XML 29 R28.htm IDEA: XBRL DOCUMENT v2.4.0.8
STOCKHOLDERS' EQUITY, STOCK PLANS AND STOCK-BASED COMPENSATION EXPENSE (Tables)
 12 Months Ended
Dec. 31, 2013
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
RemainingContractualLife
(in years)
  
Aggregate
Intrinsic
Value
(in $ millions)(1)
 
Balances as of December 31, 2010
  
1,005,447
   
3,296,419
  
$
10.93
   
4.4
   
1.1
 
Options granted
  
(1,206,500
)
  
1,206,500
  
$
8.61
         
Options exercised
  
—
   
(207,624
)
 
$
5.92
         
Options cancelled (expired or forfeited)
  
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 (2)
  
1,910,000
   
—
   
—
         
Options granted
  
(921,500
)
  
921,500
  
$
7.04
         
Options exercised
  
—
   
(211,551
)
 
$
7.00
         
Options cancelled (expired or forfeited)
  
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
 
Options granted
  
(1,007,166
)
  
1,007,166
  
$
8.97
         
Options exercised
  
—
   
(612,210
)
 
$
8.16
         
Options cancelled (expired or forfeited)
  
391,033
   
(391,033
)
  
10.37
         
Stock awards granted
  
(399,997
)
  
—
   
—
         
Restricted stock units cancelled (expired or forfeited)
  
81,257
   
—
   
—
         
Balances as of December 31, 2013
  
709,483
   
3,792,162
  
$
9.42
   
4.2
  
$
5.1
 
Exercisable as of December 31, 2013
      
2,221,657
  
$
10.14
   
3.0
  
$
2.3
 
            
(1)
Based on the closing stock price of the Company’s stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010.
(2)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, 2013. The aggregate intrinsic amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised was $2.1 million in 2013, $397,000 in 2012, and $521,000 in 2011. The options outstanding and exercisable at December 31, 2013 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
 
$
6.54
   
19,292
   
2.30
   
19,292
  
$
6.54
 
$
6.88
   
628,329
   
5.54
   
239,088
   
6.88
 
$
7.11–$ 8.52
   
191,548
   
2.91
   
145,738
   
8.29
 
$
8.66
   
397,231
   
2.43
   
397,231
   
8.66
 
$
8.72
   
564,751
   
4.37
   
376,169
   
8.72
 
$
8.80
   
688,000
   
6.46
   
—
   
—
 
$
8.81–$9.74
   
231,978
   
5.46
   
56,522
   
9.39
 
$
10.24
   
491,137
   
3.36
   
446,826
   
10.24
 
$
10.43–$14.14
   
402,708
   
1.65
   
363,603
   
11.57
 
$
14.78–$25.73
   
177,188
   
1.61
   
177,188
   
19.85
 
$
6.54–$25.73
   
3,792,162
   
4.18
   
2,221,657
  
$
10.14
 
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)
  
Aggregate
Intrinsic Value(2)
(in thousands)
 
Outstanding at December 31, 2010
  
67,096
  
$
10.24
    
$
556
 
Granted
  
77,225
  
$
8.32
       
Vested (3)
  
(82,526
)
 
$
8.93
  
$
691
(4) 
    
Forfeited
  
(6,542
)
 
$
9.99
         
Outstanding at December 31, 2011
  
55,253
  
$
9.55
      
$
412
 
Granted
  
148,188
  
$
6.85
         
Vested (3)
  
(41,522
)
 
$
9.79
  
$
279
(5) 
    
Forfeited
  
(13,210
)
 
$
7.39
         
Outstanding at December 31, 2012
  
148,709
  
$
6.99
      
$
1,338
 
Granted
  
188,678
  
$
8.94
         
Vested (3)
  
(119,505
)
 
$
7.68
  
$
1,091
(6) 
    
Forfeited
  
(38,417
)
 
$
8.11
         
Outstanding at December 31, 2013
  
179,465
  
$
8.34
      
$
1,827
 
            
(1)Represents the value of the Company’s stock on the date that the restricted stock units vest.
(2)
Based on the closing stock price of the Company’s stock of $10.18 on December 31, 2013, $9.00 on December 31, 2012, $7.45 on December 30, 2011, and $8.29 on December 31, 2010.
(3)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.
(4)On the grant date, the fair value for these vested awards was $737,000.
(5)On the grant date, the fair value for these vested awards was $407,000.
(6)On the grant date, the fair value for these vested awards was $917,000.
Stock-based Compensation Expense
Stock-Based Compensation

Stock-based compensation expense for stock options, restricted stock units, stock awards and ESPP shares for the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands):

 
 
Year EndedDecember 31,
 
 
 
2013
  
2012
  
2011
 
Stock options
 
$
2,201
  
$
2,421
  
$
3,047
 
RSUs
  
631
   
501
   
775
 
PSUs
  
162
   
138
   
—
 
ESPP
  
116
   
100
   
85
 
Total stock-based compensation expense
 
$
3,110
  
$
3,160
  
$
3,907
 
Stock-based Compensation Expense by Department
Total stock-based compensation expense recorded by department during the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands):

 
 
Year EndedDecember 31,
 
 
 
2013
  
2012
  
2011
 
Cost of revenue
 
$
638
  
$
658
  
$
659
 
Sales and marketing
  
744
   
657
   
788
 
Research and development
  
397
   
514
   
698
 
General and administrative
  
1,331
   
1,331
   
1,762
 
Total stock-based compensation expense
 
$
3,110
  
$
3,160
  
$
3,907
 
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
 
 
 
2013
  
2012
  
2011
  
2013
  
2012
  
2011
 
Estimated fair value of grants during the year
 
$
3.22
  
$
2.47
  
$
3.10
  
$
2.84
  
$
2.16
  
$
2.06
 
Expected term (in years)(1)
  
4.30
   
4.17
   
4.15
   
0.50
   
0.50
   
0.50
 
Risk-free interest rate(2)
  
1.13
%
  
0.45
%
  
1.41
%
  
0.08
%
  
0.15
%
  
0.08
%
Volatility(3)
  
43
%
  
44
%
  
43
%
  
44
%
  
43
%
  
39
%
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.