectively, the “Plans”). Under these Plans, market-based share awards (collectively, “market-based restricted stock”), time-based share awards (collectively, “time-based restricted stock”), performance-based share awards (collectively, “performance-based restricted stock”), stock options, or common stock have been granted at 100% of the market price of the Company's common stock on the date of grant. As of September 27, 2014, the Company’s one active plan, the 2009 Equity Plan, had 3.7 million shares of common stock available for grant to its employees and directors. |
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• | Market-based restricted stock entitles the employee to receive common shares of the Company on the award vesting date if market performance objectives which measure relative total shareholder return (“TSR”) are attained. Relative TSR is calculated based upon the 90-calendar day average price of the Company's stock as compared to specific peer companies that comprise the Philadelphia Semiconductor Index. TSR is measured for the Company and each peer company over a performance period, which is generally three years. Vesting percentages range from 0% to 200% of awards granted. The provisions of the market-based restricted stock are reflected in the grant date fair value of the award; therefore, compensation expense is recognized regardless of whether or not the market condition is ultimately satisfied. Compensation expense is reversed if the award is forfeited prior to the vesting date. | | | | | | | | | | | | | | | |
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• | In general, stock options and time-based restricted stock awarded to employees vest annually over a three-year period provided the employee remains employed by the Company. The Company follows the non-substantive vesting method for stock options and recognizes compensation expense immediately for awards granted to retirement-eligible employees, or over the period from the grant date to the date retirement eligibility is achieved. | | | | | | | | | | | | | | | |
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• | In general, performance-based restricted stock (“PSU”) entitles the employee to receive common shares of the Company on the three-year anniversary of the grant date (if employed by the Company) if return on invested capital and revenue growth targets set by the Management Development and Compensation Committee (“MDCC”) of the Board of Directors on the date of grant are met. If return on invested capital and revenue growth targets are not met, performance-based restricted stock does not vest. Certain PSUs vest based on achievement of strategic goals over a certain time period or periods set by the MDCC. If the strategic goals are not achieved, the PSUs do not vest. | | | | | | | | | | | | | | | |
Equity-based compensation expense recognized in the Consolidated Statements of Operations for fiscal 2014, 2013, and 2012 was based upon awards ultimately expected to vest. In accordance with ASC No. 718, Compensation - Stock Compensation, forfeitures have been estimated at the time of grant and were based upon historical experience. The Company reviews the forfeiture rates periodically and makes adjustments as necessary. |
The following table reflects total equity-based compensation expense, which includes restricted stock, stock options and common stock, included in the Consolidated Statements of Operations for fiscal 2014, 2013, and 2012: |
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| | Fiscal | | | | |
(in thousands) | | 2014 | | 2013 | | 2012 | | | | |
Cost of sales | | $ | 344 | | | $ | 295 | | | $ | 312 | | | | | |
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Selling, general and administrative | | 8,906 | | | 8,457 | | | 6,602 | | | | | |
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Research and development | | 2,086 | | | 1,918 | | | 1,777 | | | | | |
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Total equity-based compensation expense | | $ | 11,336 | | | $ | 10,670 | | | $ | 8,691 | | | | | |
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The following table reflects equity-based compensation expense, by type of award, for fiscal 2014, 2013, and 2012: |
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| | Fiscal | | | | |
(in thousands) | | 2014 | | 2013 | | 2012 | | | | |
Market-based restricted stock | | $ | 4,960 | | | $ | 4,135 | | | $ | 2,929 | | | | | |
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Time-based restricted stock | | 5,419 | | | 5,545 | | | 4,732 | | | | | |
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Performance-based restricted stock | | 131 | | | 107 | | | 269 | | | | | |
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Stock options | | 17 | | | 43 | | | 41 | | | | | |
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Common stock | | 809 | | | 840 | | | 720 | | | | | |
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Total equity-based compensation expense | | $ | 11,336 | | | $ | 10,670 | | | $ | 8,691 | | | | | |
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Equity-Based Compensation: employee market-based restricted stock |
The following table reflects employee market-based restricted stock activity for fiscal 2014, 2013, and 2012: |
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| Number of shares (in thousands) | | Unrecognized compensation expense (in thousands) | | Average remaining service period (in years) | | Weighted average grant date fair value per share | | | | |
Market-based restricted stock outstanding as of October 1, 2011 | 487 | | | $ | 3,674 | | | 1.9 | | | | | | |
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Granted | 437 | | | | | | | $ | 12.56 | | | | | |
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Forfeited or expired | (10 | ) | | | | | | | | | | |
Market-based restricted stock outstanding as of September 29, 2012 | 914 | | | $ | 6,175 | | | 1.5 | | | | | | |
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Granted | 344 | | | | | | | $ | 13.89 | | | | | |
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Forfeited or expired | (49 | ) | | | | | | | | | | |
Vested | (124 | ) | | | | | | | | | | |
Market-based restricted stock outstanding as of September 28, 2013 | 1,085 | | | 5,913 | | | 1.1 | | | | | | |
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Granted | 335 | | | | | | | $ | 13.46 | | | | | |
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Forfeited or expired | (19 | ) | | | | | | | | | | |
Vested | (333 | ) | | | | | | | | | | |
Market-based restricted stock outstanding as of September 27, 2014 | 1,068 | | | $ | 5,271 | | | 1 | | | | | | |
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Equity-Based Compensation: employee time-based restricted stock |
The following table reflects employee time-based restricted stock activity for fiscal 2014, 2013, and 2012: |
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| Number of shares (in thousands) | | Unrecognized compensation expense (in thousands) | | Average remaining service period (in years) | | Weighted average grant date fair value per share | | | | |
Time-based restricted stock outstanding as of October 1, 2011 | 1,599 | | | $ | 6,096 | | | 1.7 | | | | | | |
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Granted | 695 | | | | | | | $ | 9.15 | | | | | |
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Forfeited or expired | (76 | ) | | | | | | | | | | |
Vested | (686 | ) | | | | | | | | | | |
Time-based restricted stock outstanding as of September 29, 2012 | 1,532 | | | $ | 7,070 | | | 1.4 | | | | | | |
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Granted | 620 | | | | | | | $ | 10.59 | | | | | |
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Forfeited or expired | (132 | ) | | | | | | | | | | |
Vested | (804 | ) | | | | | | | | | | |
Time-based restricted stock outstanding as of September 28, 2013 | 1,216 | | | $ | 6,028 | | | 1.2 | | | | | | |
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Granted | 649 | | | | | | | $ | 11.48 | | | | | |
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Forfeited or expired | (52 | ) | | | | | | | | | | |
Vested | (756 | ) | | | | | | | | | | |
Time-based restricted stock outstanding as of September 27, 2014 | 1,057 | | | $ | 6,720 | | | 1.4 | | | | | | |
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Equity-Based Compensation: employee performance-based restricted stock |
No performance-based restricted stock was issued during fiscal 2012. |
The following table reflects employee performance-based restricted stock activity for fiscal 2014, 2013, and 2012: |
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| Number of shares (in thousands) | | Unrecognized compensation expense (in thousands) | | Average remaining service period (in years) | | | | | | | | |
Performance-based restricted stock outstanding as of October 1, 2011 | 169 | | | — | | | — | | | | | | | | | |
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Vested | (169 | ) | | | | | | | | | | | | |
Performance-based restricted stock outstanding as of September 29, 2012 | — | | | — | | | — | | | | | | | | | |
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Granted | 57 | | | | | | | | | | | | | |
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Performance-based restricted stock outstanding as of September 28, 2013 | 57 | | | 550 | | | 4.2 | | | | | | | | | |
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Granted | — | | | | | | | | | | | | | |
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Performance-based restricted stock outstanding as of September 27, 2014 | 57 | | | 419 | | | 3.2 | | | | | | | | | |
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The following table reflects employee stock option activity for fiscal 2014, 2013, and 2012: |
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| Number of shares (in thousands) | | Weighted average exercise price | | Average remaining contractual life (in years) | | Aggregate intrinsic value (in thousands) | | | | |
Options outstanding as of October 1, 2011 | 1,509 | | | $ | 10.11 | | | | | | | | | |
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Granted | — | | | — | | | | | | | | | |
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Exercised | (374 | ) | | $ | 7.7 | | | | | $ | 829 | | | | | |
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Forfeited or expired | (432 | ) | | $ | 13.35 | | | | | | | | | |
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Options outstanding as of September 29, 2012 | 703 | | | $ | 9.4 | | | | | | | | | |
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Granted | — | | | | | | | | | | | | |
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Exercised | (101 | ) | | $ | 8.96 | | | | | $ | 292 | | | | | |
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Forfeited or expired | (40 | ) | | $ | 9.59 | | | | | | | | | |
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Options outstanding as of September 28, 2013 | 562 | | | $ | 9.56 | | | | | | | | | |
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Exercised | (121 | ) | | $ | 7.84 | | | | | $ | 654 | | | | | |
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Forfeited or expired | (221 | ) | | $ | 11.92 | | | | | | | | | |
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Options outstanding as of September 27, 2014 | 220 | | | $ | 8.14 | | | 2.5 | | $ | 1,358 | | | | | |
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Options vested and expected to vest as of September 27, 2014 | 218 | | | $ | 8.14 | | | 2.5 | | $ | 1,358 | | | | | |
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Options exercisable as of September 27, 2014 | 217 | | | $ | 8.16 | | | 2.5 | | | | | | |
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In the money exercisable options as of September 27, 2014 | 218 | | | | | | | $ | 1,338 | | | | | |
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Since 2010, on average, 10% of stock options granted by the Company become vested each year, and on average, 22% of stock options granted by the Company are forfeited or expire each year. Intrinsic value of stock options exercised is determined by calculating the difference between the market value of the Company's stock price at the time an option is exercised and the exercise price, multiplied by the number of shares. The intrinsic value of stock options outstanding and stock options exercisable is determined by calculating the difference between the Company's closing stock price on the last trading day of fiscal 2014 and the exercise price of in-the-money stock options, multiplied by the number of underlying shares. During fiscal 2014, the Company received $1.1 million in cash from the exercise of employee and non-employee director stock options. |
As of September 27, 2014, total unrecognized compensation cost related to unvested employee stock options was $3,292, which will be amortized over the weighted average remaining service period of less than a 1 year. |
The following table reflects outstanding and exercisable employee stock options as of September 27, 2014: |
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| | Options Outstanding | | Options Exercisable |
Range of exercise prices | | Options outstanding (in thousands) | | Weighted average remaining contractual life (in years) | | Weighted average exercise price | | Options exercisable (in thousands) | | Weighted average exercise price |
3.06 - 7.08 | | 19 | | | 5.1 | | $ | 4.94 | | | 16 | | | $ | 4.73 | |
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7.14 - 7.31 | | 27 | | | 0.1 | | 7.14 | | | 27 | | | 7.14 | |
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8.43 - 9.64 | | 174 | | | 2.7 | | 8.65 | | | 174 | | | 8.65 | |
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| | 220 | | | 2.5 | | $ | 8.14 | | | 217 | | | $ | 8.16 | |
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Equity-Based Compensation: non-employee directors |
The 2009 Equity Plan provides for the grant of common shares to each non-employee director upon initial election to the board and on the first business day of each calendar quarter while serving on the board. The grant to a non-employee director upon initial election to the board is that number of common shares closest in value to, without exceeding, $120,000. The quarterly grant to a non-employee director upon the first business day of each calendar year quarter is that number of common shares closest in value to, without exceeding, $30,000. |
The following table reflects shares of common stock issued to non-employee directors and the corresponding fair value for fiscal 2014, 2013, and 2012: |
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| Fiscal | | | | | |
(in thousands) | 2014 | | 2013 | | 2012 | | | | | |
Number of common shares issued | 63 | | | 74 | | | 78 | | | | | | |
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Fair value based upon market price at time of issue | $ | 810 | | | $ | 908 | | | $ | 720 | | | | | | |
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The following table reflects non-employee director stock option activity for fiscal 2014, 2013, and 2012: |
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| Number of shares (in thousands) | | Weighted average exercise price | | Average remaining contractual life (in years) | | Aggregate intrinsic value (in thousands) | | | | |
Options outstanding as of October 1, 2011 | 258 | | | $ | 11.78 | | | | | | | | | |
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Exercised | (63 | ) | | $ | 6.89 | | | | | $ | 300 | | | | | |
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Forfeited or expired | (60 | ) | | $ | 17.62 | | | | | | | | | |
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Options outstanding as of September 29, 2012 and September 28, 2013 | 135 | | | $ | 11.45 | | | | | $ | 614 | | | | | |
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Exercised | (10 | ) | | $ | 11.2 | | | | | | | | | |
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Forfeited or expired | (70 | ) | | $ | 12.45 | | | | | | | | | |
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Options outstanding as of September 27, 2014 | 55 | | | $ | 10.22 | | | 1.3 | | $ | 225 | | | | | |
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Options vested and expected to vest as of September 27, 2014 | 55 | | | $ | 10.22 | | | 1.3 | | $ | 225 | | | | | |
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Options exercisable as of September 27, 2014 | 55 | | | $ | 10.22 | | | 1.3 | | | | | | |
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In the money exercisable options as of September 27, 2014 | 55 | | | | | | | $ | 225 | | | | | |
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No non-employee director stock options were granted during fiscal 2014, 2013, and 2012. |
Pension Plan |
The following table reflects the Company's defined benefits pension obligations as of September 27, 2014 and September 28, 2013: |
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| | As of | | | | | | | | |
(in thousands) | September 27, 2014 | | | September 28, 2013 | | | | | | | | | |
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Switzerland pension obligation | $ | 703 | | | $ | 388 | | | | | | | | | |
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Taiwan pension obligation | 1,323 | | | 1,323 | | | | | | | | | |
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| Total pension obligation | $ | 2,026 | | | $ | 1,711 | | | | | | | | | |
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In accordance with regulations in Switzerland, the Company sponsors in Switzerland a pension plan covering active employees whose minimum benefits are guaranteed. During fiscal 2012, the Company announced the intention to reduce its Switzerland workforce by approximately 41 employees, which triggered a further curtailment of the Switzerland pension plan under ASC No. 715, Topic 30, Compensation - Retirement Benefits, Defined Benefit Plans. As a result, the Company recognized a pretax curtailment and settlement gain of $1.7 million and $2.1 million in fiscal 2012 and 2013, respectively. There were no significant pre-tax curtailment settlement gain for fiscal 2014. |
Other Plans |
Some of the Company's other foreign subsidiaries have retirement plans that are integrated with and supplement the benefits provided by laws of the various countries. These other plans are not required to report nor do they determine the actuarial present value of accumulated benefits or net assets available for plan benefits as they are defined contribution plans. |