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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
STOCK-BASED COMPENSATION |
14. | STOCK-BASED COMPENSATION:
Equity Compensation Plan The Equity Compensation Plan provides for the granting of incentive and nonqualified stock options, shares of common stock, stock appreciation rights and performance units to employees, directors and consultants of the Company. Stock options are exercisable over periods determined by the Compensation Committee, but for no longer than 10 years from the grant date. Through December 31, 2019, the Company’s shareholders have approved increases in the number of shares reserved for issuance under the Equity Compensation Plan to 10,500,000, and have extended the term of the plan through 2024. As of December 31, 2019, there were 2,248,573 shares that remained available to be granted under the Equity Compensation Plan. Stock Options The following table summarizes the stock option activity during the year ended December 31, 2019 for all the grants under the Equity Compensation Plan (in thousands, except share and per share data):
|  | Options |  |  | Weighted Average Exercise Price |
Outstanding at January 1, 2019 |  |  | 500 |  |  | $ | 10.04 |
Forfeited/Expired |  |  | (500 | ) |  |  | 10.04 |
Outstanding at December 31, 2019 |  |  | — |  |  | $ | — |
No stock options were granted during the years ended December 31, 2019, 2018 and 2017. The total intrinsic value of stock options exercised during the year ended December 31, 2017 was $146,000. No stock options were exercised during the years ended December 31, 2019 and 2018. There was no compensation expense recognized for the years ended December 31, 2019, 2018 and 2017. During the years ended December 31, 2019, 2018 and 2017, no shares of common stock were tendered to net share settle the exercise of options. Restricted Stock Award and Units The Company has issued restricted stock awards and units to employees and non-employees with vesting terms of one to six years. The fair value is equal to the market price of the Company’s common stock on the date of grant for awards granted to employees and equal to the market price at the end of the reporting period for unvested non-employee awards or upon the date of vesting for vested non-employee awards. Expense for restricted stock awards and units is amortized ratably over the vesting period for the awards issued to employees and using a graded vesting method for the awards issued to non-employees. The following table summarizes the activity related to restricted stock unit (RSU) share based payment awards:
|  | Number of Shares |  |  | Weighted- Average Grant-Date Fair Value |
Unvested, January 1, 2019 |  |  | 92,381 |  |  | $ | 97.56 |
Granted |  |  | 58,549 |  |  |  | 168.95 |
Vested |  |  | (49,635 | ) |  |  | 87.96 |
Forfeited |  |  | (2,485 | ) |  |  | 103.79 |
Unvested, December 31, 2019 |  |  | 98,810 |  |  | $ | 144.53 |
The weighted average grant-date fair value of RSU awards granted was $168.95, $115.48 and $116.58 during the years ended December 31, 2019, 2018 and 2017, respectively. The fair value as of the respective vesting dates of RSUs was $7.7 million, $8.1 million and $8.3 million for 2019, 2018 and 2017, respectively. The following table summarizes the activity related to restricted stock award (RSA) share based payment awards:
|  | Number of Shares |  |  | Weighted- Average Grant-Date Fair Value |
Unvested, January 1, 2019 |  |  | 409,949 |  |  | $ | 46.74 |
Granted |  |  | 73,640 |  |  |  | 194.19 |
Vested |  |  | (171,946 | ) |  |  | 47.89 |
Unvested, December 31, 2019 |  |  | 311,643 |  |  | $ | 80.94 |
The weighted average grant-date fair value of RSA awards granted was $194.19, $122.15 and $83.25 during the years ended December 31, 2019, 2018 and 2017, respectively. The fair value as of the respective vesting dates of RSAs was $28.4 million, $17.7 million and $14.8 million for 2019, 2018 and 2017, respectively. For the years ended December 31, 2019, 2018 and 2017, the Company recorded, as compensation charges related to restricted stock awards and units issued to employees and non-employees, selling, general and administrative expense of $10.0 million, $7.6 million and $8.5 million, respectively, cost of sales of $1.1 million, $758,000 and $443,000, respectively, and research and development expense of $2.5 million, $2.0 million and $1.6 million, respectively. In connection with the vesting of restricted stock awards and units during the years ended December 31, 2019, 2018 and 2017, 86,075, 86,679 and 89,661 shares, respectively, with aggregate fair values of $14.0 million, $9.2 million and $7.8 million, respectively, were withheld in satisfaction of tax withholding obligations and are reflected as a financing activity within the Consolidated Statements of Cash Flows. For the years ended December 31, 2019, 2018 and 2017, the Company recorded as compensation charges related to all restricted stock units to non-employee members of the Scientific Advisory Board, whose unvested shares are marked to market each reporting period, research and development expense of $632,000, $64,000 and $976,000, respectively. The Company has granted restricted stock units to non-employee members of the Board of Directors with quarterly vesting over a period of approximately one year. The fair value is equal to the market price of the Company’s common stock on the date of grant. The restricted stock units are issued and expense is recognized ratably over the vesting period. For the years ended December 31, 2019, 2018 and 2017, the Company recorded compensation charges for services performed, related to all restricted stock units granted to non-employee members of the Board of Directors, selling, general and administrative expense of $916,000, $4.3 million and $1.6 million, respectively. In connection with the vesting of the restricted stock, the Company issued to non-employee members of the Board of Directors 9,332, 25,000 and 27,500 shares during the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, the total unrecognized expense related to all restricted stock awards and units was $30.0 million, which the Company expects to recognize over a weighted average period of 2.25 years. Performance Unit Awards Each performance unit award is subject to both a performance-vesting requirement (either performance-based or market-based) and a service-vesting requirement. The performance-based vesting requirement is tied to the Company's cumulative revenue growth compared to the cumulative revenue growth of companies comprising the Nasdaq Electronics Components Index, as measured over a specific performance period. The market-based vesting requirement is tied to the Company's total shareholder return relative to the total shareholder return of companies comprising the Nasdaq Electronics Components Index, as measured over a specific performance period. The maximum number of performance units that may vest based on performance is two times the shares granted. Further, if the Company's total shareholder return is negative, the performance units may not vest at all. The following table summarizes the activity related to performance unit awards (PSU) share based payment awards:
|  | Number of Shares |  |  | Weighted- Average Grant-Date Fair Value |
Unvested, January 1, 2019 |  |  | 52,730 |  |  | $ | 86.43 |
Granted |  |  | 25,746 |  |  |  | 198.72 |
Vested |  |  | (40,695 | ) |  |  | 59.09 |
Unvested, December 31, 2019 |  |  | 37,781 |  |  | $ | 134.97 |
During the years ended December 31, 2019, 2018 and 2017, the Company granted 10,096, 40,601 and 24,664 performance units, respectively, of which 5,050, 6,022 and 7,817 units, respectively, are subject to performance-based vesting requirements and 5,046, 6,025 and 7,821 units, respectively, are subject to market-based vesting requirements, and will vest over the terms described below. During the years ended December 31, 2019, 2018 and 2017, there were also 15,650, 28,554 and 9,026 incremental performance-based shares, respectively, that vested resulting from an increased vesting factor based on Company performance. The weighted average grant date fair value of the performance unit awards granted was $198.72, $119.62 and $105.65 during the years ended December 31, 2019, 2018 and 2017, respectively, as determined by the Company’s common stock on date of grant for the units with performance-based vesting and a Monte-Carlo simulation for the units with market-based vesting. For the years ended December 31, 2019, 2018 and 2017, the Company recorded, as compensation charges related to all performance stock units, selling, general and administrative expense of $1.7 million, $1.3 million and $1.2 million, respectively, cost of sales of $208,000, $141,000 and $119,000, respectively, and research and development expense of $419,000, $330,000 and $276,000, respectively. In connection with the vesting of performance units during the years ended December 31, 2019, 2018 and 2017, 16,668, 25,208 and 19,217 shares, respectively, with aggregate fair values of $2.6 million, $2.9 million and $1.6 million, respectively, were withheld in satisfaction of tax withholding obligations and are reflected as a financing activity within the Consolidated Statements of Cash Flows. As of December 31, 2019, the total unrecognized compensation expense related to performance unit awards was $2.7 million, which the Company expects to recognize over a weighted average period of 1.87 years. Employee Stock Purchase Plan On April 7, 2009, the Board of Directors of the Company adopted an Employee Stock Purchase Plan (ESPP). The ESPP was approved by the Company’s shareholders and became effective on June 25, 2009. The Company has reserved 1,000,000 shares of common stock for issuance under the ESPP. Unless terminated sooner by the Board of Directors, the ESPP will expire when all reserved shares have been issued. Eligible employees may elect to contribute to the ESPP through payroll deductions during consecutive three-month purchase periods, the first of which began on July 1, 2009. Each employee who elects to participate will be deemed to have been granted an option to purchase shares of the Company’s common stock on the first day of the purchase period. Unless the employee opts out during the purchase period, the option will automatically be exercised on the last day of the period, which is the purchase date, based on the employee’s accumulated contributions to the ESPP. The purchase price will equal 85% of the lesser of the closing price per share of common stock on the first day of the period or the last business day of the period. Employees may allocate up to 10% of their base compensation to purchase shares of common stock under the ESPP; however, each employee may purchase no more than 12,500 shares on a given purchase date, and no employee may purchase more than $25,000 of common stock under the ESPP during a given calendar year. For the years ended December 31, 2019, 2018 and 2017, the Company issued 7,492, 10,303 and 9,730 shares, respectively, of its common stock under the ESPP, resulting in proceeds of $889,000, $798,000 and $734,000, respectively. For the years ended December 31, 2019, 2018 and 2017, the Company recorded charges of $79,000, $82,000 and $69,000, respectively, to selling, general and administrative expense, $73,000, $81,000, $46,000, respectively, to cost of sales and $118,000, $130,000 and $94,000, respectively, to research and development expense, related to the ESPP equal to the amount of the discount and the value of the look-back feature.

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