Stock-Based Compensation

12 Months Ended

Dec. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 6 — Stock-Based Compensation

Stock Incentive Plan

As of December 31, 2012, the Company had two stock-based employee compensation plans, the Stock Incentive Plan (“Incentive Plan”) and the Employee Stock Purchase Plan (“ESPP”), both which were amended and restated in March 2012 and approved by the Company’s stockholders in May 2012. During 2007, the Company made an inducement grant outside of the Incentive Plan and ESPP to recruit a new employee to a key position within the Company. Stock-based compensation expense of $4,167 ($4,010 of expense related to the Incentive Plan, $157 of expense related to the ESPP) was recognized during 2012, while $4,772 ($4,589 of expense related to the Incentive Plan, $146 of expense related to the ESPP and $37 of expense related to the inducement grant) was recognized during 2011, and $6,302 ($5,961 of expense related to the Incentive Plan, $192 of expense related to the ESPP, and $149 of expense related to the inducement grant) was recognized during 2010.

Under the Incentive Plan, the Company may grant stock option awards and restricted stock awards to its employees, directors, and consultants. Stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Prior to March 1, 2011, stock option awards granted to employees generally vest 25% after one year and monthly thereafter on a pro rata basis over the next three years until fully vested after four years. Commencing in March 2011, stock option awards granted to employees generally vest 25% after each year until fully vested after four years. Stock option awards granted to non-employee directors of the Company generally vest over one year. Predominantly all stock option awards have contractual terms of 10 years. The vesting exercise provisions of all awards granted under the Incentive Plan are subject to acceleration in the event of certain stockholder-approved transactions, or upon the occurrence of a change in control as defined in the Incentive Plan. Under the Incentive Plan, the Company also grants shares of restricted common stock to employees that generally vest 25% after each year until fully vested after four years.

Related activity under the Incentive Plan is as follows:

							Weighted
							Average
	Awards			Options			Exercise
	Available			Outstanding			Price
Balance December 31, 2009		1,773			5,827		$	6.58
Plan amendment		1,300			—			—
Stock option awards granted		(1,550	)		1,550			6.68
Stock option awards exercised		—			(240	)		2.30
Stock option awards cancelled		335			(335	)		8.42
Balance December 31, 2010		1,858			6,802			6.66
Plan amendment		1,600			—			—
Restricted stock awards granted		(211	)		—			—
Restricted stock awards cancelled		8			—			—
Stock option awards granted		(1,830	)		1,830			3.97
Stock option awards exercised		—			(190	)		1.57
Stock option awards cancelled		584			(584	)		5.99
Balance December 31, 2011		2,009			7,858			6.21
Plan amendment		1,700			—			—
Restricted stock awards granted		(415	)		—			—
Restricted stock awards cancelled		86			—			—
Stock option awards granted		(1,617	)		1,617			4.65
Stock option awards exercised		—			(350	)		1.58
Stock option awards cancelled		1,052			(1,052	)		6.26
Balance December 31, 2012		2,815			8,073		$	6.09

For stock option awards granted under the Incentive Plan during 2012, 2011 and 2010, the fair value was estimated on the date of grant using a Black-Scholes option pricing model and the assumptions noted in the table below. The weighted average grant date fair value of these awards granted during 2012, 2011 and 2010 was $3.24, $2.64, and $4.65, respectively. The fair value of the stock option awards is amortized to expense over the vesting periods using a straight-line expense attribution method. The following explanations describe the assumptions used by the Company to value the stock option awards granted during 2012, 2011, and 2010. The expected life is based on the average of the assumption that all outstanding stock option awards will be exercised at full vesting and the assumption that all outstanding stock option awards will be exercised at the midpoint of the current date (if already vested) or at full vesting (if not yet vested) and the full contractual term. For 2011 and 2010, the expected volatility represents an average of the implied volatility on the Company’s publicly traded options, the volatility over the most recent period corresponding with the expected life, and the Company’s long-term reversion volatility. For 2012, the expected volatility represents the volatility over the most recent period corresponding with the expected life. The Company has assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be for the foreseeable future. The weighted average risk-free interest rate is the implied yield currently available on zero-coupon government issues with a remaining term equal to the expected term.

Weighted Average Assumptions for Stock Option Awards Granted under the Incentive Plan

	2012			2011			2010
Expected Life		5.4			5.5			5.5
Expected Volatility		87	%		80	%		89	%
Expected Dividend Yield		0.0	%		0.0	%		0.0	%
Risk-Free Interest Rate		0.9	%		2.2	%		2.4	%

The total intrinsic value of stock option awards exercised under the Incentive Plan was $877 during 2012, $374 during 2011, $1,169 and during 2010. The intrinsic value represents the total proceeds (fair market value at the date of exercise, less the exercise price, times the number of stock option awards exercised) received by all individuals who exercised stock option awards during the period.

The following table summarizes, at December 31, 2012, by price range: (1) for stock option awards outstanding under the Incentive Plan, the number of stock option awards outstanding, their weighted average remaining life and their weighted average exercise price; and (2) for stock option awards exercisable under the Plan, the number of stock option awards exercisable and their weighted average exercise price:

	Outstanding						Exercisable
			Weighted		Weighted				Weighted
			Average		Average				Average
			Remaining		Exercise				Exercise
Range	Number		Life		Price		Number		Price
$0 to 3		1,024		5.4	$	1.55		943	$	1.50
3 to 6		3,510		7.3		4.19		1,448		3.88
6 to 9		2,082		4.6		7.37		1,829		7.46
9 to 12		640		3.7		11.36		640		11.36
12 to 15		811		3.4		12.54		798		12.54
15 to 18		4		3.0		15.45		4		15.45
18 to 21		2		0.2		18.99		2		18.99
$0 to 21		8,073		5.7	$	6.09		5,664	$	6.72

The weighted average remaining contractual life of stock option awards exercisable under the Incentive Plan at December 31, 2012 was 5.7 years.

The aggregate intrinsic value of stock option awards outstanding and exercisable under the Incentive Plan at December 31, 2012 was $163. The aggregate intrinsic value represents the value (the period’s closing market price, less the exercise price, times the number of in-the-money stock option awards) that would have been received by all stock option award holders under the Incentive Plan had they exercised their stock option awards at the end of the year.

The total fair value of the stock option awards vested under the Incentive Plan was $3,373 during 2012, $4,775 during 2011, and $4,441 during 2010.

As of December 31, 2012, the number of stock option awards vested and expected to vest under the Incentive Plan is 7,535. The weighted average exercise price of these stock option awards is $6.18 and their weighted average remaining contractual life is 6.1 years.

The following table summarizes the changes in the number and weighted-average grant-date fair value of non-vested stock option awards during 2012:

	Non-Vested Stock  Option Awards			Weighted Average Grant-Date Fair Value
Balance December 31, 2011		2,733			3.04
Stock option awards granted		1,617			3.24
Stock option awards vested		(1,196	)		2.82
Stock option awards forfeited		(746	)		3.28
Balance December 31, 2012		2,408			3.18

As of December 31, 2012, there was approximately $6,272 of total unrecognized compensation cost related to non-vested employee stock option awards and restricted stock awards granted by the Company. That cost is expected to be recognized as follows: $2,959 in 2013, $2,010 in 2014, $1,148 in 2015, and $155 in 2016.

Employee Stock Purchase Plan

The Company has reserved a total of 975 shares of common stock to be purchased under the ESPP, of which 177 shares remain available for purchase at December 31, 2012. Eligible employees may authorize up to 15% of their salary to purchase common stock at the lower of 85% of the beginning or 85% of the ending price during six-month purchase intervals. No more than 3 shares may be purchased by any one employee at the six-month purchase dates and no employee may purchase stock having a fair market value at the commencement date of $25 or more in any one calendar year.

There were 110, 94, and 51 shares of common stock purchased under the ESPP in 2012, 2011, and 2010, respectively, at a weighted average price per share of $2.93, $3.21, and $5.50, respectively. Expense of $157, $146, and $192, related to the ESPP was recognized during 2012, 2011, and 2010, respectively. Compensation expense for shares purchased under the ESPP related to the purchase discount and the “look-back” option were determined using a Black-Scholes option pricing model. The weighted average grant date fair values of shares granted under the ESPP during 2012, 2011, and 2010, were $1.48, $1.33, and $2.76, respectively.