EQUITY INCENTIVE PLANS

12 Months Ended

Dec. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

EQUITY INCENTIVE PLANS

10. EQUITY INCENTIVE PLANS

During 2011, our stockholders approved an amendment to the Equity Incentive Plan to increase the number of shares available to 15,500,000. All shares are awarded at the discretion of our Board of Directors in a variety of stock based forms including stock options, restricted stock and performance based stock units. Pursuant to the Equity Incentive Plan, incentive stock options may not be granted at less than the fair market value of our common stock at the date of the grant, and the option term may not exceed ten years. Stock options issued pursuant to the Equity Incentive Plan generally vest over four years. For holders of 10% or more of our voting stock, options may not be granted at less than 110% of the fair market value of the common stock at the date of the grant, and the option term may not exceed five years. Stock appreciation rights granted in tandem with an option shall have an exercise price not less than the exercise price of the related option. As of December 31, 2012, no stock appreciation rights have been issued. At December 31, 2012, there were 3,521,735 shares available for future grant under the Equity Incentive Plan.

During 2011, our stockholders approved an amendment to the Director Plan to increase the number of shares available to 950,500. Under the terms of the Director Plan, options to purchase shares of common stock are automatically granted (A) to the Chairman of the Board of Directors (1) upon his or her initial election or appointment in the amount of 25,000 and vesting over three years and (2) upon his or her re-election or continuation on our board immediately after each annual meeting of stockholders in the amount of 25,000 and vesting immediately, and (B) to each other Director (1) upon his or her initial election to our board in the amount of 30,000 and vesting over three years and (2) upon his or her re-election or continuation on our board in the amount of 15,000 and vesting immediately. All options granted pursuant to the Director Plan have a term of ten years with exercise prices equal to fair market value on the date of grant. Through December 31, 2012, options to purchase 947,500 shares of common stock have been granted under this plan of which 615,000 shares are currently exercisable. As of December 31, 2012, 212,000 shares are available for future grant.

Option activity under the Plans for the years ended December 31, 2010, 2011 and 2012 was as follows:

Stock Options	Number of Shares			Weighted Average Exercise Price
Outstanding as of December 31, 2009		5,215,189		$	6.04
Granted		1,548,650			3.74
Exercised		(83,023	)		3.42
Cancelled		(324,989	)		10.37
Outstanding as of December 31, 2010		6,355,827		$	5.29
Granted		1,675,950			6.69
Exercised		(728,811	)		5.41
Cancelled		(755,523	)		7.88
Outstanding as of December 31, 2011		6,547,443		$	5.34
Granted		1,453,468			7.72
Exercised		(278,545	)		4.85
Cancelled		(564,908	)		7.20
Outstanding as of December 31, 2012		7,157,458		$	5.70
Exercisable as of December 31, 2012		4,428,151		$	5.17
Weighted average grant-date fair value of options granted during the year ended December 31, 2012				$	4.67

The following table summarizes information about options outstanding at December 31, 2012:

	Options Outstanding
							Options Exercisable
Range of Exercise Prices	Number Outstanding at December 31, 2012		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Exercisable as of December 31, 2012		Weighted Average Exercise Price
$2.35–2.80		18,000		5.9	$	2.48		17,000	$	2.46
2.80–5.60		2,859,287		5.4		3.92		2,319,636		4.01
5.60–8.40		4,203,171		6.6		6.86		2,014,515		6.39
8.40–11.20		77,000		4.4		9.09		77,000		9.09
		7,157,458		6.1	$	5.70		4,428,151	$	5.17

The aggregate intrinsic value of options outstanding at December 31, 2012 was $6, all related to exercisable options. The weighted average grant date fair value of options granted in year ended December 31, 2012, 2011 and 2010 was $4.67, $3.99, and $2.24, per share, respectively. The intrinsic value of options exercised in the year ended December 31, 2012, 2011, and 2010 was $604, $963, and $213, respectively.

Shares vested, expected to vest and exercisable at December 31, 2012 are as follows:

	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Vested and unvested expected to vest at December 31, 2012		6,991,763	$	5.70		6.1	$	6
Exercisable at December 31, 2012		4,428,151	$	5.17		4.8	$	6

The total compensation cost not yet recognized as of December 31, 2012 related to non-vested option awards was $7,218 which will be recognized over a weighted-average period of 2.3 years. During the year ended December 31, 2012, there were 400,850 shares forfeited with a weighted average grant date fair value of $3.91 per share. The weighted average remaining contractual life for options exercisable at December 31, 2012 was 4.8 years.

In 2009, we granted 412,200 shares of restricted stock to employees, vesting annually over a four year period. In 2008 we granted 103,316 shares of restricted stock to employees, vesting annually over a four year period and 125,000 shares vesting annually over a two year period. The shares of restricted stock were issued at no cost to the recipients. The weighted average fair value of the restricted stock at the time of grant in 2009 and 2008 was $3.54 and $4.31 respectively, per share, and is being expensed ratably over the vesting period. Through December 31, 2012, 69,495 shares have been forfeited, and 491,226 shares have vested. We recognized share-based compensation expense related to restricted stock of $257, $358 and $389 for the year ended December 31, 2012, 2011 and 2010, respectively.

Restricted stock activity under the Plan for the year ended December 31, 2012 was as follows:

Restricted Stock	Number of Shares			Weighted Average Grant Date Fair Value
Unvested as of December 31, 2011		195,979		$	3.65
Granted		—			—
Vested		(107,634	)		3.74
Cancelled		(8,550	)		3.54
Unvested as of December 31, 2012		79,795		$	3.54

The fair value of restricted stock vested in 2012, 2011 and 2010 was $223, $800 and $449, respectively.

In July 2010, the Company amended its chief executive officer’s (the “CEO’s”) employment agreement to grant the CEO 100,000 stock options, of which 25% vested upon grant and 25% vest annually over the next three years, and a maximum of 390,000 performance-based stock units that vest upon the achievement of certain performance and market based targets. In February 2012, the Company amended its chief medical officer’s (the “CMO’s”) employment agreement to grant the CMO 50,000 performance-based stock units that vest upon the achievement of certain performance based targets. Through December 31, 2012 no expense has been recorded for these performance-based stock units.

In March 2013, the Company amended its chief operating officer’s (the “COO’s”) employment agreement to grant the COO 125,000 performance-based stock units that vest upon the achievement of certain performance based targets. In March 2013, the Company amended its CMO’s employment agreement to grant the CMO 120,000 performance-based stock units that vest upon the achievement of certain performance based targets.

In 1996, the stockholders adopted the Purchase Plan. This plan enables eligible employees to exercise rights to purchase our common stock at 85% of the fair market value of the stock on the date the right was granted or the date the right is exercised, whichever is lower. Rights to purchase shares under the Purchase Plan are granted by the Board of Directors. The rights are exercisable during a period determined by the Board of Directors; however, in no event will the period be longer than twenty-seven months. The Purchase Plan is available to substantially all employees, subject to certain limitations. In 2011, our stockholders approved an amendment to the Purchase Plan to increase the aggregate number of shares of the Company’s common stock that may be issued to 2,400,000. As of December 31, 2012, 1,814,967 shares have been purchased and 585,033 shares are available for future sale under the Purchase Plan. We recognized share-based compensation expense related to the Purchase Plan of $159, $165 and $248 for the year ended December 31, 2012, 2011 and 2010, respectively.