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Shareholders' Equity
 12 Months Ended
Dec. 31, 2015
Stockholders' Equity Note [Abstract]  
Shareholders' Equity
Note 11 - Shareholders' Equity
 
Share based compensation
 
 
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.
 
On October 21, 2013 the Board resolved to adopt the Global Share Incentive Plan (2013) (the "2013 Plan") and to reserve up to 500,000 ordinary shares for issuance under the 2013 Plan to employees, directors, officers and consultants of the Company or of any subsidiary or affiliate of the Company. Grants under the 2013 Plan, whether as options, restricted stock units, restricted stock or other equity based awards, including their terms, are subject to the Board of Directors' approval. 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 (and under certain circumstances certain other officers) will also have to be approved by the Shareholders.
 
 
B.
Options or RSUs 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. Capital gains on awards granted under the plans are subjected to tax of 25% to be paid by the employee, and the Company is not entitled to a tax deduction. Gains which are not capital gains on awards under the plans are subjected to regular tax rates on individuals, and the Company is entitled to a tax deduction for such gains.
 
 
C.
During 2014 and 2015, the Company granted 74,000 and 8,000 RSUs respectively to certain of its directors, employees and consultants under the 2013 Plan. In relation to those grants:
 
 
1.
The vesting period of the RSUs ranges between 2 to 3 years from the date of grant.
 
 
2.
The fair value of RSUs is estimated based on the market value of the Company’s stock on the date of grant, less an estimate of dividends that will not accrue to RSUs holders prior to vesting.
 
 
3.
The Company recognizes compensation expenses on these RSUs based on estimated grant date fair value, with the following assumptions:
 
   
2014
    
2015
  
Expected dividend yield
     2.06%       3.22%  
Termination rate
     4.35%       0%  
 
 
D.
On July 28, 2015, the Company granted, in the aggregate, 89,907 options to certain of its directors and employees under the 2013 Plan.  In relation to this grant:
 
 
1.
The exercise price for the options (per ordinary share) was US$ 26.91 and the Option expiration date was the earlier to occur of: (a) July 28, 2023; and (b) the closing price of the shares falling below US$ 13.46 at any time after the date of grant. The options vest and become exercisable on the second anniversary of the date of 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)
     2.08%  
Expected dividend yield
     2.09%  
Average expected volatility  (b)
     53.01%  
Termination rate
     9%  
Suboptimal rate (c)
     3.4%  
 
(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.
 

 
 
E.
The following table summarizes information regarding stock options as at December 31, 2015:
 
     
Options outstanding
    
Options exercisable
  
           
Weighted average
          
Weighted average
  
           
remaining
          
remaining
  
Exercise price
    
Number
    
contractual life
    
Number
    
contractual life
  
US$
    
of options
    
(in years)
    
of options
    
(in years)
  
                           
15.28       129,044       4.7       129,044       4.7  
                                   
26.91       85,657       7.6       -       -  
                                   
        214,701               129,044          
 
The aggregate intrinsic value of options outstanding as of December 31, 2014 and 2015 is US$ 3,825 thousand and US$ 2,229 thousand, respectively.
The aggregate intrinsic value of options exercisable as of December 31, 2014 and 2015 is US$ 1,556 thousand and US$ 1,938 thousand, respectively.
The total intrinsic value of options exercised during the year ended December 31, 2014 and 2015, is US$ 2,400 thousand and US$ 1,785 thousand, respectively.
The intrinsic value of the options at the date of grant is zero.
 
 
F.
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, 2013
     413,087              
                     
Exercised
     (132,587 )     14.28       6.61  
Forfeited
     (7,750 )     15.28       6.54  
                         
Balance at December 31, 2013
     272,750                  
                         
Exercised
     (78,620 )     17.19       7.70  
Forfeited
     (2,000 )     15.28       6.54  
                         
Balance at December 31, 2014
     192,130                  
                         
Granted
     89,907       26.91       10.04  
Exercised
     (61,711 )     15.28       6.54  
Forfeited
     (5,625 )     24.07       9.19  
                         
Balance at December 31, 2015
     214,701                  
Exercisable at December 31, 2015
     129,044                  
 
 
 
G.
The Restricted Share Units activity under the abovementioned plans is as follows:
             
         
Weighted
  
   
Number of
    
average
  
   
Restricted
    
grant date
  
   
Share Units
    
fair value
  
   
US$
    
US$
  
             
Balance at January 1, 2014
     -        
               
Granted
     74,000       46.07  
                 
Balance at  December 31, 2014
     74,000          
                 
Granted
     8,000       29.09  
Vested
     (4,000 )     46.07  
                 
Balance at December 31, 2015
     78,000          
 
The aggregate intrinsic value of RSUs outstanding as of December 31, 2014 and December 31, 2015 is US$ 2,604 thousand and US$ 2,363 thousand, respectively.
The aggregate intrinsic value of RSUs vested as of December 31, 2015 is US$ 117 thousand.
 
H.            During 2013, 2014 and 2015, the Company recorded share-based compensation expenses. The following summarizes the allocation of the stock-based compensation expenses:
 
   
Year ended December 31
  
   
2013
    
2014
    
2015
  
   
US$ thousands
    
US$ thousands
    
US$ thousands
  
                   
Cost of sales
     103       124       150  
Research and development costs
     193       340       455  
Selling and marketing expenses
     177       366       502  
General and administrative expenses
     195       436       806  
                         
      668       1,266       1,913  
 
As of December 31, 2015, there were US$ 1,553 thousand of unrecognized compensation costs related to outstanding stock options and RSUs to be recognized over a weighted average period of 1.34 years.