Stock-Based Compensation

1999 Stock Option Plan and 2002 Stock Incentive Plan

On May 13, 1999, the Company's board of directors adopted and the stockholders approved the 1999 Stock Option Plan (the "1999 Stock Plan"). A total of 5,000,000 shares of common stock were reserved for issuance under the 1999 Stock Plan.

On May 23, 2002, the board of directors adopted and the stockholders approved the 2002 Stock Incentive Plan and reserved an additional 10,000,000 shares of common stock for issuance under this plan. The 2002 Stock Incentive Plan replaced the 1999 Stock Plan and all available shares under the 1999 Stock Plan were transferred to the 2002 Stock Incentive Plan (collectively the "2002 Stock Plan"), resulting in 15,000,000 common shares reserved for issuance. On May 6, 2011, the Company's stockholders approved the amended and restated 2002 Stock Plan (the "Amended and Restated 2002 Stock Plan") to increase the number of shares reserved for issuance by approximately 3.8 million shares. As of December 31, 2011, there are 10,451,861 shares available for future grant.

The Amended and Restated 2002 Stock Plan provides for the granting of non-statutory and incentive stock options and restricted stock awards to, among other parties, employees, officers and directors of the Company. Restricted stock grants generally vest over a four-year period or, in the case of certain restricted stock grants to directors, over a two- to four-year period.

The following table summarizes stock option activity under the Company's stock plans for the years ended December 31, 2011, 2010 and 2009:



	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in years)	(in thousands)
Options outstanding at December 31, 2008	2,979,767		$	15.35
Granted	—		$	—
Exercised	(83,062	)	$	9.22
Forfeited/expired	(279,790	)	$	16.73
Options outstanding at December 31, 2009	2,616,915		$	15.40
Granted	—		$	—
Exercised	(244,344	)	$	9.23
Forfeited/expired	(341,394	)	$	31.95
Options outstanding at December 31, 2010	2,031,177		$	13.41
Granted	16,500		$	16.64
Assumed options from business combinations	1,320,290		$	1.92
Exercised	(504,323	)	$	9.47
Forfeited/expired	(426,926	)	$	13.66
Options outstanding at December 31, 2011	2,436,718		$	7.98	5.32	$	21,103
Options vested at December 31, 2011 and expected to vest after December 31, 2011	2,420,727		$	8.02	5.30	$	20,885
Options exercisable at December 31, 2011	1,755,732		$	10.11	4.04	$	11,685

The total intrinsic value of stock options exercised during the years ended December 31, 2011, 2010 and 2009 was $3.6 million, $979,000 and $193,000, respectively. The weighted-average estimated grant date fair value of stock options granted for the year ended December 31, 2011 was $13.40, which includes the weighted-average fair value of stock options assumed in business combinations of $13.50. Excluding stock options assumed in business combinations, the weighted-average estimated grant date fair value of stock options granted for the year ended December 31, 2011 was $5.69. There were no stock options granted or assumed in 2010 and 2009.

As of December 31, 2011 and 2010, there were $7,457,000 and $96,000, respectively, of total unrecognized stock-based compensation related to unvested stock options. The weighted-average remaining vesting period for stock options is two years.

Restricted Stock

The Company began granting restricted stock awards in 2008. Restricted stock awards granted to executive officers and certain of its employees generally vest over a four-year period. Restricted stock awards granted to directors generally vest over a two- to four-year period. If the employment of any recipient of a restricted stock grant terminates for any reason, the Company shall automatically reacquire any unvested shares without cost to the Company.

The following table summarizes activity for restricted stock awards during the years ended December 31, 2011, 2010 and 2009:



	Shares		Weighted-Average Grant Date Fair Value
Unvested at December 31, 2008	1,890,435		$	10.69
Granted	—		$	—
Vested	(321,500	)	$	12.98
Forfeited	(61,125	)	$	10.34
Unvested at December 31, 2009	1,507,810		$	10.22
Granted	883,000		$	9.72
Vested	(576,625	)	$	10.92
Forfeited	(200,562	)	$	11.00
Unvested at December 31, 2010	1,613,623		$	9.60
Granted	1,434,500		$	15.26
Assumed awards from business combinations	333,746		$	15.30
Vested	(662,566	)	$	10.78
Forfeited	(148,812	)	$	11.43
Unvested at December 31, 2011	2,570,491		$	13.08

The intrinsic value of unvested restricted stock awards at December 31, 2011, 2010 and 2009 was $41.9 million, $25.9 million and $15.3 million, respectively. The fair value of restricted stock that vested during the years ended December 31, 2011, 2010 and 2009 was $10.8 million, $6.6 million and $3.3 million, respectively. As of December 31, 2011 and 2010, there was $26.6 million and $13.1 million, respectively, of total unrecognized stock-based compensation related to unvested restricted stock awards. The weighted-average remaining vesting period is 2.4 years for these awards.

Employee Stock Purchase Plan

The Company commenced its Employee Stock Purchase Plan (the "Purchase Plan") in September 2007, which allows employees to purchase shares of the Company's common stock through payroll deductions of up to 20 percent of their annual, eligible compensation subject to certain Internal Revenue Code and Purchase Plan limitations. The Purchase Plan provides for the issuance of a cumulative maximum of 1.5 million shares of common stock. The price of common stock purchased under the Purchase Plan is equal to 85 percent of the lower of the fair market value of the common stock on the commencement date of each twelve-month offering period or the specified purchase date. For the years ended December 31, 2011, 2010 and 2009, 221,000 shares, 235,000 shares and 329,000 shares, respectively, were purchased under the Purchase Plan. For the years ended December 31, 2011, 2010 and 2009, stock-based compensation recognized under the Purchase Plan was $920,000, $776,000 and $972,000, respectively. As of December 31, 2011, there was $832,000 of unrecognized stock-based compensation related to the Purchase Plan which is expected to be recognized over a weighted-average period of approximately five months.

Valuation and Expense Information of Stock-Based Compensation

For the years ended December 31, 2011, 2010 and 2009, the Company recognized stock-based compensation of $14.0 million, $7.9 million and $8.9 million, respectively, in continuing operations. The following table summarizes, by consolidated statement of operations line item the impact of stock-based compensation and the related income tax benefits recognized for the years ended December 31, 2011, 2010 and 2009, (in thousands):



	Year Ended December 31,
	2011			2010			2009
Sales and marketing	$	3,320		$	1,280		$	1,907
General and administrative	7,829			5,815			6,034
Technology	2,873			849			928
Stock-based compensation	14,022			7,944			8,869
Related income tax benefits	(3,865		)	(2,977		)	(2,884		)
Stock-based compensation, net of tax benefits	$	10,157		$	4,967		$	5,985

There was no stock-based compensation recorded in discontinued operations for the year ended December 31, 2011 or 2010. Stock-based compensation of $400,000, net of tax, was recorded in discontinued operations for the year ended December 31, 2009. The Company has not capitalized as an asset any stock-based compensation for the years ended December 31, 2011, 2010 and 2009.

GAAP requires cash flows resulting from excess tax benefits to be classified as a financing activity. Excess tax benefits are realized tax benefits from tax deductions for exercised stock options in excess of the deferred tax asset attributable to the recognized stock-based compensation for such stock options. For the years ended December 31, 2011, 2010 and 2009, excess tax benefits of $2,364,000, $556,000 and $175,000, respectively, have been classified as a financing activity in the consolidated statements of cash flows.

The Company calculated the estimated fair value of each stock-based award on the date of grant using the Black-Scholes option-pricing model and the following weighted-average assumptions:



	Stock Options
	Year Ended December 31,
	2011		2010		2009
Risk-free interest rates	0.2	%	—	%	—	%
Expected lives (in years)	1.1		—		—
Dividend yield	—	%	—	%	—	%
Expected volatility	41	%	—		—



	Employee Stock Purchase Plan
	Year Ended December 31,
	2011		2010		2009
Risk-free interest rates	0.1	%	0.2	%	0.3	%
Expected lives (in years)	0.7		0.7		0.7
Dividend yield	—	%	—	%	—	%
Expected volatility	43	%	43	%	61	%

The risk-free interest rate used in the Company's fair value estimates are based on the implied yield available on U.S. Treasury securities with an equivalent remaining term. The Company estimated the expected life of each stock option granted in 2011 based on historical data of stock option exercises, cancellation and options outstanding for similarly issued stock options. The expected life of options granted under the Purchase Plan represents the weighted-average amount of time remaining in the twelve-month offering period. The Company's computation of expected volatility for the years ended December 31, 2011, 2010 and 2009 was based on a combination of historical and market-based implied volatility from traded options on the Company's common stock.