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Stock-Based Compensation | 9 Months Ended
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Oct. 01, 2011
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | Note 7 – Stock-Based Compensation The Company has various stockholder-approved programs which allow for the grant of stock-based compensation to officers, employees, and non-employee directors. The amount of compensation cost related to stock-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Company determines compensation cost for restricted stock units (“RSUs”), phantom stock units, and restricted stock based on the grant-date fair value of the underlying common stock. Compensation cost is recognized over the period that an officer, employee, or non-employee director provides service in exchange for the award. The following table summarizes stock-based compensation expense recognized (in thousands):
|  | Fiscal quarters ended |  |  | Nine fiscal months ended |
|  | October 1, 2011 |  |  | October 2, 2010 |  |  | October 1, 2011 |  |  | October 2, 2010 |
Stock options |  | $ | 14 |  |  | $ | 168 |  |  | $ | (111 | ) |  | $ | 522 |
Restricted stock units |  |  | 1,356 |  |  |  | 512 |  |  |  | 5,995 |  |  |  | 1,324 |
Phantom stock units |  |  | - |  |  |  | - |  |  |  | 222 |  |  |  | 175 |
Total |  | $ | 1,370 |  |  | $ | 680 |  |  | $ | 6,106 |  |  | $ | 2,021 |
Stock-based compensation expense for the fiscal quarter and nine fiscal months ended October 1, 2011, as presented in the table above, includes amounts associated with the acceleration of vesting of awards upon the resignation of Vishay’s Chief Financial Officer, Dr. Lior Yahalomi. The associated expense is reported as a component of the executive compensation charge reported in the accompanying consolidated condensed statement of operations. In accordance with Dr. Yahalomi’s employment agreement, 18,438 RSUs held by Dr. Yahalomi immediately vested upon his resignation and 55,316 RSUs with performance-based vesting criteria will vest upon the Company’s achievement of the performance-based criteria. Additionally, the vesting of 29,459 unvested stock options held by Dr. Yahalomi was accelerated. These options may be exercised by Dr. Yahalomi within one year from his resignation. Stock-based compensation expense for the nine fiscal months ended October 1, 2011, as presented in the table above, also includes amounts associated with the acceleration of vesting of awards upon the death of Vishay’s Executive Chairman of the Board of Directors, Dr. Felix Zandman. The associated expense is reported as a component of the executive compensation charge reported in the accompanying consolidated condensed statement of operations. In accordance with Dr. Zandman’s employment agreement, 98,375 RSUs held by Dr. Zandman immediately vested and were contributed to his estate upon his death and 202,330 RSUs with performance-based vesting criteria will be contributed to his estate upon the Company’s achievement of the performance-based criteria. Additionally, the vesting of 77,334 unvested stock options held by Dr. Zandman at the time of his death was accelerated. These options may be exercised by Dr. Zandman’s estate within one year from his death pursuant to the Company’s 2007 Stock Incentive Program (as amended, the “2007 Program”). The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at October 1, 2011 (dollars in thousands, amortization periods in years):
|  | Unrecognized Compensation Cost |  |  | Weighted Average Remaining Amortization Periods |
Stock options |  | $ | 120 |  |  |  | 1.3 |
Restricted stock units |  |  | 5,162 |  |  |  | 1.7 |
Phantom stock units |  |  | - |  |  |  | 0.0 |
Total |  | $ | 5,282 |  |  |  |  |
21 2007 Stock Incentive Plan The Company’s 2007 Program permits the grant of up to 3,000,000 shares of restricted stock, unrestricted stock, RSUs, and stock options, to officers, employees, and non-employee directors. Such instruments are available for grant until May 22, 2017. The 2007 Program was originally approved by stockholders of the Company on May 22, 2007, as the “2007 Stock Option Program.” On May 28, 2008, the Company’s stockholders approved amendments to the 2007 Stock Option Program, which was then renamed the “2007 Stock Incentive Program.” On February 23, 2011, the Board of Directors of the Company amended and restated the 2007 Program. The amendment eliminated share recycling, so that on the exercise of an option where the exercise price is paid via the tender of previously-owned shares or pursuant to an “immaculate cashless exercise,” the total “gross” number of option shares exercised is removed from the pool of shares available for future issuance. Similarly, shares withheld to pay income taxes in connection with the exercise of an option are also removed from the pool. The amendment also restricts re-pricing and cash repurchases of options without the prior approval of stockholders. Stock Options In addition to stock options outstanding pursuant to the 2007 Program, the Company has stock options outstanding under previous stockholder-approved stock option programs. These programs are more fully described in Note 12 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2010. No additional options may be granted pursuant to these programs. Option activity under the stock option plans as of October 1, 2011 and changes during the nine fiscal months then ended are presented below (number of options in thousands, contractual life in years):
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |
Outstanding: |  |  |  |  |  |  |  |  |
January 1, 2011 |  |  | 1,254 |  |  | $ | 15.04 |  |  |  |
Granted |  |  | - |  |  |  | - |  |  |  |
Exercised |  |  | (651 | ) |  |  | 14.87 |  |  |  |
Cancelled or forfeited |  |  | (219 | ) |  |  | 14.92 |  |  |  |
Outstanding at October 1, 2011 |  |  | 384 |  |  | $ | 15.40 |  |  |  | 2.07 |
Vested and expected to vest |  |  |  |  |  |  |  |  |  |  |  |
at October 1, 2011 |  |  | 384 |  |  | $ | 15.40 |  |  |  | 2.07 |
Exercisable at October 1, 2011 |  |  | 323 |  |  | $ | 15.33 |  |  |  | 1.99 |
During the nine fiscal months ended October 1, 2011, 192,000 options vested. At October 1, 2011, there are 61,000 unvested options outstanding, with a weighted average grant-date fair value of $9.96 per option. The pretax aggregate intrinsic value (the difference between the closing stock price on the last trading day of the third fiscal quarter of 2011 of $8.36 per share and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on October 1, 2011 is $11,000. This amount changes based on changes in the market value of the Company’s common stock. During the nine fiscal months ended October 1, 2011, 651,000 options were exercised. The total intrinsic value of options exercised during the nine fiscal months ended October 1, 2011 was approximately $1,693,000. 22 Restricted Stock Units RSU activity under the 2007 Program as of October 1, 2011 and changes during the nine fiscal months then ended are presented below (number of RSUs in thousands):
|  | Number of RSUs |  |  | Weighted Average grant date fair value per unit |
Outstanding: |  |  |  |  |  |
January 1, 2011 |  |  | 634 |  |  | $ | 9.61 |
Granted |  |  | 423 |  |  |  | 16.57 |
Vested* |  |  | (145 | ) |  |  | 11.20 |
Cancelled or forfeited |  |  | - |  |  |  | - |
Outstanding at October 1, 2011 |  |  | 912 |  |  | $ | 12.59 |
Expected to vest at October 1, 2011 |  |  | 912 |  |  |  |  |
____________________________ * The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements. The Company recognizes compensation cost for RSUs that are expected to vest. The Company expects all performance-based vesting criteria to be achieved. RSUs with performance-based vesting criteria are expected to vest as follows (number of RSUs in thousands):
|  | Vesting Date |  | Number of RSUs |
|  | January 1, 2013 |  | 324 |
|  | January 1, 2014 |  | 233 |
Phantom Stock Plan The Company maintains a phantom stock plan for certain senior executives. The Phantom Stock Plan authorizes the grant of up to 300,000 phantom stock units to the extent provided for in employment agreements with the Company. Following the completion of the spin-off of VPG in 2010 and the passing of Dr. Zandman in the second fiscal quarter of 2011, the Company has such employment arrangements with two of its executives. The arrangements provide for an annual grant of 5,000 shares of phantom stock to each of these executives on the first trading day of the year. If the Company later enters into other employment arrangements with other individuals that provide for the granting of phantom stock, those individuals also will be eligible for grants under the Phantom Stock Plan. No grants may be made under the Phantom Stock Plan other than under the terms of employment arrangements with the Company. Each phantom stock unit entitles the recipient to receive a share of common stock at the individual’s termination of employment or any other future date specified in the employment agreement. The phantom stock units are fully vested at all times. In accordance with the Phantom Stock Plan, following Dr. Zandman’s passing, 43,667 phantom stock units held by Dr. Zandman’s estate were redeemed as common stock. Phantom stock units activity under the 2007 Program as of October 1, 2011 and changes during the nine fiscal months then ended are presented below (number of phantom stock units in thousands):
|  | Number of units |  |  | Grant date fair value per unit |
Outstanding: |  |  |  |  |  |
January 1, 2011 |  |  | 116 |  |  |  |
Granted |  |  | 15 |  |  | $ | 14.78 |
Redeemed for common stock |  |  | (44 | ) |  |  |  |
Outstanding at October 1, 2011 |  |  | 87 |  |  |  |  |

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- 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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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