CYMI » Topics » (iii) Equity Awards.

This excerpt taken from the CYMI 10-Q filed May 7, 2009.

Equity Awards

        We grant equity awards from our 2005 Equity Incentive Plan (the "Incentive Plan"), which provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, stock bonus awards, stock purchase awards, stock unit awards and other stock awards to our employees, non-employee directors and consultants. Stock options issued under the Incentive Plan expire ten years after the options are granted and generally vest and become exercisable ratably over a four-year period following the date of grant. Stock unit awards issued under the Incentive Plan generally vest one to four years from the date granted.

        In February 2009, our board of directors approved a 1,250,000 share increase in the number of shares of common stock available for issuance under the Incentive Plan, from a total of 2,000,000 shares to a total of 3,250,000 shares. This increase remains subject to the approval of our stockholders. We expect that the addition of 1,250,000 shares and the 372,055 shares that remained available for issuance as of March 31, 2009 under the Incentive Plan will be adequate to provide equity awards over the next two years, 2009 and 2010.

        Restricted Stock Unit Awards and Performance-Based Restricted Stock Unit Awards—In October 2007, the compensation committee of our board of directors (the "Committee") approved the Long Term Incentive Bonus Program ("LTIP") which became effective January 1, 2008 for our executive officers and certain key employees. Any potential equity based bonuses awarded under the LTIP are calculated based on a target dollar amount which is divided into equity award components to be granted from our Incentive Plan. The Committee approved the target dollar amounts for awards under the LTIP for the calendar year 2009 in January 2009, and in February 2009, the Committee approved the equity awards to be granted from the Incentive Plan for 2009. In consideration of the economic recession and in conjunction with our cost reduction activities, these equity awards were granted at approximately 65% of the target dollar amounts for such awards. For 2009, the equity awards for our executive officers and certain key employees consist of time-based restricted stock unit awards ("RSUs") and performance based restricted stock units ("PRSUs"). The shares subject to the RSU awards will vest in three equal installments beginning January 1, 2010. The shares subject to the PRSU awards will vest and become issuable following a three-year performance period that commences on January 1, 2009 only if our relative performance compared to specified peer companies over the three-year period meets or exceeds certain performance measures. Vesting of the PRSU awards is subject to downward adjustment if the eligible participant fails to meet 100% of his or her individual management-by-objective goals during the three-year performance period. During the three months ended March 31, 2009, 198,500 RSUs and 107,820 PRSUs were granted under the LTIP for 2009.

        We value the stock unit awards which are issued to our non-employee directors and key employees based on the fair value of our common stock on the date that the stock unit award is granted. Compensation expense related to RSUs is recognized straight line over the service period. For those

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Table of Contents


CYMER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Three Months Ended March 31, 2009

(Unaudited)

2. STOCKHOLDERS' EQUITY (Continued)


PRSUs that have performance-based conditions, we adjust the compensation expense over the service period based upon the expected achievement of the performance conditions. The fair value of stock- based awards granted, less expected forfeitures, is recognized to expense over the requisite service period.

        Share-Based Compensation—The components of share-based compensation expense for employees, non-employee directors and non-employees for the three months ended March 31, 2009 and 2008 are as follows (in thousands):

 
  Three months
ended March 31,
 
 
  2009   2008  

Stock options—employees

  $ 775   $ 912  

Stock options—non-employees or change in status

    10     (14 )

Restricted stock unit awards—employees

    360     153  

Restricted stock units—non-employee directors

    175     204  

Performance restricted stock unit awards—employees

    (483 )   310  
           

Total share-based compensation

  $ 837   $ 1,565  
           

    Stock Repurchase Program

        In April 2008, our board of directors authorized us to repurchase up to $100 million of our common stock in the open market or in privately negotiated transactions. The program does not have a fixed expiration date and may be discontinued at any time. As of March 31, 2009, we had purchased 803,500 shares for $22.9 million under this program, all of which were purchased in 2008. We did not repurchase any shares of our common stock under this program in the first quarter of 2009 and approximately $77.1 million remain available for purchases under this program.

This excerpt taken from the CYMI 10-Q filed Nov 3, 2008.

Equity Awards

        We grant equity awards from our 2005 Equity Incentive Plan (the "Incentive Plan"), which provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, stock bonus awards, stock purchase awards, stock unit awards and other stock awards to our employees, non-employee directors and consultants. Stock options issued under the Incentive Plan expire ten years after the options are granted and generally vest and become exercisable ratably over a four-year period following the date of grant. Stock unit awards issued under the Incentive Plan generally vest one to four years from the date granted.

        2007 Long-Term Incentive PlanIn April 2007, the compensation committee of our board of directors adopted the Long-Term Incentive Bonus Plan ("2007 LTIP") for 2007. Per the provisions of the 2007 LTIP, any bonuses accrued for performance in 2007 are paid 50% in cash and 50% in the form of restricted stock unit awards and both are ultimately earned or awarded based on the achievement of certain financial and performance criteria as set forth in the 2007 LTIP. The number of shares subject to the target restricted stock unit awards for 2007 was determined by dividing the cash value of the award by $44.57, the closing price of our common stock as reported on the Nasdaq Global Select Market on April 16, 2007, the grant date.

        In March 2008, the compensation committee approved the 2007 LTIP payments based on the achievement of the performance conditions for 2007 and issued 66,000 restricted stock units from our Incentive Plan. The restricted stock units will vest in three equal annual installments beginning January 1, 2009.

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CYMER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Nine Months Ended September 30, 2008

(Unaudited)

2. STOCKHOLDERS' EQUITY (Continued)

        Long-Term Incentive Bonus Program—In October 2007, the compensation committee of our board of directors approved the Long Term Incentive Bonus Program ("LTIP") which became effective January 1, 2008 for our executive officers and certain key employees. Any potential equity based bonuses awarded under the LTIP are calculated based on a target dollar amount. This target amount is divided into two equity award components to be granted from our Incentive Plan: 50% of the target amount in time-based vesting stock options and 50% in performance-based restricted stock units ("PRSUs"). In January 2008, we granted stock options to purchase 434,000 shares under the LTIP and they will vest over our standard four-year schedule. The shares subject to the PRSU awards will vest and become issuable following a three-year performance period that commences on the grant date only if our relative performance compared to specified peer companies over the three-year period meets or exceeds certain performance measures. Vesting of the PRSU awards is subject to downward adjustment if the participant fails to meet 100% of his or her individual management-by-objective goals during the three-year performance period. During the nine months ended September 30, 2008, 159,000 PRSU's were granted at 100% of the target number of shares under the LTIP.

        We value the stock unit awards which are issued to our non-employee directors and key employees using an intrinsic calculation based on the price of our stock on the date that the stock unit award is granted. Compensation expense related to these stock unit awards is recognized straight line over the service period. For those stock unit awards that have performance-based conditions such as those granted under our long term incentive programs, we adjust the compensation expense over the service period based upon the expected achievement of the performance conditions under our programs. The fair value of stock-based options granted, less expected forfeitures, is recognized to expense over the requisite service period.

        Share-Based CompensationThe components of share-based compensation expense for employees, non-employee directors and non-employees for the three and nine months ended September 30, 2008 and 2007 are as follows (in thousands):

 
  Three months ended
September 30,
  Nine months ended
September 30,
 
 
  2008   2007   2008   2007  

Stock options—employees and non-employee directors

  $ 904   $ 917   $ 2,671   $ 3,147  

Stock options—non-employees or change in status

    4     14     32     123  

Restricted stock unit awards—employees

    173     213     500     567  

Restricted stock units—non-employee directors

    175     175     554     526  

Performance restricted stock unit awards—employees

    63         768      
                   

Total share-based compensation

  $ 1,319   $ 1,319   $ 4,525   $ 4,363  
                   

        For the nine months ended September 30, 2008, we realized a tax shortfall for share-based compensation of approximately $935,000. The tax windfall realized for share-based compensation for the nine months ended September 30, 2007 totaled approximately $1.9 million.

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CYMER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Nine Months Ended September 30, 2008

(Unaudited)

2. STOCKHOLDERS' EQUITY (Continued)

These excerpts taken from the CYMI 10-K filed Feb 27, 2008.
(iii)         Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise

 

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all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the earlier of (1) the original contractual life of the option, or (2) ten years from the original grant date of the option).

 

Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise

 

3



 

all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the earlier of (1) the original contractual life of the option, or (2) ten years from the original grant date of the option).

 

Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise

 

3



 

all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the earlier of (1) the original contractual life of the option, or (2) ten years from the original grant date of the option).

 

Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise

 

3



 

all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the earlier of (1) the original contractual life of the option, or (2) ten years from the original grant date of the option).

 

Equity Awards. 
The unvested portion of any stock option(s) or other equity award(s) held
by the Employee under the Company’s equity plans shall vest and become
exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise



 



3
















 



all of the Employee’s
vested stock options until the later of (A) the original post-termination
exercise period provided in the Employee’s stock option agreement or (B) one
year from the date of such termination (but not beyond the earlier of (1) the
original contractual life of the option, or (2) ten years from the
original grant date of the option).



 



(iv)                              

This excerpt taken from the CYMI 10-Q filed May 8, 2007.
(iii)         Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the original contractual life of the option); provided, however, that notwithstanding the foregoing, with respect to each stock option granted to the Employee before the Effective Date of this Agreement, such stock option shall not remain exercisable beyond the later of the fifteenth (15th) day of the third (3rd) month following the date at which, or December 31 of the calendar year in which, the stock option would otherwise have expired if the stock option had not been extended, based on the terms of the stock option at

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the original grant date, or such later date that would not cause such option to be treated as deferred compensation under 409A of the Code (as defined below).

These excerpts taken from the CYMI 10-K filed Feb 28, 2007.
(iii)         Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the original contractual life of the option); provided, however, that notwithstanding the foregoing, with respect to each stock option granted to the Employee before the Effective Date of this Agreement, such stock option shall not remain exercisable beyond the later of the fifteenth (15th) day of the third (3rd) month following the date at which, or December 31 of the calendar year in which, the stock option would otherwise have expired if the stock option had not been extended, based on the terms of the stock option at the original grant date, or such later date that would not cause such option to be treated as deferred compensation under 409A of the Code (as defined below).

(iii)         Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the original contractual life of the option); provided, however, that notwithstanding the foregoing, with respect to each stock option granted to the Employee before the Effective Date of this Agreement, such stock option shall not remain exercisable beyond the later of the fifteenth (15th) day of the third (3rd) month following the date at which, or December 31 of the calendar year in which, the stock option would otherwise have expired if the stock option had not been extended, based on the terms of the stock option at

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the original grant date, or such later date that would not cause such option to be treated as deferred compensation under 409A of the Code (as defined below).

(iii)         Equity Awards.  The unvested portion of any stock option(s) or other equity award(s) held by the Employee under the Company’s equity plans shall vest and become exercisable in full upon the date of such termination.  The Employee shall be entitled to exercise all of the Employee’s vested stock options until the later of (A) the original post-termination exercise period provided in the Employee’s stock option agreement or (B) one year from the date of such termination (but not beyond the original contractual life of the option); provided, however, that notwithstanding the foregoing, with respect to each stock option granted to the Employee before the Effective Date of this Agreement, such stock option shall not remain exercisable beyond the later of the fifteenth (15th) day of the third (3rd) month following the date at which, or December 31 of the calendar year in which, the stock option would otherwise have expired if the stock option had not been extended, based on the terms of the stock option at

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the original grant date, or such later date that would not cause such option to be treated as deferred compensation under 409A of the Code (as defined below).

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