the 2009 Annual Report (pdf) - PLX Technology

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These factors could change in the future, which would affect the share-based compensation expense in future periods. As share-based compensation expense recognized in the Consolidated Statements of Operations for the fiscal years 2009, 2008 and 2007 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company’s estimated forfeiture rate of 29%, 26% and 27% for the years ended December 31, 2009, 2008 and 2007, respectively, was based on historical experience. The following table shows total share-based compensation and employee stock ownership plan expenses recorded for the years ended December 31, 2009, 2008 and 2007 (in thousands): Years Ended December 31, 2009 2008 2007 Cost of revenues………………………………………… $ 91 $ 59 $ 54 Research and development……………………………… 862 1,317 1,712 Selling, general and administrative………………………… 1,767 1,925 2,675 Total share-based compensation expense………………… $ 2,720 $ 3,301 $ 4,441 The 2009 share-based compensation expense included $1.6 million of share-based compensation expense related to the unamortized expense of options accelerated in connection with the Company’s tender offer. For more information on the tender offer, refer to the ‘Tender Offer’ section in this Note 2. A summary of option activity under the Company’s stock equity plans during the years ended December 31, 2009, 2008 and 2007 are as follows: Weighted Average Remaining Aggregate Options Available Number of Weighted Average Contractual Term Intrinsic Options for Grant Shares Exercise Price (in years) Value Outstanding at December 31, 2006……… 1,640,010 3,713,477 $ 11.47 Authorized…………………………… - - - Granted………………………………… (790,650) 790,650 10.30 Exercised……………………………… - (211,417) 6.16 Cancelled……………………………… 293,237 (293,237) 13.44 Outstanding at December 31, 2007……… 1,142,597 3,999,473 11.38 4.79 $ 2,663,803 Authorized…………………………… 1,200,000 - - Granted………………………………… (1,531,500) 1,531,500 5.12 Exercised……………………………… - (119,229) 7.09 Cancelled……………………………… 651,901 (651,901) 8.96 Plan Termination (1)…………………… (150,753) - - Adjustment…………………………… (60) - - Outstanding at December 31, 2008……… 1,312,185 4,759,843 9.80 4.20 $ 1,262 Granted………………………………… (1,265,400) 1,265,400 2.43 Exercised……………………………… - (8,000) 3.22 Cancelled……………………………… 3,191,447 (3,191,447) 11.62 Retired (2)……………………………… (2,133,278) Plan Termination (3)…………………… (234,144) - - Outstanding at December 31, 2009……… 870,810 2,825,796 4.36 5.14 $ 1,794,310 Exercisable at December 31, 2009……… 1,077,042 $ 6.98 3.63 $ 198,345 (1) Represents options cancelled and no longer issuable under the 1998 Stock Incentive Plan and the NetChip Technology, Inc. 1996 Flexible Stock Incentive Plan. (2) Represents options that were tendered and retired pursuant to the Company’s 2009 tender offer program. (3) Represents options cancelled and no longer issuable under the 1998 Stock Incentive Plan and the Sebring Systems, Inc. 1997 Stock Option/Issuance Plan. 50
The Black-Scholes weighted average fair values of options granted during the years ended December 31, 2009, 2008 and 2007 were $1.20, $2.27 and $5.34, respectively. The following table summarizes ranges of outstanding and exercisable options as of December 31, 2009: Options Outstanding Options Exercisable Weighted Average Remaining Weighted Weighted Range of Contractual Term Average Average Exercise Price Number (in years) Exercise Price Number Exercise Price $1.25-$2.00………………… 878,039 6.10 $ 1.91 4,539 $ 1.44 $2.04-$3.22………………… 646,976 5.23 2.25 262,976 2.51 $3.27-$4.95………………… 592,000 5.77 4.10 172,161 4.03 $5.50-$10.21………………… 579,031 3.37 8.56 518,926 8.63 $10.46-$25.94……………… 129,750 3.11 13.98 118,440 14.24 Total………………………… 2,825,796 5.14 $ 4.36 1,077,042 $ 6.98 The total intrinsic value of options exercised during the year ended December 31, 2009 was approximately $2,000. In 2008, the intrinsic value of options exercised was approximately $0.2 million. The fair value of options vested during the year ended December 31, 2009 was approximately $5.6 million. As of December 31, 2009, total unrecognized compensation costs related to nonvested stock options net of estimated forfeitures was $0.8 million which is expected to be recognized as expense over a weighted average period of approximately 1.39 years. Tender Offer On March 31, 2009, the Company commenced an offer to purchase for cash certain outstanding options held by its employees (including officers) and directors, and filed associated documents with the SEC under Schedule TO. Options to purchase 3,262,809 shares of our common stock were eligible for purchase under the offer. Eligible options must have had an exercise price of at least $5.50 and must have met other conditions set forth in the offer. The amount of cash offered for eligible options was based on the Black-Scholes valuation of each eligible option, subject to a minimum of $0.05 per share, and ranged from $0.05 to $1.42 per share. On May 1, 2009, upon the closing of the offer, options to purchase 2,533,278 shares of the Company’s common stock were validly tendered and not withdrawn, and the Company accepted the repurchase of these options. Each eligible optionee who validly tendered eligible options pursuant to the offer to purchase received a cash payment in the range of $0.05 to $1.42 per optioned share for an aggregate amount of $0.9 million. The Company recognized $1.6 million in share-based compensation expenses associated with the acceleration of unamortized compensation expenses on the previously unvested tendered options in the second quarter of 2009. The aggregate amount of the payments made in exchange for eligible options was charged to stockholders' equity to the extent that the amount did not exceed the fair value of the eligible options accepted for payment, as determined at the purchase date. The amount paid in excess of that fair value of $16,000, as determined at the purchase date, was also recorded as compensation expense. The Company returned to its 2008 Equity Incentive Plan the first 400,000 shares underlying options purchased pursuant to the offer that were originally issued under the 2008 plan or our 1999 Stock Incentive Plan. These options have become available for future grant. The Company retired the remaining 2,133,278 tendered options. 51
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Page 4 and 5: UNITED STATES SECURITIES AND EXCHAN
Page 6 and 7: PART I ITEM 1: BUSINESS Overview PL
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Page 10 and 11: ehaviors often exist. PLX has a ded
Page 12 and 13: tools are more comprehensive than c
Page 14 and 15: Manufacturing We have adopted a "fa
Page 16 and 17: investment portfolio could be negat
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Page 20 and 21: We record as expenses the costs rel
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Page 28 and 29: Results of Operations Comparison of
Page 30 and 31: Years Ended December 31, 2009 2008
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Page 34 and 35: As of December 31, 2009, we had the
Page 36 and 37: management’s assessment that real
Page 38 and 39: Our independent registered public a
Page 40 and 41: PART IV ITEM 15: EXHIBITS AND FINAN
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Page 44 and 45: PLX TECHNOLOGY, INC. CONSOLIDATED B
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Page 48 and 49: PLX TECHNOLOGY, INC. NOTES TO CONSO
Page 50 and 51: Long-lived Asset Impairment Long-li
Page 52 and 53: Comprehensive Income (Loss) The com
Page 56 and 57: 3. Net Income (Loss) Per Share The
Page 58 and 59: December 31, 2008 Amortized Unreali
Page 60 and 61: an amount equal to that excess. The
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Page 64 and 65: 12. Income Taxes The provision (ben
Page 66 and 67: A reconciliation of the beginning a
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Page 74 and 75: EXHIBIT 23.1 PLX Technology, Inc. S
Page 76: EXHIBIT 31.2 CERTIFICATION PURSUANT
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