XML 46 R23.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Stock-Based Compensation | 12 Months Ended
--- | ---
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation |
16) | Stock-Based Compensation
Employee Stock Purchase Plans The 2014 ESPP Plan was adopted by the Board of Directors on February 10, 2014 and approved by the Company’s stockholders on May 5, 2014. The 2014 ESPP Plan authorizes the issuance of up to an aggregate of 2,500,000 shares of common stock to participating employees. Offerings under the 2014 ESPP Plan commence on June 1 and December 1 and terminate, respectively, on November 30 and May 31. Historically, under the 2014 ESPP Plan, eligible employees could purchase shares of common stock through payroll deductions of up to 10% of their compensation or up to an annual maximum amount of $21,250. The price at which an employee’s purchase option was exercised for each offering period was the lower of (1) 85% of the closing price of the common stock on the Nasdaq Global Select Market on the day that each offering commences, or (2) 85% of the closing price on the day that the offering terminated. On January 31, 2017, the Compensation Committee of the Board of Directors approved an increase in the exercise price to the lower of (1) 90% of the closing price of the common stock on the Nasdaq Global Select Market on the day that each offering commences, or (2) 90% of the closing price on the day that each offering terminates. The increase in the exercise price became effective for the Offering commencing on June 1, 2017. As a result of this change, the annual maximum payroll deduction was increased from $21,250 to $22,500. During 2018, 2017, and 2016, the Company issued 105,672, 105,506, and 139,079 shares, respectively, of common stock to employees who participated in the 2014 ESPP Plan at exercise prices of $84.11 and $70.61 per share in 2018, $46.37 and $74.12 per share in 2017, and $31.40 and $35.16 per share in 2016. As of December 31, 2018, there were 1,926,731 shares reserved for future issuance under the 2014 ESPP Plan. Equity Incentive Plans The Company has granted RSUs to employees and directors under the 2014 Stock Incentive Plan (the “2014 Plan”). The 2014 Plan is administered by the Compensation Committee of the Company’s Board of Directors. The 2014 Plan is intended to attract and retain employees and directors, and to provide an incentive for these individuals to assist the Company to achieve long-range performance goals and to enable these individuals to participate in the long-term growth of the Company. The 2014 Plan was adopted by the Board of Directors on February 10, 2014 and was approved by the Company’s stockholders on May 5, 2014. Up to 18,000,000 shares of common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under the 2014 Plan. The Company may grant options, RSUs, restricted stock, stock appreciation rights (“SARs”) and other stock-based awards to employees, officers, directors, consultants and advisors under the 2014 Plan. Any full-value awards granted under the 2014 Plan will be counted against the shares reserved for issuance under the 2014 Plan as 2.4 shares for each share of common stock subject to such award and any award granted under the 2014 Plan that is not a full-value award (including, without limitation, any option or SAR) will be counted against the shares reserved for issuance under the plan as one share for each one share of common stock subject to such award. “Full-value award” means any RSU, or other stock-based award with a per share price or per unit purchase price lower than 100% of fair market value on the date of grant. To the extent a share that was subject to an award that counted as one share is returned to the 2014 Plan, each applicable share reserve will be credited with one share. To the extent that a share that was subject to an award that counts as 2.4 shares is returned to the 2014 Plan, each applicable share reserve will be credited with 2.4 shares. As of December 31, 2018, there were 14,079,849 shares reserved for future issuance under the 2014 Plan. The Company’s 2004 Stock Incentive Plan (the “2004 Plan”) expired in March 2014 and no further awards may be granted under the 2004 Plan, although there are still outstanding RSUs which may vest under the 2004 Plan. The 2004 Plan, the 1995 Plan, the 1997 Director Stock Plan and the 2014 Plan are referred to herein as the “Plans.” RSUs granted to employees in 2018, 2017 and 2016 generally vest 33% per year on the anniversary of the date of grant. RSUs granted to certain employees who are at least 60 years old and have a minimum of 10 Years of Service (as defined in the applicable RSU agreement) are expensed immediately. RSUs granted to directors generally vest at the earliest of (1) one day prior to the next annual meeting, (2) 13 months from date of grant, or (3) the effective date of a change in control of the Company. Certain RSUs are subject to performance conditions (“performance shares”) under the Company’s 2004 Plan and 2014 Plan. Such performance shares are available, subject to time-based vesting conditions, if, and to the extent that, financial or operational performance criteria for the applicable period are achieved. Accordingly, the number of performance shares earned will vary based on the level of achievement of financial or operational performance objectives for the applicable period. In connection with the completion of the Newport Merger, the Company assumed:
| • |  | all RSUs granted under any Newport equity plan that were outstanding immediately prior to the effective time of the Newport Merger, and as to which shares of Newport common stock were not fully distributed in connection with the closing of the Newport Merger, and
| • |  | all stock appreciation rights granted under any Newport equity plan, whether vested or unvested, that were outstanding immediately prior to the effective time of the Newport Merger.
As of the effective time of the Newport Merger, based on a formula provided in the Merger Agreement, (a) the Newport RSUs were converted automatically into RSUs with respect to 360,674 shares of the Company’s common stock (the “Assumed RSUs”), and (b) the Newport stock appreciation rights were converted automatically into SARs with respect to 899,851 shares of the Company’s common stock (the “Assumed SARs”). Included in the total number of Assumed RSUs were 36,599 RSUs for outside directors that were part of the Newport Deferred Compensation Plan (the “DC Plan”), from which 19,137 underlying shares were released in May 2016, 5,515 shares were released in May 2017 and 5,561 shares were released in May 2018. As of December 31, 2018, 6,694 Company RSUs remained outstanding under the DC Plan, and an additional 66 shares of the Company’s common stock were added to the DC Plan due to reinvested dividends. As of December 31, 2017, 12,134 Company RSUs remained outstanding under the DC Plan, and an additional 122 shares of the Company’s common stock were added to the DC Plan due to reinvested dividends. As of December 31, 2016, 17,462 Company RSUs remained outstanding under the DC Plan, and an additional 187 shares of the Company’s common stock were added to the DC Plan due to reinvested dividends. These Assumed RSUs will not become issued shares until their respective release dates. The shares of the Company’s common stock that are subject to the Assumed SARs and the Assumed RSUs are issuable pursuant to the Company’s 2014 Plan. The 1,260,525 shares of the Company’s common stock that are issuable pursuant to the Assumed RSUs and the Assumed SARs under the 2014 Plan were registered under the Securities Act of 1933, as amended (“Securities Act”), on a registration statement on Form S-8. These shares are in addition to the 18,000,000 shares of the Company’s common stock reserved for issuance under the 2014 Plan and previously registered under the Securities Act on a registration statement on Form S-8. The following table presents the activity for RSUs under the Plans:
|  | Year Ended December 31, 2018 |
|  | Non-vested RSUs |  |  | Weighted Average Grant Date Fair Value |
Non-vested RSUs — beginning of period |  |  | 943,379 |  |  | $ | 47.57 |
Accrued dividend shares |  |  | 66 |  |  | $ | 94.11 |
Granted |  |  | 266,411 |  |  | $ | 111.64 |
Vested |  |  | (490,453 | ) |  | $ | 44.70 |
Forfeited or expired |  |  | (72,009 | ) |  | $ | 66.22 |
Non-vested RSUs — end of period |  |  | 647,394 |  |  | $ | 74.04 |
The following table presents the activity for SARs under the Plans:
|  | Year Ended December 31, 2018 |
|  | Non-vested SARs |  |  | Weighted Average Base Value |
SARs — beginning of period |  |  | 282,907 |  |  | $ | 28.62 |
Exercised |  |  | (103,419 | ) |  | $ | 28.78 |
Forfeited or expired |  |  | (1,950 | ) |  | $ | 29.00 |
SARs Outstanding — end of period |  |  | 177,538 |  |  | $ | 28.52 |
At December 31, 2018, the Company’s outstanding and exercisable SARs, the weighted-average base value, the weighted average remaining contractual life and the aggregate intrinsic value thereof, were as follows:
|  | Number of Shares |  |  | Weighted Average Base Value |  |  | Weighted Average Remaining Contractual Life (years) |  |  | Aggregate Intrinsic Value |
SARs outstanding and exercisable |  |  | 177,538 |  |  | $ | 28.52 |  |  |  | 2.4 |  |  | $ | 6,408 |
The Company settles employee RSU vesting and SARs exercises with newly issued shares of the Company’s common stock. Stock-Based Compensation Expense The Company recognized the full impact of its share-based payment plans in the consolidated statements of operations and comprehensive income for the years 2018, 2017 and 2016. As of December 31, 2018, 2017, and 2016, the Company capitalized $471 of such cost on its consolidated balance sheet. The following table reflects the effect of recording stock-based compensation for the years 2018, 2017 and 2016:
|  | Years Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Stock-based compensation expense by type of award: |  |  |  |  |  |  |  |  |  |  |  |
RSUs |  | $ | 24,883 |  |  | $ | 22,428 |  |  | $ | 23,302 |
SARs |  |  | 98 |  |  |  | 529 |  |  |  | 700 |
Employee stock purchase plan |  |  | 2,281 |  |  |  | 1,421 |  |  |  | 1,226 |
Total stock-based compensation |  | $ | 27,262 |  |  |  | 24,378 |  |  |  | 25,228 |
Windfall tax effect on stock-based compensation |  |  | (8,277 | ) |  |  | (11,071 | ) |  |  | — |
Net effect on net income |  | $ | 18,985 |  |  | $ | 13,307 |  |  | $ | 25,228 |
Effect on net earnings per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.35 |  |  | $ | 0.25 |  |  | $ | 0.47 |
Diluted |  | $ | 0.35 |  |  | $ | 0.24 |  |  | $ | 0.47 |
The pre-tax effect within the consolidated statements of operations and comprehensive income of recording stock-based compensation for the years 2018, 2017 and 2016 was as follows:
|  | Years Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Cost of revenues |  | $ | 3,516 |  |  | $ | 3,894 |  |  | $ | 2,997 |
Research and development expense |  |  | 2,750 |  |  |  | 2,816 |  |  |  | 2,529 |
Selling, general and administrative expense |  |  | 20,996 |  |  |  | 17,668 |  |  |  | 19,702 |
Total pre-tax stock-based compensation expense |  | $ | 27,262 |  |  | $ | 24,378 |  |  | $ | 25,228 |
Valuation Assumptions The Company determines the fair value of RSUs based on the closing market price of the Company’s common stock on the date of the award, and estimates the fair value of employee stock purchase plan rights using the Black-Scholes valuation model. Such values are recognized as expense on a straight-line basis for time-based awards and using the accelerated graded vesting method for performance-based awards, both over the requisite service periods, net of estimated forfeitures except for retirement eligible employees in which the Company expenses the fair value of the grant in the period the grant is issued. The estimation of stock-based awards that will ultimately vest requires significant judgment. The Company considers many factors when estimating expected forfeitures, including types of awards and historical experience. Actual results, and future changes in estimates, may differ substantially from the Company’s current estimates. The weighted average fair value per share of employee stock purchase plan rights granted in 2018, 2017 and 2016 was $21.74, $13.14, and $8.52, respectively. The fair value of the employees’ purchase plan rights was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:
|  | Years Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Employee stock purchase plan rights: |  |  |  |  |  |  |  |  |  |  |  |
Expected life (years) |  |  | 0.5 |  |  |  | 0.5 |  |  |  | 0.5 |
Risk-free interest rate |  |  | 1.8 | % |  |  | 0.8 | % |  |  | 0.5 | %
Expected volatility |  |  | 38.6 | % |  |  | 26.5 | % |  |  | 25.4 | %
Expected annual dividends per share |  | $ | 0.76 |  |  | $ | 0.69 |  |  | $ | 0.68 |
Expected volatilities for 2018, 2017 and 2016 are based on a combination of implied and historical volatilities of the Company’s common stock; the expected life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and the Company’s historical exercise patterns; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The total intrinsic value of SARs exercised and the total fair value of RSUs vested during 2018, 2017 and 2016 was approximately $61,626, $60,302 and $18,844, respectively. As of December 31, 2018, the unrecognized compensation cost related to RSUs and SARs was approximately $19,039 and will be recognized over and estimated weighted average amortization period of 0.91 years.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration