Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 2 — Stock-Based Compensation

As of June 30, 2013, the Company had two stock-based employee compensation plans, the Stock Incentive Plan (“Incentive Plan”) and the Employee Stock Purchase Plan (“ESPP”), both of which were amended and restated in March 2012 and approved by the Company’s stockholders in May 2012. Stock-based compensation expense of $2,521 ($2,479 of expense related to the Incentive Plan and $42 of expense related to the ESPP) was recognized during the first six months of 2013, while $2,178 ($2,108 of expense related to the Incentive Plan and $70 of expense related to the ESPP) was recognized during the first six months of 2012.

There was approximately $5,720 of total unrecognized compensation cost related to non-vested stock option awards and restricted stock awards granted by the Company as of June 30, 2013. That cost is expected to be recognized as follows: $1,586 during the remainder of 2013, $2,421 in 2014, $1,291 in 2015, and $422 in 2016.

Stock Incentive Plan

The Company grants stock option awards and restricted stock awards to its employees, directors, and consultants under the Incentive Plan. Under the Incentive Plan, 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 March 1, 2011, stock option awards granted to employees generally vest 25% each year until fully vested after four years. In January 2013, the Company made retention grants of stock option awards and restricted stock. These awards vest 50% each year until fully vested after two years. Stock option awards granted to non-employee directors of the Company generally vest monthly over one year. All stock option awards have contractual terms of 5 to 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.

Related activity under the Incentive Plan is as follows:

	Awards Available			Options Outstanding			Weighted Average Exercise Price
Balance December 31, 2012		2,815			8,073		$	6.09
Restricted stock awards granted		(305	)		—			—
Restricted stock awards cancelled		29			—			—
Stock option awards granted		(2,003	)		2,003			1.43
Stock option awards exercised		—			(307	)		1.17
Stock option awards cancelled		1,088			(1,088	)		6.02
Balance June 30, 2013		1,624			8,681		$	5.20

For stock option awards granted under the Incentive Plan during the first six months of 2013 and 2012, 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 per share of the awards granted during the six months of 2013 and 2012 was $0.90 and $3.04, 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 table summarizes the key assumptions used by the Company to value the stock option awards granted during the first six months of 2013 and 2012. 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. The expected volatility represents the historical volatility on the Company’s publicly traded common stock. The Company has assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be paid 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 to

Employees and Directors under the Incentive Plan

	2013			2012
Expected Life in Years		4.6			5.5
Expected Volatility		83	%		87	%
Expected Dividend Yield		0.0	%		0.0	%
Risk-Free Interest Rate		0.6	%		0.9	%

Employee Stock Purchase Plan

The Company has reserved a total of 975 shares of common stock to be purchased under the ESPP, of which 128 shares remain available for purchase at June 30, 2013. 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. The Company issued 49 shares during the first six months of 2013 under the ESPP. 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.