XML 31 R19.htm IDEA: XBRL DOCUMENT
v3.20.2

Employee Benefit Plans and Stock-based Compensation | 6 Months Ended
--- | ---
Jun. 26, 2020
Share-based Payment Arrangement [Abstract] |
Employee Benefit Plans and Stock-based compensation | EMPLOYEE BENEFIT PLANS AND STOCK-BASED COMPENSATION Equity Award Plans The Company’s stock benefit plans include the 2002 Employee Stock Purchase Plan (“ESPP”) and current active stock plans adopted in 1995 and 2002. See Note 13, “Employee Benefit Plans and Stock-based Compensation” of Notes to Consolidated Financial Statements in the 2019 Form 10-K for details pertaining to each plan. As of June 26, 2020, there were 0.8 million and 2.8 million shares of common stock reserved for future grants under the Company’s ESPP and active stock plans, respectively. Stock Option Activities The following table summarizes the Company’s stock option activities and related information during the six months ended June 26, 2020 (in thousands, except per share amounts and terms):
|  | Stock Options Outstanding
|  | Number of Shares |  | Weighted Average Exercise Price Per Share |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Balance at December 31, 2019 |  | 1,888 |  |  | $ | 5.83 |  |  |  |  |
Exercised |  | (127 | ) |  | 5.78 |  |  |  |  |
Canceled or expired |  | (203 | ) |  | 5.78 |  |  |  |  |
Balance at June 26, 2020 |  | 1,558 |  |  | 5.84 |  |  | 1.68 |  | $ | 655.80 |
Vested and exercisable |  | 1,558 |  |  | 5.84 |  |  | 1.68 |  | $ | 655.80 |
The aggregate intrinsic value disclosed above represents the difference between the exercise price of the options and the fair value of the Company’s common stock. There were no employee stock options granted in the six months ended June 26, 2020. There were no realized tax benefits attributable to stock options exercised in jurisdictions where this expense is deductible for tax purposes for the six months ended June 26, 2020 and June 28, 2019, respectively. Restricted Stock Units (“RSUs”) Activities The following table summarizes the Company’s RSUs activities and related information during the six months ended June 26, 2020 (in thousands, except per share amounts):
|  | Restricted Stock Units Outstanding
|  | Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
Balance at December 31, 2019 |  | 3,601 |  |  | $ | 5.18 |
Granted |  | 2,797 |  |  | 5.85 |
Vested |  | (2,128 | ) |  | 5.42 |
Forfeited |  | (257 | ) |  | 3.89 |
Balance at June 26, 2020 |  | 4,013 |  |  | 5.60 |
Performance- and Market-based awards The Company settled a portion of its incentive bonus payments to eligible employees by issuing performance-based RSU awards (“PRSUs”) from the 1995 Stock Plan. The Company granted 472,247 shares of PRSUs to certain employees for the six months ended June 26, 2020, all of which were fully vested at the time of grant for the purpose of settling amounts earned under the Company’s 2019 incentive bonus plans. The stock-based compensation recognized for these PRSUs was $3.0 million for the six months ended June 26, 2020. There were no PRSUs issued for purposes of settling amounts earned under the Company's incentive plans in the six months ended June 28, 2019. In the first quarter of 2020, the Company granted 67,910 PRSUs to certain key executives that are expected to vest by the end of fiscal 2020. The vesting condition for these PRSUs include achievement of certain financial operating goals. The stock-based compensation recognized for all PRSUs which vest according to achievement of certain financial operating goals for the three and six months ended June 26, 2020 was $0.1 million and $0.4 million. The unrecognized stock-based compensation of the PRSUs as of June 26, 2020 was $0.2 million which includes $0.1 million of unrecognized expense from PRSUs granted in 2019. A total of 85,000 PRSUs were granted in 2019, out of which 40,000 shares have vested as of June 26, 2020. In the first quarter of 2020, the Company granted 182,830 market-based RSUs (“MRSUs”) under the 1995 Stock Plan to a key executive that is expected to vest during a three-year period. The vesting condition for the MRSUs include performance of the Company’s total shareholder return (“TSR”) relative to the TSR of the NASDAQ Telecommunication Index. The aggregate grant-date fair value of these shares was estimated to be $1.1 million using a Monte-Carlo simulation valuation method. The stock-based compensation recognized for all MRSUs for the three and six months ended June 26, 2020 was $0.2 million and $0.3 million. The unrecognized stock-based compensation of the MRSUs as of June 26, 2020 was $1.6 million which includes $0.6 million of unrecognized expense from MRSUs granted in 2019. None of these MRSUs had vested as of June 26, 2020. The stock-based compensation recognized for the MRSUs for the three and six months ended June 28, 2019 was $0.1 million. The unrecognized stock-based compensation of the MRSUs as of June 28, 2019 was $1.0 million. French Retirement Benefit Plan The Company assumed obligations under a defined benefit pension plan in connection with the acquisition of its French subsidiary in 2016. The plan is unfunded and there are no contributions required by laws or funding regulations, discretionary contributions or non-cash contributions expected to be made. The table below presents the components of net periodic benefit costs (in thousands):
| Three months ended |  | Six months ended
| June 26, 2020 |  | June 28, 2019 |  | June 26, 2020 |  | June 28, 2019
Service cost | $ | 61 |  |  | $ | 57 |  |  | $ | 122 |  |  | $ | 114 |
Interest cost | 9 |  |  | 19 |  |  | 18 |  |  | 39 |
Net periodic benefit cost | $ | 70 |  |  | $ | 76 |  |  | $ | 140 |  |  | $ | 153 |
The present value of the Company’s pension obligation as of June 26, 2020 was $5.4 million, of which $0.1 million was reported as a component of “Accrued and other current liabilities” and $5.3 million was reported as a component of “Other non-current liabilities” on the Company’s Condensed Consolidated Balance Sheets. The present value of the Company’s pension obligation as of December 31, 2019 was $5.3 million. 401(k) Plan The Company has a retirement/savings plan for its U.S. employees, which qualifies as a thrift plan under Section 401(k) of the Internal Revenue Code. This plan allows participants to contribute up to the applicable Internal Revenue Code limitations under the plan. The Company has made discretionary contributions to the plan of 25% of the first 4% contributed by eligible participants, up to a maximum contribution per participant of $1,000 per year. The contributions for the six months ended June 26, 2020 and June 28, 2019 were $203,000 and $208,000, respectively. Stock-based Compensation The following table summarizes stock-based compensation for all plans (in thousands):
| Three months ended |  | Six months ended
| June 26, 2020 |  | June 28, 2019 |  | June 26, 2020 |  | June 28, 2019
Stock-based compensation in: |  |  |  |  |  |  |
Cost of revenue | $ | 312 |  |  | $ | 195 |  |  | $ | 1,082 |  |  | $ | 420 |
Research and development expense | 872 |  |  | 582 |  |  | 2,610 |  |  | 1,198 |
Selling, general and administrative expense | 2,364 |  |  | 1,733 |  |  | 6,115 |  |  | 3,005 |
Total stock-based compensation in operating expense | 3,236 |  |  | 2,315 |  |  | 8,725 |  |  | 4,203 |
Total stock-based compensation | $ | 3,548 |  |  | $ | 2,510 |  |  | $ | 9,807 |  |  | $ | 4,623 |
As of June 26, 2020, total unrecognized stock-based compensation cost related to unvested RSUs was $19.9 million and is expected to be recognized over a weighted-average period of approximately 1.93 years. Valuation Assumptions The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model.
| ESPP Purchase Period Ending
| July 1, 2020 |  | July 1, 2019
Expected term (years) | 0.5 |  |  | 0.5 |
Volatility | 50 | % |  | 43 | %
Risk-free interest rate | 1.6 | % |  | 2.5 | %
Expected dividends | 0.0 | % |  | 0.0 | %
Estimated weighted average fair value per share at purchase date | $2.26 |  | $1.31
The expected term of the stock purchase rights under the ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate assumption is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future.

X
- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + 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 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_CompensationAndEmployeeBenefitPlansTextBlock
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