Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 8: Stockholders' Equity

In August 2012, Tower completed a reverse split of its ordinary shares at a ratio of 1 for 15. Proportional adjustments were made to all of Tower's outstanding convertible securities.

All numbers of shares and other convertible securities of Tower and Tower's share price in these financial statements reflect the effect of the reverse share split.

Common Stock

As of December 31, 2014 and December 31, 2013, the Company had 200 authorized shares.

The number of outstanding shares of the Company's common stock at December 31, 2014 was 100, all of which are owned by Tower.

Stock Options

Tower's 2009 Share Incentive Plans (the "2009 Plans") - In 2009 the Company adopted new share incentive Plans to directors officers, employees and its subsidiaries. The options granted at an exercise price which equals the closing market price of the ordinary shares immediately prior to the date of grant, the exercise price will not be lower than the nominal value of the Shares, vest over up to a three, and are not exercisable beyond seven years from the grant date. As of December 31, 2014 123,604 non-qualified stock options outstanding under the 2009 Plans. No further grants may be made under these plans.

Tower's 2013 Share Incentive Plan (the "2013 Plan") -In 2013 the Company adopted new share incentive Plan to directors, officers, employees and its subsidiaries. Options to be granted under the plan will bear exercise price which equals an average of the closing price in the thirty trading days immediately prior to the date of grant, the exercise price will not be lower than the nominal value of the Shares, vest over up to a three year period and are not exercisable beyond seven years from the grant date. As of December 31, 2014 941,634 non-qualified stock optionsare outstanding under the 2013 Plan. Further grants may be approved in accordance with the board of directors of the Company's decision.

As of December 31, 2014, total of 1,129,823 non-qualified stock options are outstanding under all Options Plans.

During 2013, Tower awarded 894,634 non-qualified stock options to Company employees that vest over a three year period from the date of grant. The weighted average exercise price was $4.48.

During 2014, Tower awarded 125,000 non-qualified stock options to Company employees that vest over a three year period from the date of grant. The weighted average exercise price was $10.89.

The Company recorded $671,000, $261,000 and $553,000 of compensation expenses relating to options granted to employees, for the years ended December 31, 2014, 2013 and 2012, respectively. Stock-based compensation expense was recognized in the following line items in the statement of operations (in thousands):

	Year Ended December 31,
		2014			2013			2012
Component of income (loss) before provision for income taxes:
Cost of revenue	$	313		$	190		$	291
Research and development, net		334			120			126
Selling, general and administrative		24			(49)			136
Stock-based compensation expense		671			261			553
Income tax benefits related to stock-based compensation (before consideration of valuation allowance)		(244	)		(92	)		(196	)
Stock-based compensation, net of taxes	$	427		$	169		$	357

The following table summarizes stock option award activity:

	Number of options			Weighted average exercise price per option
	(in thousands)
Outstanding at December 31, 2013	1,124		$	6.30
Granted	125			10.89
Exercised	(40	)		4.56
Cancelled or expired	(79	)		5.98
Outstanding at December 31, 2014	1,130			6.89
Options exercisable at December 31, 2014	185			14.82

	Number of options			Weighted average exercise price per option
	(in thousands)
Outstanding at December 31, 2012	364		$	15.51
Granted	895			4.48
Exercised	(19	)		4.35
Cancelled or expired	(116	)		21.49
Outstanding at December 31, 2013	1,124			6.30
Options exercisable at December 31, 2013	203		$	12.08

	Number of options			Weighted average exercise price per option
	(in thousands)
Outstanding at December 31, 2011	364		$	15.55
Granted	5			12.91
Exercised	(1	)		5.58
Cancelled or expired	(4	)		17.00
Outstanding at December 31, 2012	364			15.51
Options exercisable at December 31, 2012	251		$	13.07

The aggregate pretax intrinsic value, weighted average remaining contractual life, and weighted average per share exercise price of options outstanding and of options exercisable as of December 31, 2014 were as follows:

Options Outstanding:

	Range of Exercise Prices	Number of Shares (In thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (In years)
$	4.35-13.2	1,038	$	5.43		5.64
$	21-28.2	92	$	23.52		2.78
		1,130	$	6.89		5.41

Options Exercisable:

	Range of Exercise Prices	Number of Shares (In thousands)	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (In years)
$	$ 4.35-13.2	93	$	6.24		2.30
$	$ 21-28.2	92	$	23.52		2.78
		185	$	14.82		2.54

The following table summarizes key data points for exercised options (in thousands):

	Year Ended December 31,
		2014	2013		201 2
The intrinsic value of options exercised	$	209	$	31	$	5
Cash received from the exercise of stock options		181		82		4
The tax benefit realized from stock options exercised		76		10		2
The fair value of options  exercised	$	250	$	124	$	3