Stockholders' Equity and Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stockholders' Equity and Stock-Based Compensation [Abstract]

STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

3. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Restricted Stock Awards

Lionbridge issued 1,721,618 and 179,716 shares of restricted common stock and restricted stock units, respectively, under the Company’s 2011 Stock Incentive Plan, during the six-month period ended June 30, 2012 representing a fair market value of $5.2 million. Of the total 1,901,334 shares of restricted common stock and restricted stock units issued in the six-month period ended June 30, 2012, 1,421,418 have restrictions on disposition which lapse over four years from the date of grant, 67,416 have restrictions on disposition which lapse over thirteen months from date of grant, and 412,500 restricted shares were granted to certain employees through the long-term incentive plan (the “LTIP”) as long-term performance-based stock incentive awards under the Corporation’s 2011 Stock Incentive Plan. Pursuant to the terms of the LTIP, restrictions with respect to the stock will lapse upon the achievement of revenue and/or profitability targets within the two calendar years from and including the year of grant. The grant date fair value of the shares is recognized over the requisite period of performance once achievement of criteria is deemed probable. On a quarterly basis, the Company estimates the likelihood of achieving performance goals and records expense accordingly. Actual results, and future changes in estimates, may differ substantially from the Company’s current estimates. If the targets are not achieved, the shares will be forfeited by the employee.

Stock-based Compensation

The Company recognizes expense for stock options, performance-based restricted stock awards and time-based restricted stock awards pursuant to the authoritative guidance of Accounting Standards Codification (“ASC”) 718, “Compensation—Stock Compensation”. Total compensation expense related to stock options, performance-based restricted stock awards and time-based restricted stock awards was $1.4 million and $1.4 million for the three-month periods ended June 30, 2012 and 2011, respectively, and $2.8 million and $2.5 million for the six-month periods ended June 30, 2012 and 2011, respectively, classified in the statement of operations line items as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Cost of revenue	$	38,000	$	28,000	$	66,000	$	52,000
Sales and marketing		276,000		247,000		550,000		444,000
General and administrative		1,088,000		1,097,000		2,157,000		1,949,000
Research and development		12,000		16,000		26,000		34,000
Total stock-based compensation expense	$	1,414,000	$	1,388,000	$	2,799,000	$	2,479,000

As of June 30, 2012, future compensation cost related to non-vested stock options, less estimated forfeitures, is approximately $1.2 million and will be recognized over an estimated weighted average period of approximately 2.7 years. Lionbridge currently expects to amortize $9.2 million of unamortized compensation in connection with restricted stock awards outstanding as of June 30, 2012 over an estimated weighted average period of approximately 2.5 years.