STOCKHOLDERS' EQUITY (Notes)

9 Months Ended

Sep. 30, 2012

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

Stockholders' Equity

STOCKHOLDERS' EQUITY

Stock Incentive Plans

Under its stock incentive plans, the Company may grant stock awards or options to purchase the Company's common stock to employees, officers, directors (subject to certain restrictions) and consultants, generally at the market price on the date of grant. Current option grants become exercisable over various periods, typically four years for employees and one year for non-employee directors, and have a maximum term of seven years. Time-based restricted stock and restricted stock unit awards typically vest over four years. Shares available for issuance under the Company's Amended and Restated 2005 Stock Incentive Plan, which is the only plan the Company currently makes grants from, totaled 2,853,252 at September 30, 2012, including 317,347 shares that may alternatively be issued as awards of restricted stock or restricted stock units.

Information with respect to options granted under all stock option plans for the nine months ended September 30, 2012 is as follows:

	Shares		Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Options outstanding at December 31, 2011	5,367,145		$20.01
Granted (a)	2,010,400		$11.17
Exercised	(1,121	)	$9.55
Forfeited or canceled	(1,522,014	)	$16.78
Options outstanding at September 30, 2012 (b)	5,854,410		$17.81	4.22	$155,177
Options vested at September 30, 2012 or expected to vest	5,200,369		$17.84	4.19	$133,833
Options exercisable at September 30, 2012	2,260,515		$20.00	3.10	$2,194

(a) Options granted during the nine months ended September 30, 2012 included 111,000 options that had vesting based on performance conditions and 15,000 options that had vesting based on either market conditions or a combination of performance or market conditions.

(b) Options outstanding at September 30, 2012 included 1,763,155 options that had vesting based on either performance conditions, market conditions or a combination of performance and market conditions.

The following table sets forth the valuation weighted-average key assumptions and fair value results for stock options granted during the nine months ended September 30, 2012 and September 30, 2011 (Revised):

	Nine Months Ended September 30,
	2012	2011 (Revised)
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	0.94%	2.06%
Expected volatility	52.81%	41.2%
Expected life (in years)	4.56	4.48
Weighted-average fair value of options granted (per share)	$4.91	$7.63

During the nine months ended September 30, 2012, there were no material proceeds from option exercises. During the nine months ended September 30, 2011 (Revised), the aggregate intrinsic value of stock options exercised was approximately $1.1 million and the cash received from the exercise of stock options totaled $2.2 million. The Company did not realize any actual tax benefit from tax deductions for stock option exercises during the nine months ended September 30, 2012 or September 30, 2011 (Revised) due to the full valuation allowance on the Company's U.S. deferred tax assets.

Information with respect to non-vested restricted stock units for the nine months ended September 30, 2012 is as follows:

	Non-Vested Restricted Stock Units
	Shares		Weighted- Average Grant-Date Fair Value	Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Non-vested at December 31, 2011	822,033		$19.45
Granted (a)	352,500		$11.00
Vested	(232,572	)	$19.70
Forfeited	(241,339	)	$16.56
Non-vested at September 30, 2012 (b)	700,622		$15.86	3.21	$6,621
Expected to vest	607,928		$15.69	2.05	$5,745

(a) Restricted stock units granted during the nine months ended September 30, 2012 included 155,250 units that had vesting based on performance conditions.

(b) Non-vested restricted stock units at September 30, 2012 included 416,500 units that had vesting based on either performance conditions, or market conditions or a combination of performance and market conditions.

The following table sets forth the valuation weighted-average key assumptions for restricted stock units with vesting based on market conditions or a combination of performance or market conditions granted during the nine months ended September 30, 2011 (Revised). No restricted stock units with vesting based on market conditions or a combination of performance and market conditions were granted during the nine months ended September 30, 2012.

	Nine Months Ended September 30, 2011 (Revised)
Expected dividend yield	0.00%
Risk-free interest rate	3.9%
Expected volatility	41.5%
Expected life (in years)	3.04

The weighted-average grant date fair value of restricted stock units granted during the nine months ended September 30, 2011 (Revised) was $25.16. The total fair value of restricted stock units vested during the nine months ended September 30, 2012 and September 30, 2011 (Revised) was $4.6 million and $5.1 million, respectively.

Employee Stock Purchase Plan

The Company's Second Amended and Restated 1996 Employee Stock Purchase Plan (the “ESPP”) offers the Company's shares for purchase at a price equal to 85% of the closing price on the applicable offering period termination date. Shares issued under the ESPP are considered compensatory under ASC Subtopic 718-50, Compensation-Stock Compensation: Employee Stock Purchase Plans. Accordingly, the Company is required to assign fair value to, and record compensation expense for, share purchase rights granted under the ESPP.

The following table sets forth the valuation weighted-average key assumptions and fair value results for shares issued under the ESPP for the nine months ended September 30, 2012 and September 30, 2011 (Revised):

	Nine Months Ended September 30,
	2012	2011 (Revised)
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	0.08%	0.42%
Expected volatility	51.7%	42.1%
Expected life (in years)	0.25	0.24
Weighted-average fair value of shares issued (per share)	$1.45	$2.55

The following table sets forth the quantities and average prices of shares issued under the ESPP for the nine months ended September 30, 2012 and September 30, 2011 (Revised):

	Nine Months Ended September 30,
	2012	2011
Shares issued under the ESPP	100,320	67,342
Average price of shares issued under ESPP	$7.79	$13.46

A total of 512,187 shares remained available for issuance under the ESPP at September 30, 2012.

Stock-Based Compensation Expense

The Company estimates forfeiture rates at the time awards are made based on historical turnover rates and applies these rates in the calculation of estimated compensation cost. At September 30, 2012, the Company's annualized estimated forfeiture rates were 0% for non-employee director awards, 10% for executive management awards and 10% for awards to all other employees.

Stock-based compensation was included in the following captions in the Company's consolidated statements of operations for the three and nine months ended September 30, 2012 and December 31, 2011 (Revised), respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011 (Revised)		2012		2011 (Revised)
Cost of products revenues	$	79	$	168	$	283	$	417
Cost of services revenues	129		63		436		608
Research and development expenses	212		435		787		1,334
Marketing and selling expenses	620		1,051		1,818		3,625
General and administrative expenses	659		1,970		3,750		5,851
	$	1,699	$	3,687	$	7,074	$	11,835

As a result of the 2012 restructuring plan, certain time based stock options and restricted stock unit awards were accelerated resulting in $1.0 million of expense which was offset by $2.1 million of reduced expense due to the forfeiture of performance based options and restricted stock units. The net effect to operating expenses was a benefit of $1.1 million within marketing and selling expenses in the Company's consolidated statements of operations for the three and nine months ended September 30, 2012. During the three and nine month period ended September 30, 2012 it was determined that certain targets for performance based options would not be met prior to the expiration of their term. This resulted in a $0.8 million reduction in stock based compensation in the general and administrative expenses in the Company's consolidated statements of operations for the three and nine month period ended September 30, 2012. At September 30, 2012, there was approximately $19 million of total unrecognized compensation cost, before forfeitures, related to non-vested stock-based compensation awards granted under the Company's stock-based compensation plans.