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SHAREHOLDERS' EQUITY | 12 Months Ended
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Dec. 31, 2017
Stockholders' Equity Note [Abstract] |
SHAREHOLDERS' EQUITY | NOTE 16 - SHAREHOLDERS’ EQUITY
| A. | Description of Ordinary Shares
As of December 31, 2017, Tower had 150 million authorized ordinary shares, par value NIS 15.00 each, of which approximately 98 million were issued and outstanding. Holders of ordinary shares are entitled to participate equally in the payment of cash dividends and bonus share (stock dividend) distributions and, in the event of the liquidation of Tower, in the distribution of assets after satisfaction of liabilities to creditors. Each ordinary share is entitled to one vote on all matters to be voted on by shareholders.
| B. | Equity Incentive Plans
| (1) | General
The Company has granted to its employees and directors options and Restricted Stock Units (“RSUs”) to purchase ordinary shares under several share incentive plans adopted by the Company. The particular provisions of each plan and grant vary as to vesting period, exercise price, exercise period and other terms. Generally, (i) the exercise price of options will not be lower than the nominal value of the shares and will equal either the closing market price of the ordinary shares immediately prior to the date of grant, or in relation to grants made from September 2013, an average of the closing price during the thirty trading days immediately prior to the date of grant; (ii) vest over one to four year period according to various vesting schedules, and (iii) are not exercisable beyond seven or ten years from the grant date. Except for those share incentive plans described below, as of December 31, 2017 and December 31, 2016, respectively, there were approximately 57 thousands and 640 thousands options outstanding under the Company’s share incentive plans (the "Old Plans”). No further options may be granted under Old Plans.
| (2) | Tower’s 2013 Share Incentive Plan (the "2013 Plan")
In 2013, the Company adopted a new share incentive plan for directors, officers, and employees of the Company. Options granted under the 2013 Plan bear an exercise price which equals an average of the closing price during the thirty trading days immediately prior to the date of grant, vest over up to a three-year period and are not exercisable beyond seven years from the grant date. Under the 2013 Plan, the Company granted in 2017 and 2016 a total of 819 thousands and 568 thousands options and RSUs, respectively, to its employees and directors (including the below described grants to the CEO and Chairman) vesting over up to a three-year period. The Company measures compensation expenses of the RSUs based on the closing market price of the ordinary shares immediately prior to the date of grant and is amortizing it through the applicable vesting period. In June 2017, the Company’s shareholders approved the following equity awards to the Company’s CEO, chairman of the Board and board directors under the 2013 Share Incentive Plan: (i) 85 thousands time vested RSUs and 97 thousands performance-based RSUs to the CEO, for a total compensation value of $4,500; (ii) 12 thousands time vested RSUs to the chairman of the board of directors for a total compensation value of $300; and (iii) 3 thousands time vested RSUs to each of the members of the board of directors (other than to the Chairman and the CEO), for a total compensation value of $600. In June 2016, the Company’s shareholders approved the following equity awards to the Company’s CEO, chairman of the board and board directors under the 2013 Share Incentive Plan: (i) 198 thousands options, 31 thousands time vested RSUs and 16 thousands performance-based RSUs to the CEO, for a total compensation value of $1,360; (ii) 25 thousands time vested RSUs to the chairman of the board of directors for a total compensation value of $300; and (iii) 10 thousands options to a new external director and 3 thousands time vested RSUs to each of two new other directors, for a total compensation value of $127. As of December 31, 2017, approximately 523 thousands options and 1,246 thousands RSUs were outstanding under the 2013 Plan. As of December 31, 2016, approximately 1,635 thousands options and 1,009 thousands RSUs were outstanding under the 2013 Plan. Further grants may be approved subject to compensation committee, board of directors and shareholders’ approval as may be required by law.
| (3) | Summary of the Status of all the Company’s Employees’ and Directors’ Share Incentive Plans
i. Share Options awards:
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | Number of share options |  |  | Weighted average exercise price |  |  | Number of share options |  |  | Weighted average exercise price |  |  | Number of share options |  |  | Weighted average exercise price |
Outstanding as of beginning of year |  |  | 2,278,089 |  |  | $ | 9.92 |  |  |  | 5,878,270 |  |  | $ | 6.84 |  |  |  | 7,537,219 |  |  | $ | 6.37 |
Granted |  |  | -- |  |  |  | 0.00 |  |  |  | 207,890 |  |  |  | 12.19 |  |  |  | 100,000 |  |  |  | 16.92 |
Exercised |  |  | (1,611,489 | ) |  |  | 9.27 |  |  |  | (3,649,754 | ) |  |  | 4.82 |  |  |  | (1,620,056 | ) |  |  | 4.94 |
Terminated |  |  | (77,292 | ) |  |  | 25.89 |  |  |  | (97,063 | ) |  |  | 21.34 |  |  |  | (26,777 | ) |  |  | 22.28 |
Forfeited |  |  | (9,123 | ) |  |  | 8.06 |  |  |  | (61,254 | ) |  |  | 7.25 |  |  |  | (112,116 | ) |  |  | 8.30 |
Outstanding as of end of year |  |  | 580,185 |  |  |  | 9.64 |  |  |  | 2,278,089 |  |  |  | 9.92 |  |  |  | 5,878,270 |  |  |  | 6.84 |
Options exercisable as of end of year |  |  | 459,662 |  |  | $ | 8.51 |  |  |  | 1,606,983 |  |  | $ | 10.19 |  |  |  | 2,606,704 |  |  | $ | 8.93 |
ii. RSU awards:
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | Number of RSU |  |  | Weighted Average Fair Value |  |  | Number of RSU |  |  | Weighted Average Fair Value |  |  | Number of RSU |  |  | Weighted Average Fair Value |
Outstanding as of beginning of year |  |  | 1,009,184 |  |  | $ | 14.62 |  |  |  | 773,200 |  |  | $ | 15.11 |  |  |  | -- |  |  | $ | -- |
Granted |  |  | 818,856 |  |  |  | 24.88 |  |  |  | 359,643 |  |  |  | 12.83 |  |  |  | 783,700 |  |  |  | 15.11 |
Exercised |  |  | (553,241 | ) |  |  | 14.71 |  |  |  | (86,847 | ) |  |  | 11.45 |  |  |  | -- |  |  |  | -- |
Forfeited |  |  | (28,910 | ) |  |  | 16.42 |  |  |  | (36,812 | ) |  |  | 14.73 |  |  |  | (10,500 | ) |  |  | 15.15 |
Outstanding as of end of year |  |  | 1,245,889 |  |  |  | 21.29 |  |  |  | 1,009,184 |  |  |  | 14.62 |  |  |  | 773,200 |  |  |  | 15.11 |
RSU exercisable as of end of year |  |  | -- |  |  | $ | -- |  |  |  | -- |  |  | $ | -- |  |  |  | -- |  |  | $ | -- |
| (4) | Summary of Information about Employees’ Share Incentive Plans
The following table summarizes information about employees’ share options outstanding as of December 31, 2017:
Outstanding as of December 31, 2017 |  |  | Exercisable as of December 31, 2017 |
Range of exercise prices |  |  | Number outstanding |  |  | Weighted average remaining contractual life (in years) |  |  | Weighted average exercise price |  |  | Number exercisable |  |  | Weighted average exercise price |
$ | 4.42-21.30 |  |  |  | 580,185 |  |  |  | 3.79 |  |  | $ | 9.64 |  |  |  | 459,662 |  |  | $ | 8.51 |
|  | Year ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
The intrinsic value of options exercised |  | $ | 26,031 |  |  | $ | 40,314 |  |  | $ | 15,374 |
The original fair value of options exercised |  | $ | 7,202 |  |  | $ | 16,711 |  |  | $ | 3,721 |
|  | Year ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
The intrinsic value of RSU's exercised |  | $ | 12,996 |  |  | $ | 1,177 |  |  | $ | -- |
The original fair value of RSU's exercised |  | $ | 8,138 |  |  | $ | 994 |  |  | $ | -- |
Stock-based compensation expenses were recognized in the Statement of Operations as follows:
|  | Year ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Cost of goods |  | $ | 3,084 |  |  | $ | 3,920 |  |  | $ | 2,214 |
Research and development, net |  |  | 2,555 |  |  |  | 2,119 |  |  |  | 1,905 |
Marketing, general and administrative |  |  | 6,010 |  |  |  | 3,367 |  |  |  | 3,421 |
Total stock-based compensation expense |  | $ | 11,649 |  |  | $ | 9,406 |  |  | $ | 7,540 |
| (5) | Weighted Average Grant-Date Fair Value of Options Granted to Employees
The weighted average grant-date fair value of the options granted during 2016 and 2015 to employees and directors amounted to $4.20 and $7.16 per option, respectively (no options were granted in 2017). The Company utilizes the Black-Scholes model. The Company estimated the fair value, utilizing the following assumptions for the years 2016 and 2015 (all in weighted averages):
|  | 2016 |  |  | 2015 |
Risk-free interest rate |  |  | 0.9%-1.3% |  |  |  | 1.2%-1.4% |
Expected life of options |  | 4.60 years |  |  | 4.75 years |
Expected annual volatility |  |  | 47%-48% |  |  |  | 47% |
Expected dividend yield |  | none |  |  | none |
Risk free interest rate is based on yield curve rates published by the U.S. Department of Treasury. Expected life of options is based upon historical experience and represents the period of time that options granted are expected to be outstanding. Expected annual volatility is based on the volatility of Tower’s ordinary share prior to the options grant for the term identical to expected life.
| C. | Israeli Banks’ Capital Notes and Warrants
All issued and outstanding equity equivalent capital notes convertible into approximately 1.2 million ordinary shares as of December 31, 2017, have no voting rights, no maturity date, no dividend rights, are not tradable, are not registered, do not carry interest, are not linked to any index and are not redeemable. The equity equivalent capital notes are classified in shareholders’ equity. As of December 31, 2017, Bank Ha’poalim was the sole holder of such capital notes. As of December 31, 2017 and 2016, the Israeli Banks held a total of approximately 0.5 million warrants exercisable until December 2018, at various exercise prices ranging between $10.5 and $92.55 per share.
| D. | Treasury Stock
During 1999 and 1998, the Company funded the purchase by a trustee of an aggregate of 86,667 of Tower’s ordinary shares. These shares are classified as treasury shares.
| E. | Dividend Restriction
Tower is subject to the restrictions under the Israeli Companies Law, 1999. In addition, Tower is subject to limitations under Series G Debentures indenture, which enables to distribute dividends subject to satisfying certain financial ratios.
| F. | Warrants Series 9
As of December 31, 2016, the Company had Warrants Series 9, which were issued in 2013 and exercisable into approximately 2.3 million ordinary shares until July 2017. All of these warrants were exercised into shares during 2017.
| G. | Convertible Debentures
With regard to convertible debentures, see Note 11C.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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