Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Leases

The Company leases its buildings under non-cancellable operating leases that expire on various dates through 2022. Future minimum annual lease payments under such leases as of March 31, 2012 are as follows (in thousands):

Year Ending December 31,	Operating
2012-9 months	$	1,931
2013		2,612
2014		2,607
2015		2,425
2016		2,130
2017		1,787
Beyond		6,314
Total	$	19,806

Rent expense under operating leases was $0.7 million for both three months ended March 31, 2012 and 2011.

As a condition of our new lease in Pittsburgh, the landlord agreed to incentives of $40.00 per square foot, or a total of $2.2 million, for improvements to the space. These costs have been included in deferred rent in our long-term liabilities and are being amortized over the remaining lease term.

Pennsylvania Opportunity Grant Program

On September 26, 2011, we received $1.0 million from the State of Pennsylvania to help fund our agreement to start-up a new facility. The grant carries with it an obligation, or commitment, to employ at least 232 people within a three-year time period. This grant contains conditions that would require us to return a pro-rata amount of the monies received if we fail to meet these conditions. As such, the monies have been recorded as a liability in the long-term liabilities line item on the balance sheet until we are irrevocably entitled to retain the monies.

Litigation

On June 29, 2011, a complaint was filed in the U.S. District Court for the Central District of California against us and certain of our current officers on behalf of certain purchasers of our common stock. The complaint has been brought as a purported stockholder class action, and, in general, includes allegations that we and certain of our officers violated federal securities laws by making materially false and misleading statements regarding our business prospects and financial results, thereby artificially inflating the price of our common stock. The plaintiff is seeking unspecified monetary damages and other relief. On August 29, 2011, two prospective lead plaintiffs filed motions for appointment of lead plaintiff and for appointment of lead counsel. On October 17, 2011, the court appointed the two prospective lead plaintiffs as co-lead plaintiffs and their respective counsel as co-lead counsel. On December 15, 2011, the co-lead plaintiffs filed their consolidated amended complaint. On February 14, 2012, defendants filed a motion to dismiss the consolidated amended complaint. Plaintiffs’ opposition was filed on April 2, 2012, and defendants’ filed a reply on May 1, 2012. A hearing on the motion to dismiss has been set for May 21, 2012. We intend to vigorously defend against the claims advanced.

On August 11, 2011, a shareholder derivative complaint was filed in the Superior Court of California for the County of Orange against the Company’s directors and certain of its executive officers. Thereafter, two additional similar complaints, also styled as shareholder derivative actions, were filed in state court (collectively, the “State Derivative Actions”). On December 23, 2011, one of the plaintiffs in the State Derivative Actions filed a motion to consolidate the State Derivative Actions and to appoint lead counsel. On February 14, 2012, the two other plaintiffs filed an opposition to this motion, and, on March 7, 2012, they filed their own motion to consolidate and appoint lead counsel. On March 29, 2012, the Court heard the motions, consolidated the three State Derivative Actions, and appointed lead counsel. On May 1, 2012, the Court held an initial Case Management Conference in the consolidated State Derivative Action, at which the Court approved the parties’ stipulation to stay the State Derivative Action pending full resolution of all motions to dismiss in the federal stockholder class action. Should the stay of the State Derivative Actions be lifted upon full resolution of all motions to dismiss in the federal stockholder class action, we expect plaintiffs to file an amended shareholder derivative complaint. On September 12, 2011, a shareholder derivative complaint was filed in the U.S. District Court for the Central District of California against certain of the officers and directors named in the State Derivative Actions but also against additional officers of the Company. Thereafter, two additional similar complaints, also styled as shareholder derivative actions, were filed in federal court (collectively, the “Federal Derivative Actions”). On December 6, 2011, the federal court consolidated the first two filed Federal Derivative Actions and appointed co-lead counsel for plaintiffs. On January 9, 2012, the plaintiff for the third filed federal derivative action requested dismissal of the third filed complaint, which the federal court granted on January 11, 2012. On January 27, 2012, plaintiffs in the Federal Derivative Actions filed their consolidated shareholder derivative complaint. On March 30, 2012, defendants filed a motion to dismiss the consolidated complaint. Plaintiff’s opposition is due May 14, 2012, and defendants’ reply is due June 15, 2012. A hearing on the motion to dismiss has been set for July 16, 2012. Collectively, the State Derivative Actions and the Federal Derivative Actions are referred to as the “Derivative Actions.” The shareholder derivative complaints in the Derivative Actions allege breaches of fiduciary duties by the defendants and other violations of state law. In general, the complaints in the Derivative Actions allege that the Company’s directors and certain of its officers caused or allowed for the dissemination of materially false and misleading statements regarding our business prospects and financial results, thereby artificially inflating the price of our common stock. Plaintiffs in the Derivative Actions seek unspecified monetary damages and other relief, including reforms and improvements to the Company’s corporate governance and internal procedures. We intend to vigorously defend against the claims advanced in the Derivative Actions, and intend to file demurrers and/or motion(s) to dismiss the shareholder derivative complaints in the Derivative Actions.

The Company is and may become involved in various other legal proceedings arising from its business activities. While management does not believe the ultimate disposition of these matters will have a material adverse impact on the Company’s consolidated results of operations, cash flows or financial position, litigation is inherently unpredictable, and depending on the nature and timing of these proceedings, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period.