STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE (Tables)

12 Months Ended

Dec. 31, 2012

STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE [Abstract]

Equity Incentive Plan

Activity under the 1998 Plan and 2004 Equity Incentive Plan is summarized as follows:

				Options Outstanding
	Shares Available For Grant			Number of Shares			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in $ millions)(1)
Balances as of December 31, 2009		1,840,381			2,692,555		$	10.87		5.1		1.6
Options granted (2)		(961,500	)		961,500		$	10.14
Options exercised		—			(90,362	)	$	3.74
Options cancelled (expired or forfeited)(2)		267,274			(267,274	)	$	9.91
Stock awards granted		(146,291	)		—			—
Restricted stock units cancelled (expired or forfeited)		5,583			—			—
Balances as of December 31, 2010		1,005,447			3,296,419		$	10.93		4.4	$	1.1
Options granted (2)		(1,206,500	)		1,206,500		$	8.61
Options exercised		—			(207,624	)	$	5.92
Options cancelled (expired or forfeited)(2)		746,273			(746,273	)	$	13.40
Stock awards granted		(77,225	)		—			—
Restricted stock units cancelled (expired or forfeited)		6,542			—			—
Balances as of December 31, 2011		474,537			3,549,022		$	9.92		4.6	$	0.4
Additional shares reserved (3)		1,910,000			—			—
Options granted (2)		(921,500	)		921,500		$	7.04
Options exercised		—			(211,551	)	$	7.00
Options cancelled (expired or forfeited)(2)		470,732			(470,732	)		9.45
Stock awards granted		(314,159	)		—			—
Restricted stock units cancelled (expired or forfeited)		24,746			—			—
Balances as of December 31, 2012		1,644,356			3,788,239		$	9.44		4.3	$	2.6
Exercisable as of December 31, 2012					2,224,660		$	10.50		3.3	$	0.8

(1) Based on the closing stock price of the Company's stock of $9.00 on December 31, 2012, $7.45 on December 30, 2011 and $8.29 on December 31, 2010.

(2) Included in options granted and options cancelled are shares granted and cancelled in connection with the Company's Option Exchange Program in 2009.

(3) Approved by stock holders in 2012.

Options Outstanding and Exercisable Price Ranges

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the Company's closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2012. The aggregate intrinsic amount changes based on the fair market value of the Company's common stock. Total intrinsic value of options exercised was $397,000 in 2012, $521,000 in 2011, and $128,000 in 2010. The options outstanding and exercisable at December 31 of the respective year were in the following exercise price ranges:

		Options Outstanding			Options Exercisable
Range of Exercise Prices		Number Outstanding	Weighted-Average Remaining Contractual Life (in years)		Number Outstanding	Weighted-Average Exercise Price
$	4.25–$ 6.54	81,180		1,51	79,283	$	5.14
$	6.88–$ 6.88	765,500		6.56	—		—
$	7.11–$ 8.49	427,626		3.56	317,441		8.37
$	8.52–$ 8.52	18,000		6.05	2,708		8.52
$	8.66–$ 8.66	518,596		3.41	475,115		8.66
$	8.72–$8.72	694,758		5.38	286,635		8.72
$	8.75–$9.74	102,000		5.19	54,563		9.28
$	10.24–$10.24	557,917		4.35	386,253		10.24
$	10.43–$14.14	411,033		1.97	411,033		11.81
$	14.78–$25.73	211,629		1.85	211,629		20.47
$	4.25–$25.73	3,788,239		4.34	2,224,660	$	10.50

Restricted Stock Units Activity

Information with respect to restricted stock units' activity is as follows (in thousands):

	Number of Shares			Weighted-Average Grant- Date Fair Value		Aggregate Fair Value (1) (in thousands)
Outstanding at December 31, 2010		67,096		$	10.24
Granted		77,225		$	8.32
Vested(2)		(85,526	)	$	8.93	$	691	(3)
Forfeited		(6,542	)	$	9.99
Outstanding at December 31, 2011		55,253		$	9.55
Granted		148,188		$	6.85
Vested(2)		(41,522	)	$	9.79	$	279	(4)
Forfeited		(13,210	)	$	7.39
Outstanding at December 31, 2012		148,709		$	6.99

(1)	Represents the value of the Company's stock on the date that the restricted stock units vest.
(2)	The number of restricted stock units vested includes shares that the Company withheld on behalf of the employees to satisfy the statutory tax withholding requirements.
(3)	On the grant date, the fair value for these vested awards was $737,000.
(4)	On the grant date, the fair value for these vested awards was $407,000.

Stock-based Compensation Expense

Stock-based compensation expense for stock options, restricted stock units, stock awards and ESPP shares for the year ended December 31, 2012, 2011 and 2010 was as follows (in thousands):

	Year EndedDecember 31,
	2012		2011		2010
Stock options	$	2,421	$	3,047	$	3,628
RSUs		501		775		927
PSUs		138		—		—
ESPP		100		85		95
Total stock-based compensation expense	$	3,160	$	3,907	$	4,650

Stock-based Compensation Expense by Department

Total stock-based compensation expense recorded by department during the year ended December 31, 2012, 2011 and 2010 was as follows (in thousands):

	Year EndedDecember 31,
	2012		2011		2010
Cost of revenue	$	658	$	659	$	724
Sales and marketing		657		788		1,189
Research and development		514		698		629
General and administrative		1,331		1,762		2,108
Total stock-based compensation expense	$	3,160	$	3,907	$	4,650

Valuation Assumptions and Fair Value of Stock Option and ESPP Grants

The Company uses the Black-Scholes option pricing model to estimate the fair value of options granted under its equity incentive plans and rights to acquire stock granted under its employee stock purchase plan. The Company based the weighted average estimated values of employee stock option grants and rights granted under the employee stock purchase plan, as well as the weighted average assumptions used in calculating these values, on estimates at the date of grant, as follows:

	Stock Options									Stock Purchase Plan
	2012			2011			2010			2012			2011			2010
Estimated fair value of grants during the year	$	2.47		$	3.10		$	3.76		$	2.16		$	2.06		$	2.41
Expected term (in years)(1)		4.17			4.15			3.84			0.50			0.50			0.50
Risk-free interest rate(2)		0.45	%		1.41	%		1.73	%		0.15	%		0.08	%		0.2	%
Volatility(3)		44	%		43	%		46	%		43	%		39	%		40	%
Dividend yield(4)		—	%		—	%		—	%		—	%		—	%		—	%

(1) The expected term represents the period during which the Company's stock-based awards are expected to be outstanding. The estimated term is based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting requirements, and expectation of future employee behavior, including post-vesting terminations.

(2) The risk-free interest rate is based on U.S. Treasury debt securities with maturities close to the expected term of the option as of the date of grant.

(3) Estimated volatility is based on historical volatility. The Company also considers implied volatility when there is sufficient volume of freely traded options with comparable terms and exercise prices in the open market.

(4) The Company has not historically issued any dividends and does not expect to do so in the foreseeable future.