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Shareholders' Equity | 12 Months Ended
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Dec. 31, 2012
Shareholders' Equity [Abstract] |
Shareholders' Equity | Note 9 - Shareholders' Equity Stock options to employees and directors
| A. | On July 21, 2004, the Board resolved, subject to shareholders' approval that was given on December 30, 2004, to adopt the Share Option Plan (2004) (the "2004 Plan"). Option grants to employees under the 2004 Plan, including terms of vesting and the exercise price, are subject to the Board of Directors' approval. Option grants to directors and certain other officers are generally subject to the approvals of the Compensation Committee as well as Board of Directors, and grants to directors or a CEO will also generally have to be approved by the Shareholders. The term of the options shall not exceed 10 years from the date that the option was granted.
The 2004 plan initially covered up to 282,750 options and subsequent to an amendment by the board in 2007 it covered up to 582,750 options. In August 2012, the Board of Directors increased the number of the ordinary shares available for issuance under the 2004 plan by an additional 500,000. All options are at a conversion rate of 1:1.
| B. | No options have been granted by the Company other than to employees and directors, as mentioned above.
| C. | Options granted to Israeli residents may be granted under Section 102 of the Israeli Income Tax Ordinance pursuant to which the awards of options, or the ordinary shares issued upon their exercise, must be deposited with a trustee for at least two years following the date of grant. Under Section 102, any tax payable by an employee from the grant or exercise of the awards is deferred until the transfer of the awards or ordinary shares by the trustee to the employee or upon the sale of the awards or ordinary shares. Gains on awards granted under the plan are subjected to capital gains tax of 25% to be paid by the employee, and the Company is not entitled to a tax deduction.
| D. | On October 15, 2008, the Company granted, in the aggregate, 200,000 options to certain of its directors and employees under the 2004 Plan. In relation to this grant:
| 1. | The exercise price for the options (per ordinary share) was US$ 3.82 and the option expiration date was the earlier to occur of: (a) October 15, 2016; and (b) the closing price of the shares falling below US$ 1.91 at any time after the date of grant. 50% of the options vest and become exercisable on the second anniversary of the date of grant and the additional 50% of the options vest and become exercisable on the third anniversary of the date of the grant.
| 2. | The Company recognizes compensation expenses on these options based on estimated grant date fair value using the Monte Carlo option-pricing model with the following assumptions:
Average Risk-free interest rate (a) | 3.73%
Expected dividend yield | 0.0%
Average expected volatility (b) | 112.42%
Termination rate | 11%
Suboptimal rate (c) | 3.45
| (a) | Risk-free interest rate represents risk free US$ zero-coupon US Government Bonds at time of grant.
| (b) | Expected average volatility represents a weighted average standard deviation rate for the price of the Company's ordinary shares on the NASDAQ National Market.
| (c) | Suboptimal rate represents the multiple of the increase in the market share price on the day of grant of the option which, should it come to pass, will lead to exercise of the option by the employee. It is the average suboptimal rate of the Company and similar companies.
| 3. | No expenses were incurred during the year ended December 31, 2012 in relation to this grant. As at December 31, 2012, all expenses related to this grant were recognized.
| E. | On December 21, 2010, the Company granted, in the aggregate, 137,500 options to certain of its directors and employees under the 2004 Plan. In relation to this grant:
| 1. | The exercise price for the options (per ordinary share) was US$ 18.82 and the Option expiration date was the earlier to occur of: (a) December 21, 2018; and (b) the closing price of the shares falling below US$ 9.41 at any time after the date of grant. 50% of the options vest and become exercisable on the second anniversary of the date of grant and the additional 50% of the options vest and become exercisable on the third anniversary of the date of the grant.
| 2. | The Company recognizes compensation expenses on these options based on estimated grant date fair value using the Binomial option-pricing model with the following assumptions:
Average Risk-free interest rate (a) | 3.00%
Expected dividend yield | 0.0%
Average expected volatility (b) | 82.64%
Termination rate | 9%
Suboptimal rate (c) | 3.45
| (a) | Risk-free interest rate represents risk free US$ zero-coupon US Government Bonds at time of grant.
| (b) | Expected average volatility represents a weighted average standard deviation rate for the price of the Company's ordinary shares on the NASDAQ National Market.
| (c) | Suboptimal rate represents the multiple of the increase in the market share price on the day of grant of the option which, should it come to pass, will lead to exercise of the option by the employee. It is the average suboptimal rate of the Company and similar companies.
| 3. | Compensation expenses incurred during the year ended December 31, 2012 in relation to this grant were approximately US$ 389 thousand. As at December 31, 2012, there was approximately US$ 149 thousand of unrecognized compensation costs related to this grant to be recognized over a weighted average period of 0.98 years.
| F. | On September 13, 2012, the Company granted, in the aggregate, 240,000 options to certain of its directors and employees under the 2004 Plan. In relation to this grant:
| 1. | The exercise price for the options (per ordinary share) was US$ 15.28 and the Option expiration date was the earlier to occur of: (a) September 13, 2020; and (b) the closing price of the shares falling below US$ 7.64 at any time after the date of grant. 50% of the options vest and become exercisable on the second anniversary of the date of grant and the additional 50% of the options vest and become exercisable on the third anniversary of the date of the grant.
| 2. | The Company recognizes compensation expenses on these options based on estimated grant date fair value using the Binomial option-pricing model with the following assumptions:
Average Risk-free interest rate (a) | 1.33 %
Expected dividend yield | 0.0%
Average expected volatility (b) | 64.71 %
Termination rate | 9%
Suboptimal rate (c) | 3.2
| (a) | Risk-free interest rate represents risk free US$ zero-coupon US Government Bonds at time of grant.
| (b) | Expected average volatility represents a weighted average standard deviation rate for the price of the Company's ordinary shares on the NASDAQ National Market.
| (c) | Suboptimal rate represents the multiple of the increase in the market share price on the day of grant of the option which, should it come to pass, will lead to exercise of the option by the employee. It is the average suboptimal rate of the Company and similar companies.
| 3. | Compensation expenses incurred during the year ended December 31, 2012 in relation to this grant were approximately US$ 155 thousand. As at December 31, 2012, there was approximately US$ 1,084 thousand of unrecognized compensation costs related to this grant to be recognized over a weighted average period of 2.21 years.
| G. | The following table summarizes information regarding stock options as at December 31, 2012:
|  |  | Options outstanding |  |  | Options exercisable |
|  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  |  | average remaining |  |  |  |  |  | average remaining |
Exercise price |  |  | Number |  |  | contractual life |  |  | Number |  |  | contractual life |
US$ |  |  | of options |  |  | (in years) |  |  | of options |  |  | (in years) |
3.82 |  |  |  | 40,087 |  |  |  | 3.79 |  |  |  | 40,087 |  |  |  | 3.79 |
18.82 |  |  |  | 135,000 |  |  |  | 5.97 |  |  |  | 67,500 |  |  |  | 5.97 |
15.28 |  |  |  | 238,000 |  |  |  | 7.70 |  |  |  | - |  |  |  | - |
|  |  |  | 413,087 |  |  |  |  |  |  |  | 107,587 |  |  |  |  |
The aggregate intrinsic value of options outstanding as of December 31, 2011 and 2012 is US$ 1,718 thousand and US$ 1,199 thousand, respectively. The aggregate intrinsic value of options exercisable as of December 31, 2011 and 2012 is US$ 1,718 thousand and US$ 566 thousand, respectively. The total intrinsic value of options exercised during the year ended December 31, 2011 and 2012, is US$ 609 thousand and US$ 1,191 thousand, respectively. The intrinsic value of the options at the date of grant is zero. H. The stock option activity under the abovementioned plans is as follows:
|  |  |  |  |  |  |  | Weighted |
|  |  |  |  | Weighted |  |  | average |
|  | Number |  |  | average |  |  | grant date |
|  | of options |  |  | exercise price |  |  | fair value |
|  |  |  |  | US$ |  |  | US$ |
Balance at January 1, 2010 |  |  | 240,700 |  |  |  |  |  |  |
Granted |  |  | 137,500 |  |  |  | 18.82 |  |  |  | 8.69 |
Exercised |  |  | (70,375 | ) |  |  | 3.68 |  |  |  | 1.81 |
Forfeited |  |  | (2,000 | ) |  |  | 3.82 |  |  |  | 1.81 |
Balance at December 31, 2010 |  |  | 305,825 |  |  |  |  |  |  |  |  |
Exercised |  |  | (45,400 | ) |  |  | 3.62 |  |  |  | 1.75 |
Forfeited |  |  | (3,000 | ) |  |  | 16.32 |  |  |  | 7.54 |
Balance at December 31, 2011 |  |  | 257,425 |  |  |  |  |  |  |  |  |
Granted |  |  | 240,000 |  |  |  | 15.28 |  |  |  | 6.54 |
Exercised |  |  | (82,338 | ) |  |  | 3.35 |  |  |  | 1.81 |
Forfeited |  |  | (2,000 | ) |  |  | 15.28 |  |  |  | 6.54 |
Balance at December 31, 2012 |  |  | 413,087 |  |  |  |  |  |  |  |  |
Exercisable at December 31, 2012 |  |  | 107,587 |  |  |  |  |  |  |  |  |
| I. | During 2010, 2011 and 2012, the Company recorded share-based compensation expenses. The following summarizes the allocation of the stock-based compensation expenses:
|  | Year ended December 31 |
|  | 2010 |  |  | 2011 |  |  | 2012 |
|  | US$ thousands |  |  | US$ thousands |  |  | US$ thousands |
Cost of sales |  |  | 33 |  |  |  | 24 |  |  |  | 46 |
Research and development costs |  |  | 71 |  |  |  | 96 |  |  |  | 130 |
Selling and marketing expenses |  |  | 65 |  |  |  | 134 |  |  |  | 159 |
General and administrative expenses |  |  | 62 |  |  |  | 183 |  |  |  | 209 |
|  |  | 231 |  |  |  | 437 |  |  |  | 544 |

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- Definition The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 3 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 29, 30, 31 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB TOPIC 4.C) -URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 43 -Section B -Paragraph 7, 11A -Chapter 1 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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