Stock-Based Compensation

9 Months Ended

Sep. 29, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 8 – 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:

	Fiscal quarters ended				Nine fiscal months ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Stock options	$	13	$	14	$	60	$	(111	)
Restricted stock units		1,128		1,356		3,396		5,995
Phantom stock units		-		-		93		222
Total	$	1,141	$	1,370	$	3,549	$	6,106

Stock-based compensation expense for the fiscal quarter and nine fiscal months ended October 1, 2011, as presented in the tables above, includes amounts associated with the acceleration of vesting of awards upon the resignation of Vishay’s former Chief Financial Officer, Dr. Lior Yahalomi. The associated expense is reported as a component of the executive compensation charges reported in the accompanying consolidated condensed statements 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.

Stock-based compensation expense for the nine fiscal months ended October 1, 2011, as presented in the tables above, also includes amounts associated with the acceleration of vesting of awards upon the passing of Vishay’s former Executive Chairman of the Board of Directors, Dr. Felix Zandman.  The associated expense is reported as a component of the executive compensation charges 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 following his passing 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 passing was accelerated.

The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at September 29, 2012 (amortization periods in years):

	Unrecognized Compensation Cost		Weighted Average Remaining Amortization Periods
Stock options	$	31		0.6
Restricted stock units		6,303		1.4
Phantom stock units		-		0.0
Total	$	6,334

2007 Stock Incentive Plan

The Company’s 2007 Stock Incentive Program (the “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.

Stock Options

In addition to stock options outstanding pursuant to the 2007 Program, during the periods presented, the Company had 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, 2011.  No additional options may be granted pursuant to these programs.

Option activity under the stock option plans as of September 29, 2012 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, 2012		384		$	15.40
Granted		-			-
Exercised		(22	)		7.89
Cancelled or forfeited		(253	)		16.12
Outstanding at September 29, 2012		109		$	15.24		4.49
Vested and expected to vest
at September 29, 2012		109		$	15.24		4.49
Exercisable at September 29, 2012		79		$	15.05		4.44

During the nine fiscal months ended September 29, 2012, 31,000 options vested.  At September 29, 2012, there are 30,000 unvested options outstanding, with a weighted average grant-date fair value of $10.25 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 2012 of $9.83 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 September 29, 2012 is zero because all outstanding options have exercise prices in excess of market value. This amount changes based on changes in the market value of the Company’s common stock.  During the nine fiscal months ended September 29, 2012, 22,000 options were exercised.  The total intrinsic value of options exercised during the nine fiscal months ended September 29, 2012 was approximately $110.

Restricted Stock Units

RSU activity under the 2007 Program as of September 29, 2012 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, 2012		891		$	12.58
Granted		437			12.31
Vested*		(12	)		8.29
Cancelled or forfeited		-			-
Outstanding at September 29, 2012		1,316		$	12.53
Expected to vest at September 29, 2012		1,316

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* 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
January 1, 2015	276

Phantom Stock Plan

The Company maintains a phantom stock plan for certain senior executives.  The plan authorizes the grant of up to 300,000 phantom stock units to the extent provided for in the Company’s employment agreements with such senior executives.  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 applicable employment agreement.  The phantom stock units are fully vested at all times.

Phantom stock unit activity under the phantom stock plan as of September 29, 2012 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, 2012		87
Granted		10	$	9.33
Redeemed for common stock		-
Outstanding at September 29, 2012		97