Note 8 - Shareholders' Equity

12 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 8:-       SHAREHOLDERS' EQUITY

a. Preferred shares:

There are authorized Preferred shares in the amount of 500,000 shares of Series A cumulative Redeemable Convertible Preferred shares ("Series A"), and an additional 1,500,000 Preferred shares that have been authorized, but the rights, preferences, privileges and restrictions on these shares have not been determined. DPC's Board of Directors is authorized to create a new series of Preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of Preferred shares. As of December 31, 2012, there were no Preferred shares issued or outstanding.

b. Common shares:

Common shares confer upon the holders the rights to receive notice to participate and vote in the general meeting of shareholders of the Company, to receive dividends, if and when declared, and to participate in a distribution of surplus of assets upon liquidation of the Company.

c. Share Option Plans:

1. Under the Company's Digital Power 2012, 2002, 1998 and 1996 Incentive Share Option Plans ("the Incentive Share Option Plans"), options may be granted to employees, officers, consultants, service providers and directors of the Company or its subsidiary.

2. As of December 31, 2012, the Company has authorized according to the Incentive Share Option Plans the grant of options to officers, management, other key employees and others of up to 410,000, 513,000, 240,000 and 1,519,000 options, respectively for the Company's Common shares. For all four Incentive Share Option Plans, the maximum term of the options is ten years from the date of grant. As of December 31, 2012, an aggregate of 370,145 of the Company's options are still available for future grant.

3. The options granted generally become fully vested after four years. Any options that are forfeited or cancelled before expiration become available for future grants.

The options outstanding as of December 31, 2012 have been classified by exercise price, as follows:

Exercise Price				Options outstanding as of December 31, 2012		Weighted average remaining contractual term		Weighted average exercise price		Options exercisable as of December 31, 2012		Weighted average exercise price of options exercisable
						Years
	$0.48	-	$ 0.71		60,763		8.06	$	0.69		20,763	$	0.70
	$0.79	-	$ 1.05		205,000		3.26	$	0.94		205,000	$	0.94
	$1.10	-	$ 1.66		487,000		6.83	$	1.45		279,750	$	1.39
	$1.69	-	$ 1.79		80,000		7.19	$	1.75		45,000	$	1.77
					832,763		6.08	$	1.30		550,513	$	1.24

d. Warrants and options issued to service providers and consultants:

The Company's outstanding warrants and options to consultants and service providers granted outside of the Incentive Stock Option Plans as of December 31, 2012 are as follows:

Issuance date	Options for Common shares		Exercise price per share		Options exercisable
February 2005		20,000	$	1.19		20,000
March 2006		100,000	$	1.16		100,000
December 2010		41,500	$	1.51		20,750
		161,500				140,750

All options are exercisable for ten years from the date of grant.

In 2010, the Company granted 41,500 options to Telkoor's employees. These options vest over four years. The fair value of these options was estimated using the Black-Scholes option-pricing model with the following assumptions for 2012: risk-free interest rates of 1.36%, dividend yield of 0%, volatility of 79.6%, and the remaining contractual term of the options of 7.92 years.

Compensation (revenues) and expenses of $(10) and $32 were recognized for the years ended December 31, 2012 and 2011, respectively, in accordance with the accelerated method.

e. Employee stock ownership plan:

The Company has an employee stock ownership plan ("ESOP") covering eligible employees. The ESOP provides for the Employee Stock Ownership Trust ("ESOT") to distribute the Company's Common shares or cash equivalent as retirement benefits to the participants. As of December 31, 2012, the outstanding Common shares held by the ESOT amount to 157,515 shares.

f. Dividends:

In the event that cash dividends are declared in the future, such dividends will be paid in U.S. dollars. The Company does not intend to pay cash dividends in the foreseeable future.