Employee Stock Benefit Plans

9 Months Ended

Sep. 24, 2011

Employee Stock Benefit Plans [Abstract]

Employee Stock Benefit Plans

4. Employee Stock Benefit Plans

Employee Stock Purchase Plan

The Cohu, Inc. 1997 Employee Stock Purchase Plan (“the Plan”) provides for the issuance of shares of our common stock. Under the Plan, eligible employees may purchase shares of common stock through payroll deductions. The price paid for the common stock is equal to 85% of the fair market value of our common stock on specified dates. On May 11, 2011, our stockholders approved an amendment to the Plan which increased the number of shares that may be issued under the Plan by 500,000 shares. Subsequent to this amendment a maximum of 1,900,000 shares of our common stock can be issued under the Plan and at September 24, 2011, there were 704,132 shares available for issuance under the Plan.

Stock Options

Under our equity incentive plans, stock options may be granted to employees, consultants and directors to purchase a fixed number of shares of our common stock at prices not less than 100% of the fair market value at the date of grant. Options generally vest and become exercisable after one year or in four annual increments beginning one year after the grant date and expire five to ten years from the grant date. At September 24, 2011, 1,106,807 shares were available for future equity grants under the 2005 Equity Plan. We have historically issued new shares of our common stock upon share option exercise.

At September 24, 2011, we had 3,190,279 stock options outstanding. These options had a weighted-average exercise price of $13.00 per share, an aggregate intrinsic value of approximately $2.7 million and the weighted average remaining contractual term was approximately 5.6 years.

At September 24, 2011, we had 2,049,650 stock options outstanding that were exercisable. These options had a weighted-average exercise price of $14.38 per share, an aggregate intrinsic value of $1.2 million and the weighted average remaining contractual term was approximately 4.1 years.

Restricted Stock Units

We issue restricted stock units to certain employees, consultants and directors. Restricted stock units vest over either a one-year or a four-year period from the date of grant. Prior to vesting, restricted stock units do not have dividend equivalent rights, do not have voting rights and the shares underlying the restricted stock units are not considered issued and outstanding. Shares of our common stock will be issued on the date the restricted stock units vest.

At September 24, 2011, we had 415,342 restricted stock units outstanding with an aggregate intrinsic value of approximately $4.2 million and the weighted average remaining vesting period was approximately 2.7 years.