Note 6 - Stock Based Compensation | 6 Months Ended |
Jun. 28, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' |
6 | STOCK BASED COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Equity Compensation Plans |
|
The Company has two active equity compensation plans under which equity securities are authorized for issuance to employees and/or directors and two plans (the 1995 Plan and 1997 Plan, described below) which have been terminated: |
|
■ | The 1995 Long-Term Incentive and Share Award Plan for Officers and Directors (terminated February 28, 2005) (1995 Plan); | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
■ | The 1997 Long Term Incentive and Share Award Plan (terminated February 28, 2005) (1997 Plan); | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
■ | The Amended and Restated (as of March 30, 2013) 2005 Long Term Incentive and Share Award Plan (2005 Plan, collectively with the 1995 Plan and the 1997 Plan, the Plans); and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
■ | The Employee Stock Purchase Plan (ESP Plan). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Employees and outside directors have been granted restricted stock units and options to purchase shares of common stock under stock option plans adopted in 1995, 1997 and 2005. An aggregate of 4,913, 5,100 and 24,850 shares of common stock were reserved for issuance under the 1995 Plan, the 1997 Plan and the 2005 Plan, respectively. The Plans provide for the granting of stock options, stock appreciation rights, restricted stock units and other share based awards to eligible employees and directors, as defined in the Plans. Option grants have terms of ten years and become exercisable in varying amounts over periods of up to three years. To date, no stock appreciation rights have been granted under the Plans. |
|
In 1995, the Company adopted the ESP Plan under Section 423 of the Internal Revenue Code. All full-time employees of ANADIGICS, Inc. and part-time employees, as defined in the ESP Plan, are eligible to participate in the ESP Plan. An aggregate of 6,694 shares of common stock were reserved for offering under the ESP Plan. Offerings are made at the commencement of each calendar year and must be purchased by the end of that calendar year. Pursuant to the terms of the ESP Plan, shares purchased and the applicable per share price were 271 and $1.64, respectively for the year ended December 31, 2013. |
|
The table below summarizes stock based compensation by source and by financial statement line item for the three and six month periods: |
|
| | Three months ended | | | Six months ended | | | | | | | | | | | | | | | | | |
| | June 28, | | | June 29, | | | June 28, | | | June 29, | | | | | | | | | | | | | | | | | |
2014 | 2013 | 2014 | 2013 | | | | | | | | | | | | | | | | |
Amortization of restricted stock units | | $ | 1,282 | | | $ | 2,037 | | | $ | 3,016 | | | $ | 3,267 | | | | | | | | | | | | | | | | | |
Amortization of ESP Plan | | | 25 | | | | 120 | | | | 85 | | | | 270 | | | | | | | | | | | | | | | | | |
Amortization of stock option awards | | | 49 | | | | (101 | ) | | | 98 | | | | 20 | | | | | | | | | | | | | | | | | |
Total stock based compensation | | $ | 1,356 | | | $ | 2,056 | | | $ | 3,199 | | | $ | 3,557 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
By Financial Statement line item | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of sales | | $ | 246 | | | $ | 413 | | | $ | 522 | | | $ | 592 | | | | | | | | | | | | | | | | | |
Research and development expenses | | | 522 | | | | 695 | | | | 1,076 | | | | 1,040 | | | | | | | | | | | | | | | | | |
Selling and administrative expenses | | | 588 | | | | 948 | | | | 1,601 | | | | 1,996 | | | | | | | | | | | | | | | | | |
Restructuring charge | | | - | | | | - | | | | - | | | | (71 | ) | | | | | | | | | | | | | | | | |
|
No tax benefits have been recorded due to the Company’s full valuation allowance position. |
|
Restricted Stock Units and Stock Option Awards |
|
Under the Plans, the Company grants restricted stock units to its employees. The value of restricted stock units are fixed upon the date of grant and amortized over the related vesting period, primarily ranging up to three years. Restricted stock units are subject to forfeiture if employment terminates prior to vesting. The Company estimates that approximately 2.5% of its restricted stock units and stock option awards are forfeited annually (exclusive of performance-based restricted stock units and performance-based option shares, as described below). Restricted stock units do not carry voting, forfeitable dividend rights, and cannot be traded or transferred prior to vesting. Grant, vest and forfeit activity and related weighted average (WA) price per share for restricted stock units and for stock options during the period from January 1, 2013 to June 28, 2014 is presented in tabular form below: |
|
| | Time-based | | | Performance- | | | Time-based | | | Performance-based | |
Restricted | based | Stock Options | Stock Options |
Stock Units | Restricted | | |
| Stock Units | | |
| | Units | | | WA | | | Units | | | WA | | | Issuable | | | WA | | | Issuable | | | WA | |
price/ | price/ | upon | exercise | upon | exercise |
unit | unit | exercise | price | exercise | price |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Outstanding at January 1, 2013 | | | 1,430 | | | $ | 4.63 | | | | - | | | $ | - | | | | 2,328 | | | $ | 5.01 | | | | 167 | | | $ | 3.24 | |
Granted | | | 2,949 | | | | 2.12 | | | | 560 | | | | 2.02 | | | | 13 | | | | 2.26 | | | | - | | | | - | |
Shares vested/options exercised | | | (1,539 | ) | | | 3.34 | | | | - | | | | - | | | | (69 | ) | | | 1.93 | | | | - | | | | - | |
Forfeited/expired (1) | | | (144 | ) | | | 3.75 | | | | (384 | ) | | | 2.02 | | | | (355 | ) | | | 4.25 | | | | (125 | ) | | | 3.24 | |
Balance at December 31, 2013 | | | 2,696 | | | $ | 2.67 | | | | 176 | | | $ | 2.02 | | | | 1,917 | | | $ | 5.24 | | | | 42 | | | $ | 3.24 | |
Granted | | | 2,106 | | | | 1.7 | | | | 413 | | | | 1.84 | | | | 3 | | | | 1.91 | | | | - | | | | - | |
Shares vested/options exercised | | | (1,478 | ) | | | 3.13 | | | | (19 | ) | | | 2.01 | | | | (5 | ) | | | 1.83 | | | | - | | | | - | |
Forfeited/expired | | | (104 | ) | | | 2.03 | | | | (10 | ) | | | 1.84 | | | | (643 | ) | | | 5.96 | | | | (42 | ) | | | 3.24 | |
Balance at June 28, 2014 | | | 3,220 | | | $ | 1.85 | | | | 560 | | | $ | 1.89 | | | | 1,272 | | | $ | 4.88 | | | | - | | | $ | - | |
|
| -1 | In the second quarter of 2013, 125 time-based and 83 (125 at maximum performance achievement) market performance-based stock options were rescinded with the consent of and without payment to the Chief Executive Officer (CEO) due to the fact that the original grants with respect to which these options were a part of exceeded the sub-limits of the applicable plan by the number of shares as to which the options were rescinded. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
In June 2011, the Company’s CEO was awarded a base grant of 250 market performance-based stock options contingent upon the Company’s shareholder return performance against the performance of the Philadelphia Semiconductor Index component companies. Following the rescission discussed in footnote (1) in the table immediately above, the base grant was reduced by 83 market performance-based stock options during the second quarter of 2013. The award and market performance was evaluated during the one, two and three-year periods following the award. The market performance-based stock options had an exercise price of $3.24, an expiration of 10 years after the grant date, and an average fair value of $2.62 on the date of grant. The fair value estimate was calculated with the assistance of a valuation consultant using a Monte Carlo Simulation model. In the second quarters of 2012, 2013, and 2014, 83, 42 and 42 shares, respectively, were forfeited for non-achievement of market performance goals at the end of their three year annual measurement periods. |
|
On February 16, 2012, subject to stockholder approval of additional 2005 Plan shares at the Company’s 2013 Annual Stockholder Meeting (at which such approval was received), the Company awarded 661 time-based and 220 Company performance-based restricted stock units to its officers and employees. The time-based restricted stock units vested one-third on May 20, 2013 and one-third on February 18, 2014, and vest one-third on February 18, 2015. The Company performance-based restricted stock units vest based on absolute total stockholder return for one-year, two-year and three-year periods starting from the baseline date of December 31, 2011, compared to total stockholder return targets for each of the respective periods. As of December 31, 2013, the performance metrics for the first and second year periods were not met on the Company performance-based awards and 155 restricted stock units were forfeited. |
|
On December 4, 2012, subject to stockholder approval of additional 2005 Plan shares at the Company’s 2013 Annual Stockholder Meeting (at which such approval was received), the Company awarded 660 restricted stock units to its officers and other key employees (subsequently increased by 20 units awarded to an additional officer in July 2013). Fifty percent of these restricted stock units have time-based vesting conditions and fifty percent have Company performance-based vesting conditions. The restricted stock units vest one-third annually in May 2014, 2015, and 2016 (August 2014, 2015 and 2016 vest for the July 2013 grant). The Company performance-based awards were evaluated based on the Company’s adjusted cash flow from operations for the year ended December 31, 2013, with 34.8% of the Company performance metrics achieved, 111 performance-based restricted stock units qualified for vest, and the remaining 229 performance-based stock units were forfeited. |
|
On February 13, 2014, the Company awarded 825 restricted stock units to its officers and other key employees where fifty percent of these restricted stock units have time-based vesting conditions and fifty percent (assuming maximum goal performance) have market performance-based vesting conditions contingent upon the Company’s relative shareholder returns measured against the peer group companies. The restricted stock units will vest, if at all, one-third annually in March 2015, 2016, and 2017. The market performance-based awards will be evaluated annually in one-third increments measuring Company shareholder returns during the one, two and three year periods following the award. Company performance within the 75th percentile tier in a measurement period would result in maximum performance attainment, while performance below the 25th-percentile results in no vesting for that period. The performance-based restricted stock units have an average fair value of $1.84 on the date of grant, calculated with the assistance of a valuation consultant using a Monte Carlo Simulation model. As of June 28, 2014, 10 performance-based restricted awards have forfeited. |
|
As of June 28, 2014, unrecognized stock based compensation cost and weighted average remaining recognition periods for our equity compensation plans are as follows: |
|
| | As of June 28, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unrecognized stock based compensation cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Option plans | | $ | 9 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Restricted stock units | | $ | 3,963 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average remaining recognition period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Option plans (Years) | | 1.9 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Restricted stock units (Years) | | 1.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Stock options outstanding at June 28, 2014 are summarized as follows: |
|
Range of exercise prices | | Outstanding | | | Weighted | | | Weighted | | | Exercisable | | | Weighted | | | | | | | | | | | | | |
Options at June | average | average | at June 28, | average | | | | | | | | | | | | |
28, 2014 | remaining | exercise | 2014 | exercise | | | | | | | | | | | | |
| contractual | price | | price | | | | | | | | | | | | |
| life | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
$1.23 - $1.93 | | | 466 | | | | 4.3 | | | $ | 1.93 | | | | 459 | | | $ | 1.93 | | | | | | | | | | | | | |
$2.00 - $3.24 | | | 275 | | | | 6.7 | | | $ | 3.19 | | | | 241 | | | $ | 3.19 | | | | | | | | | | | | | |
$3.30 - $8.79 | | | 147 | | | | 2.8 | | | $ | 5.49 | | | | 147 | | | $ | 5.49 | | | | | | | | | | | | | |
$8.84 - $18.98 | | | 384 | | | | 2.3 | | | $ | 9.46 | | | | 384 | | | $ | 9.46 | | | | | | | | | | | | | |
|
Valuation Method for ESP Plan and Stock Option Awards |
|
The fair value of these equity awards was estimated at the date of grant using a Black-Scholes option pricing model. The weighted average assumptions and fair values for stock based compensation grants used for the six month periods ended June 28, 2014 and June 29, 2013 are summarized below: |
|
| | Six months ended | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 28-Jun-14 | | | 29-Jun-13 | | | | | | | | | | | | | | | | | | | | | | | | | |
Stock option awards: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Risk-free interest rate | | | 1.7 | % | | | 0.8 | % | | | | | | | | | | | | | | | | | | | | | | | | |
Expected volatility | | | 58 | % | | | 72 | % | | | | | | | | | | | | | | | | | | | | | | | | |
Average expected term (in years) | | | 5 | | | | 5 | | | | | | | | | | | | | | | | | | | | | | | | | |
Expected dividend yield | | | 0 | % | | | 0 | % | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average fair value of options granted | | $ | 0.97 | | | $ | 1.41 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ESP Plan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Risk-free interest rate | | | 0.1 | % | | | 0.2 | % | | | | | | | | | | | | | | | | | | | | | | | | |
Expected volatility | | | 57 | % | | | 65 | % | | | | | | | | | | | | | | | | | | | | | | | | |
Average expected term (in years) | | | 1 | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | |
Expected dividend yield | | | 0 | % | | | 0 | % | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average fair value of purchase option | | $ | 0.28 | | | $ | 0.78 | | | | | | | | | | | | | | | | | | | | | | | | | |
|
For equity awards with an expected term of one year or less, the assumption for expected volatility is solely based on the Company’s historical volatility, whereas for equity awards with expected terms of greater than one year, the assumption is based on a combination of implied and historical volatility. |