Note 2. Long-Term Incentive Plans

3 Months Ended

Mar. 31, 2013

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

2.            LONG-TERM INCENTIVE PLANS

Pursuant to the 2008 Long-term Incentive Plan (the "Plan"), the Company may grant stock options (non-qualified or incentive), stock appreciation rights, restricted stock, restricted stock units and other share-based awards to employees, directors and other persons who serve the Company. The Plan is overseen by the Compensation Committee of the Board of Directors, which approves the timing and circumstances under which share-based awards may be granted. At March 31, 2013, there were 0.5 million shares available to be granted under the Plan. The Company issues new shares to satisfy the exercise or release of share-based awards. Under the provisions of Accounting Standards Codification Topic 718, Stock Compensation, all share-based payments are required to be recognized in the statement of operations based on their fair values at the date of grant.

The fair value of each option award is estimated using a Black-Scholes option valuation model. Expected volatility is based on the historical volatility of the price of the Company's stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. Options generally have a life of 10 years and have either time-based or performance-based vesting features. Time-based awards generally vest over a three year period, while the performance-based awards vest upon the achievement of specific performance targets. At March 31, 2013, there were 0.9 million options outstanding that will vest upon the achievement of certain financial conditions for 2013 or will expire if the performance criteria are not met. No expense was recognized for these awards. If in the future it is probable that these awards will be earned, the Company will commence recording an expense for them. The fair values of the options granted during the three months ended March 31, 2013 and 2012, were estimated based on the following weighted average assumptions:

	Three Months
	Ended March 31,
	2013			2012
Expected volatility		76.23	%		69.82	%
Risk-free interest rate		1.06	%		1.48	%
Expected dividend yield		0.00	%		0.00	%
Expected life (in years)		6.0			6.0
Estimated fair value per option granted	$	0.87		$	1.01

The following table presents a summary of the Company's stock option activity for the three months ended March 31, 2013:

	Number of Options
Outstanding at January 1, 2013		4,294,273
Granted		60,000
Exercised		(50,000	)
Forfeited and cancelled		(98,411	)
Outstanding at March 31, 2013		4,205,862

The Company also grants restricted stock units, or RSUs, that entitle the holder to a share of Company common stock. The fair value of an RSU is equal to the market value of a share of common stock on the date of grant. All RSUs that are currently outstanding have time-based vesting features over a one to three year period.

The following table presents a summary of the Company's RSU activity for the three months ended March 31, 2013:

	Shares
Nonvested at January 1, 2013		343,161
Granted		329,164
Vested and settled in shares		(168,995	)
Nonvested at March 31, 2013		503,330

The anticipated consummation of the business combination with Hego Aktiebolag as discussed in Note 8 to these Consolidated Financial Statements will constitute a change in control under the Company's long-term incentive plans. As a result, all outstanding equity awards will become immediately exercisable and fully vested, without regard to any time and/or performance vesting conditions. As a result, upon the anticipated closing of the transaction in the second quarter of 2013, the Company estimates it will record a charge of approximately $1.3 million, representing the unamortized expense related to the vesting of such equity awards. The estimated expense is subject to a number of assumptions and actual results may differ from these estimates.

In addition, each year the Company adopts a Management Incentive Compensation Plan (the "Incentive Plan") that entitles recipients to a combination of cash and equity awards based on achievement of certain performance and service criteria in the fiscal years for which the Incentive Plan is adopted. During the three months ended March 31, 2013 and 2012 the Company recorded an expense of $136 thousand and $73 thousand, respectively, associated with the equity portion of the awards under these Plans.

The impact on the Company's results of operations of recording share-based compensation expense is as follows (in thousands):

	Three Months
	Ended March 31,
	2013		2012
Cost of sales	$	17	$	19
Research and development		87		96
Selling, general and administrative		236		189
	$	340	$	304