Share-Based Compensation (Text Block)

12 Months Ended

Dec. 31, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation [Text Block]

NOTE 13 - SHARE-BASED COMPENSATION

The following table shows the total compensation cost charged against income for share-based compensation plans, including stock options and share grants, recognized in the statements of income for the years ended December 31, 2012, 2011 and 2010:

		2012		2011		2010
Cost of goods sold	$	458	$	394	$	350
Selling, general and administrative expense		12,715		12,266		11,347
Research and development expense		1,226		1,043		1,354
Total share-based compensation expense	$	14,399	$	13,703	$	13,051

Stock Options – Stock options generally vest in equal annual installments over a four-year period and expire ten years after the grant date. Share-based compensation expense for stock options granted during 2012, 2011 and 2010 was calculated on the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted-average assumptions:

	2012	2011	2010
Expected volatility	53.86%	52.53%	57.99%
Expected term (years)	7.5	7.5	7.3
Risk free interest rate	1.16%	2.37%	2.60%
Forfeiture rate	0.76%	0.47%	0.88%
Dividend yield	N/A	N/A	N/A

Expected volatility – The Company estimates expected volatility using historical volatility. Public trading volume on options in the Company's stock is not material. As a result, the Company determined that utilizing an implied volatility factor would not be appropriate. The Company calculates historical volatility for the period that is commensurate with the option's expected term assumption. For 2012, the expected volatility for grants to officers and the Board is 52.45%, while the expected volatility for grants to all other employees is 53.90%.

Expected term – The Company has evaluated expected term based on history and exercise patterns across its demographic population. The Company believes that this historical data is the best estimate of the expected term of a new option. For 2012, the expected term for grants to officers and the Board is 8years, while the expected term for grants to all other employees is 5years.

Risk free interest rate – The Company estimate the risk-free interest rate based on zero-coupon U.S. treasury securities for a period that is commensurate with the expected term assumption.

Forfeiture rate - The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest as forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinguished from “cancellations” or “expirations” and represents only the unvested portion of the surrendered option. This analysis will be re-evaluated at least annually, and the forfeiture rate will be adjusted as necessary.

Dividend yield – The Company historically has not paid a cash dividend on its common stock; therefore this input is not applicable.

Discount for post vesting restrictions – This input is not applicable.

The weighted-average grant-date fair value of options granted during 2012, 2011 and 2010 was $10.60, $16.55, and $11.45, respectively. The total cash received from option exercises was $1 million, $4million and $5million during 2012, 2011 and 2010, respectively.

For the years ended December 31, 2012, 2011 and 2010, stock option expense was $5million, $5 million and $4, respectively.

At December 31, 2012, unamortized compensation expense related to unvested options, net of estimated forfeitures, was approximately $9million. The weighted average period over which share-based compensation expense related to these options will be recognized is approximately 2years.

A summary of the Company's stock option plans is as follows:

Stock Options	Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at January 1, 2010	3,980	$	12.50	5.2	$	34,989
Granted	405		18.98
Exercised	(669)		7.16			9,712
Forfeited or expired	(9)		27.39
Outstanding at January 1, 2010	3,707		14.14	5.2		47,891
Exercisable at December 31, 2010	2,785		12.53	4.1		40,420
Outstanding at January 1, 2011	3,707		14.14
Granted	385		29.07
Exercised	(496)		7.17			11,120
Forfeited or expired	(9)		20.80
Outstanding at December 31, 2011	3,587		16.69	5.1		22,299
Exercisable at December 31, 2011	2,622		14.51	3.9		20,201
Outstanding at January 1, 2012	3,587		16.69
Granted	402		19.31
Exercised	(274)		4.81			4,249
Forfeited or expired	(2)		20.10
Outstanding at December 31, 2012	3,713		17.85	5.0		9,744
Exercisable at December 31, 2012	2,715		16.48	3.7		9,472

The following table summarizes information about stock options outstanding at December 31, 2012:

Plan		Range of exercise prices	Number outstanding	Weighted average remaining contractual life (years)		Weighted average exercise price
2001 Plan	$	5.80-29.21	3,713	5.0	$	17.85

The following summarizes information about stock options exercisable at December 31, 2012:

Plan	Range of exercise prices	Number exercisable	Weighted average remaining contractual life (years)	Weighted average exercise price
2001 Plan	5.80-29.21	2,715	3.7	16.48

Share Grants - Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year period. A summary of the Company's non-vested share grants in 2012, 2011 and 2010 are presented below:

Restricted Stock Grants	Shares		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Nonvested at January 1, 2010	714	$	20.50
Granted	477		17.89
Vested	(265)		21.94
Forfeited	(55)		20.12
Nonvested at December 31, 2010	871	$	18.66	$	7,257
Nonvested at January 1, 2011	871	$	18.66
Granted	472		25.78
Vested	(274)		20.23
Forfeited	(45)		19.68
Nonvested at December 31, 2011	1,024	$	21.48	$	-
Nonvested at January 1, 2012	1,024	$	21.48
Granted	482		18.95
Vested	(305)		21.48	$	6,560
Forfeited	(37)		21.67
Nonvested at December 31, 2012	1,164	$	20.42	$	-

For each of the years ended December 31 of 2012, 2011 and 2010, there was approximately $9 million of total recognized share-based compensation expense related to restricted stock arrangements granted under the plans. The total unrecognized share-based compensation expense as of December 31 2012 was approximately $20 million, which is expected to be recognized over a weighted average period of approximately 2years.

On September 22, 2009, the Company entered into an employment agreement (the “Agreement”) with Dr. Keh-Shew Lu, President and Chief Executive Officer of the Company (the “Employee”), pursuant to which he will continue to be employed by the Company in such positions for an additional six-year term. As part of the Agreement, the Company and the Employee entered into a Stock Award Agreement that provides that: (i) the Company shall grant to the Employee 100,000 shares of Common Stock in the form of restricted stock awards on each of April 14, 2010, 2011, 2012, 2013, 2014 and 2015; (ii) each such installment would vest only if the Company achieved a specified amount of net sales; (iii) upon the termination of the Employee's employment, the Company's obligation to grant any subsequent installment would terminate; and (iv) any granted shares would be automatically forfeited and returned to the Company if the Employee's employment with the Company is terminated before the Company achieves the specified target amount of net sales, except in the case of death or disability (as defined) in which case the granted shares would become fully vested on the date of death or disability. The estimated fair value of this grant is approximately $12 million and is being expensed on a straight line basis through April 14, 2015. As of December 31, 2012, no installments have vested. As of December 31, 2012, three annual installments have been granted and are included in the above table as granted but not vested.