

Note 13.	Employee Stock and Benefit Plans

Equity Compensation Plans. Under our equity incentive plans we may grant various types of equity awards to employees and Directors. We have granted time-vest and performance-vest stock options and time-vest and performance-vest restricted stock. Generally, options vest based on continuous employment, over a four-year period. The options generally expire in either seven or ten years from the date of grant and are exercisable at the market value of the common stock at the grant date. Time-vest restricted stock awards generally vest based on continuous employment over a two or four-year period. Performance-based awards vest if the specified performance targets are met and the grantee remains employed over the required period. The performance targets for these awards are generally based on the achievement of company-specific financial results. For performance-based awards, expense is recognized when it is probable the performance goal will be achieved.

We issue new shares of common stock upon exercise of stock options and the vesting of restricted stock. As of December 31, 2013 there were 2.4 million shares of common stock authorized for future equity awards. Each restricted stock unit granted reduces and each restricted stock unit forfeited or canceled increases the shares available for future grant by a factor of 1.6 shares. We also have an employee stock purchase plan, under which 0.5 million shares of common stock are authorized for future issuance as of December 31, 2013.

Stock-based compensation expense recognized in our consolidated statements of operations includes amounts related to stock options, restricted stock, and employee stock purchase plans and was as follows (in thousands):



	Years Ended December 31,
	2013		2012		2011
Total stock-based compensation expense	$	7,468	$	8,123	$	11,747

The total stock-based compensation amounts disclosed above are recorded in their respective line items within operating expenses in the consolidated statement of operations, including amounts that are reported in Restructuring and other charges. No stock-based compensation was capitalized as part of the cost of an asset as of December 31, 2013, 2012, or 2011. As of December 31, 2013, we had $12.1 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock awards. The unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately three years.

As discussed in Note 1, Description of Business and Summary of Significant Accounting Policies - Stock-Based Compensation, the valuation models for stock option awards require various highly judgmental assumptions. The assumption for the expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, including the contractual terms, vesting schedules, and expectations of future employee behavior. Expected stock price volatility is based on historical volatility of our common stock for the related expected term. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with a term equivalent to the expected term of the stock options. Notwithstanding the special cash dividend of $1.00 per share paid on our common stock during the quarter ended September 30, 2011, the dividend yield is estimated at zero because we do not currently anticipate paying dividends in the foreseeable future.

The fair value of options granted was determined using the Black-Scholes model and used the following weighted average assumptions:



	Years Ended December 31,
	2013		2012		2011
Expected dividend yield	—	%	—	%	—	%
Risk-free interest rate	0.86	%	0.50	%	1.31	%
Expected term (years)	4.3		4.2		4.0
Volatility	48	%	58	%	54	%

Restricted stock unit and award activity was as follows (shares are in thousands):



	Shares		Weighted Average Grant Date Fair Value Per Share		Total Grant Date Fair Value of Vested Awards (000's)
Nonvested shares, December 31, 2010	87		$	12.04
Granted	520		9.40
Vested	(94	)	11.58		$	1,078
Forfeited/Canceled	(50	)	9.59
Nonvested shares, December 31, 2011	463		$	9.42
Granted	1,536		8.70
Vested	(437	)	9.47		$	4,106
Forfeited/Canceled	(313	)	9.42
Nonvested shares, December 31, 2012	1,249		$	8.52
Granted	232		7.18
Vested	(581	)	9.13		$	4,438
Forfeited/Canceled	(410	)	7.74
Nonvested shares, December 31, 2013	490		$	7.80

At December 31, 2013 the aggregate intrinsic value of restricted stock awards was $3.7 million and the weighted average remaining contractual term was approximately 1 year.

Stock option activity (shares are in thousands):



	Options Outstanding				Weighted Average Grant Date Fair Value
	Number of Shares		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Outstanding, December 31, 2010	5,559		$	19.68
Options granted at common stock price	2,250		9.54		$	5.08
Options exercised	(210	)	10.57
Options cancelled	(1,234	)	14.72
Outstanding, December 31, 2011	6,365		$	14.24
Options granted at common stock price	1,422		8.29		$	3.71
Options exercised	(466	)	6.61
Options cancelled	(2,787	)	12.76
Outstanding, December 31, 2012	4,534		$	14.07
Options granted at common stock price	3,578		7.56		$	2.93
Options exercised	(24	)	5.56
Options cancelled	(1,463	)	15.76
Outstanding, December 31, 2013	6,625		$	10.21
Exercisable, December 31, 2013	2,293		$	14.82
Vested and expected to vest, December 31, 2013	5,353		$	10.81

As of December 31, 2013, the weighted average remaining contractual life of the options was as follows: outstanding options 5.4 years; exercisable options 3.4 years; and vested and expected to vest options 5.1 years.

As of December 31, 2013, the aggregate intrinsic value of the options was as follows: outstanding options $0.7 million; exercisable options $0.2 million; and vested and expected to vest options $0.6 million.

The aggregate intrinsic value of stock options exercised in 2013, 2012 and 2011 was $0.1 million, $1.0 million and $0.3 million.

Employee Stock Purchase Plan. Our Employee Stock Purchase Plan (ESPP) allows an eligible employee to purchase shares of our common stock at a price equal to 85 percent of the fair market value of the common stock at the end of the semi-annual offering periods, subject to certain limitations. Under the ESPP, 71,600, 102,700, and 110,000 shares were purchased during the years ended December 31, 2013, 2012 and 2011, respectively.

Retirement Savings Plan. We have a salary deferral plan (401(k) Plan) that covers substantially all employees. Eligible employees may contribute a portion of their eligible compensation to the plan up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws. During the years ended December 31, 2013, 2012, and 2011, we matched 50% of the first three percent of participating employees’ contributions, and contributed $0.8 million, $1.0 million, and $1.1 million, respectively, in matching contributions. We can terminate the matching contributions at our discretion. We have no other post-employment or post-retirement benefit plans.