Stockholders' Equity

12 Months Ended

Jun. 30, 2013

Equity [Abstract]

Stockholders' Equity

Note 6—Stockholders’ Equity

Stock Options and Awards

Symmetricom has equity benefit plans under which employees, directors and consultants may be granted non-qualified and incentive options to purchase shares of our common stock and restricted stock. Stock options granted under these plans have contractual terms ranging from 5-10 years. One of these plans was amended in fiscal 2003 to effectively provide that restricted stock could be granted and repurchased for no cash purchase price. Stock appreciation rights may also be granted under this plan; however, none have been granted to date. All options have been granted at the fair market value of our common stock on the date of grant and generally vest over three or four years.

Our right to repurchase restricted shares generally lapses over the same three or four-year term as the vesting period applicable to the stock options. The estimated future annual forfeiture rate used to record stock-based compensation expense was 5%, 7%, and 8% for fiscal 2013, 2012, and 2011, respectively. At June 30, 2013, the total future compensation cost related to unvested stock-based awards granted to employees, directors and consultants under the Company’s stock option plans was approximately $5.9 million, net of estimated forfeitures of $0.8 million. This cost will be amortized on an accelerated basis over a period of approximately 1.4 years and will be adjusted for subsequent changes in estimated forfeitures.

The following table shows total stock-based compensation expense included in the consolidated statements of operations:

	Year ended
	June 30, 2013			July 1, 2012			July 3, 2011
	(In thousands)
Cost of sales	$	1,037		$	867		$	802
Research and development		1,200			1,183			870
Selling, general and administrative		4,878			4,092			3,126
Pre-tax stock-based compensation expense		7,115			6,142			4,798
Less: Income tax effect		(2,633	)		(2,273	)		(1,775	)
Net stock-based compensation expense	$	4,482		$	3,869		$	3,023

The following table summarizes stock option and award activity for fiscal years 2013, 2012 and 2011:

				Non Performance-based  Options Outstanding					Restricted Stock Outstanding
	Shares Available For Grant			Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Grant-Date Fair Value
	(In thousands, except per share amounts)
Balances at June 27, 2010		5,697			6,043		$	5.84		219		$	5.20
Granted—options		(2,193	)		2,193			6.20
Granted—restricted shares		(422	)		—			—		211			6.55
Exercised		—			(462	)		4.69
Vested		—			—			—		(175	)		5.19
Cancelled and expired		1,457			(1,240	)		7.22		(27	)		5.78
Expired from plans prior to 1999		(76	)		—					—			—
Balances at July 3, 2011		4,463			6,534		$	5.78		228		$	6.39
Granted—options		(2,109	)		2,109			5.16
Granted—restricted shares		(312	)		—			—		156			5.32
Exercised		—			(475	)		4.53
Vested		—			—			—		(123	)		6.53
Cancelled and expired		852			(852	)		7.07		—
Shares expired from plans prior to 1999		(5	)		—			—		—			—
Balances at July 1, 2012		2,889			7,316		$	5.54		261		$	5.68
Increase in authorized shares		2,000
Granted—options		(2,428	)		2,428			5.69
Granted—restricted shares		(878	)		—			—		461			5.47
Exercised		—			(680	)		4.46
Vested		—			—			—		(162	)		5.84
Cancelled and expired		1,310			(978	)		5.76		(164	)		5.92
Balances at June 30, 2013		2,893			8,086		$	5.64		396		$	5.28

On October 26, 2012 at our annual meeting of shareholders, the shareholders approved an additional 2.0 million shares for future issuance under the 2006 Incentive Award Plan.

Options outstanding, vested and expected to vest, and exercisable as of June 30, 2013 were as follows:

Option	Number of Shares		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In thousands)		(In years)				(In thousands)
Outstanding		8,086		3.83	$	5.64	$	65
Vested and expected to vest		7,868		3.77	$	5.65	$	64
Exercisable		4,539		2.49	$	5.72	$	51

The aggregate intrinsic value in the preceding table represents the total pre-tax value of stock options outstanding as of June 30, 2013, based on our common stock closing price of $4.49 on June 30, 2013, which would have been received by the option holders had all option holders exercised and sold their options as of that date.

As of June 30, 2013, July 1, 2012, and July 3, 2011, the number of shares and weighted average exercise prices of exercisable options were 4.5 million at $5.72; 3.6 million at $5.68; and 2.8 million at $6.02, respectively.

The total intrinsic value of options exercised during fiscal 2013, 2012, and 2011, was $1.0 million, $0.6 million, and $0.6 million, respectively.

The weighted average grant-date fair value of options granted was $2.79 in 2013, $2.45 in 2012 and $3.06 in 2011. Our calculations were made using the Black-Scholes option-pricing model. The fair value of our stock-based awards to employees was estimated assuming no expected dividend and the following weighted-average assumptions for fiscal 2013, 2012 and 2011:

	Year ended
	June 30, 2013			July 1, 2012			July 3, 2011
Expected life (in years)		5.3			4.9			5.1
Risk-free interest rate		0.9	%		0.6	%		1.2	%
Volatility		56.8	%		56.6	%		56.6	%

Restricted Stock Awards

Our restricted stock awards are grants that entitle the holder to acquire shares of restricted common stock with certain designated prices or at no cost on a time or performance basis. The shares of restricted stock cannot be sold, pledged, or otherwise disposed of until the award vests and any unvested shares may be reacquired by us following the awardees’ termination of service. The restricted stock awards typically vest on the first, second or third anniversary of the grant date or on a graded vesting schedule over the designated service period with certain conditions and restrictions.

Employee Stock Purchase Plan

On August 13, 2010, the Board of Directors approved an employee stock purchase plan (the “ESPP”) and reserved 1.4 million shares for issuance under the ESPP. The ESPP allows eligible employees to purchase shares of the Company’s stock at a discount through payroll deductions. The ESPP consists of six-month offering periods commencing on the first trading day of March and September each year. Employees purchase shares in the purchase period at 85% of the market value of the Company’s common stock at either the beginning of the offering period or the end of the offering period, whichever price is lower. The first six month offering period commenced on March 1, 2011.

Stock Repurchase Program

On November 17, 2011, the Company’s Board of Directors authorized management to repurchase an additional 4.1 million shares of Symmetricom common stock in addition to the remaining shares available for repurchase under previously approved programs. As of June 30, 2013, the total number of shares available for repurchase under the repurchase program authorized by the Board of Directors was approximately 1.9 million.

In fiscal 2013, we repurchased 870,000 shares for an aggregate price of approximately $5.4 million. The repurchased shares were recorded as a reduction of our common stock and resulted in a reduction of stockholders’ equity. Further, we repurchased 277,000 shares in fiscal 2013 for an aggregate price of approximately $1.6 million to cover the cost of employee income taxes on vested restricted stock and option exercises.

Preferred Stock

We have 500,000 shares of $0.0001 par value preferred stock authorized, of which none have been issued as of June 30, 2013.