Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

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

We maintain a stock-based compensation program intended to attract, retain and provide incentives for talented employees and directors and align stockholder and employee interests. Currently, we grant options and restricted stock units ("RSUs") from the 2005 Long-Term Incentive Plan ("2005 LTIP") and the 2010 Equity Compensation Plan (“2010 ECP”). Option and restricted stock unit vesting periods are generally up to three years. Options and restricted stock units generally vest based on either (i) continued service to the Company for a period of up to three years, or (ii) achieving performance goals.

For the three and nine months ended September 30, 2014, we recorded stock-based compensation expense for all equity incentive plans of $279,970 and $658,800, respectively, and $239,353 and $539,766 for the three and nine months ended September 30, 2013, respectively. Total compensation cost not yet recognized at September 30, 2014 was $736,704 to be recognized over a weighted-average recognition period of 0.8 years.

On April 1, 2014, we granted certain employees a total of 78,500 RSUs with a weighted average fair value of $0.78 per share. On April 1, 2014, we also granted employees a performance RSU that is dependent upon 2014 profitability. At September 30, 2014, the number of performance RSUs was 677,072 shares with a weighted average fair value of $.78 per share. The shares vest ratably over three years or upon achieving performance conditions. In the same quarter, we granted members of our board of directors a total of 102,560 RSUs with a weighted average fair value of $.78 a share which vest quarterly until March 31, 2015. In the first quarter of 2013, we granted employees a total of 100,000 RSUs with a weighted average fair value of $0.72 per share.

On March 31, 2013, some of our employees voluntarily canceled certain outstanding stock options for no consideration. As a result, 805,134 shares were canceled and returned to 2005 LTIP and 2010 ECP plans. The cancellation of these options resulted in the recognition of $49,577 in additional stock-based compensation expense, which represented the fair value of the canceled options that had not yet been recognized as of the date of cancellation.

The following table summarizes the stock grants outstanding under our 2005 LTIP and 2010 ECP plans as of September 30, 2014:



	Options Outstanding	RSUs Outstanding	Options and RSUs Exercised	Available Shares	Total
2010 ECP	250,498	907,874	1,108,353	1,419,220	3,685,945
2005 LTIP	33,748	407,721	542,364	16,167	1,000,000
Total	284,246	1,315,595	1,650,717	1,435,387	4,685,945

We also have 82,131 options outstanding with exercise prices from $16.01 to $35.58 under a separate plan which is not authorized to issue any additional shares.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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