Stock Plans

6 Months Ended

Jun. 30, 2012

Stock Plans [Abstract]

Stock Plans

Note 7 – Stock Plans

The Company has two active stock-based compensation plans as of June 30, 2012: the 2004 Employee Stock Purchase Plan and the 2005 Omnibus Equity Incentive Plan under which incentive stock options, non-qualified stock options, restricted stock awards and restricted stock units can be granted to employees and non-employee directors.

Stock Options

Compensation expense recognized from employee stock options for the three months ended June 30, 2012 and 2011 was $167,000 and $336,000, respectively, and $712,000 and $815,000 for the six months ended June 30, 2012 and 2011, respectively. Beginning in 2011, the Company ceased granting stock options and began granting restricted stock awards to employees as part of its annual equity incentive award program. The Company may determine to grant stock options in the future under the Incentive Plan.

Restricted Stock Awards

During the three months ended June 30, 2012 and 2011, the Company granted 1,700 and 2,900 shares, respectively, subject to restricted stock awards with an average grant date fair value per share of $8.90 and $16.46, respectively. During the six months ended June 30, 2012 and 2011, the Company granted 251,066 and 215,916 shares, respectively, subject to restricted stock awards with an average grant date fair value per share of $ 20.81 and $18.94, respectively. The following table summarizes the amount of compensation expense recognized for restricted stock awards for the three and six months ended June 30, 2012 and 2011 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Service-based restricted stock	$	368	$	234	$	847	$	465
Performance-based restricted stock		97		90		160		150
Total compensation expense recognized for restricted stock awards	$	465	$	324	$	1,007	$	615

Restricted Stock Units

Beginning in 2011, non-employee directors receive an annual restricted stock unit award as part of their annual retainer compensation, which vests one year from the date of grant. During the three months ended June 30, 2012 and 2011, no restricted stock units were granted. During the six months ended June 30, 2012 and 2011, non-employee directors were granted a total of 20,342 and 22,036 restricted stock units, respectively, with an average grant date fair value per share of $20.65 and $19.06, respectively.

Total compensation expense recognized for service-based restricted stock unit awards was $104,000 and $105,000 during the three months ended June 30, 2012 and 2011, respectively, and $210,000 and $163,000 for the six months ended June 30, 2012 and 2011, respectively.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (“ESPP”) permits substantially all employees to purchase common stock through payroll deductions, at 85% of the lower of the trading price of the stock at the beginning or at the end of each six month offering period commencing on January 1 and July 1. The number of shares purchased is based on participants’ contributions made during the offering period.

Compensation expense recognized for the ESPP for the three months ended June 30, 2012 and 2011 was $34,000 and $24,000, respectively, and $128,000 and $113,000 for the six months ended June 30, 2012 and 2011, respectively. The fair value of the ESPP shares was estimated using the Black-Scholes valuation model for a call and a put option with the following weighted-average assumptions:

	Three and Six Months Ended June 30,
	2012			2011
Expected dividends	$	—		$	—
Exercise price	$	16.24		$	18.89
Expected volatility		63	%		48	%
Average risk-free interest rate		0.06	%		0.19	%
Expected life/term (in years)		0.5			0.5
Fair value per share	$	5.26		$	5.51

Stock-based Compensation Expense

Compensation cost for restricted stock, restricted stock units, employee stock options and the ESPP included in cost of revenue; selling, general and administrative expense; and research and development expense is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Cost of revenue	$	238	$	84	$	380	$	203
Selling, general and administrative		411		597		1,374		1,242
Research and development		121		108		302		261
Total stock-based compensation expense	$	770	$	789	$	2,056	$	1,706