Stockholders' Equity

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Stockholders' Equity

13. Stockholders’ Equity

Share repurchases

On October 23, 2013, the Company’s Board of Directors approved a share repurchase program of up to $50.0 million of the Company’s outstanding shares of common shares over the next two years. Intended to offset shareholder dilution, the Company expects purchases under the program will be made periodically, on the open market as business and market conditions warrant. The share repurchase program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or discontinued at management’s and/or the Board of Director’s discretion. As of December 31, 2013, the Company repurchased 75,000 shares of its common stock for an aggregate purchase price of $2.2 million, including brokers’ fees.

Stock Compensation Plans

In November 2004, the Company’s stockholders approved the 2004 Stock Option and Grant Plan, or the 2004 Award Plan. The 2004 Award Plan provides long-term incentives and rewards to full-time and part-time officers, directors, employees, consultants, advisors and other key persons (collectively, “Key Persons”) who are responsible for, or contribute to, the management, growth or profitability of the Company. Options and stock grants issued under the 2004 Award Plan generally vest over a four year period and expire ten years from the date of grant. The Company has granted incentive stock options, nonqualified stock options and restricted stock awards under the 2004 Award Plan. As of December 31, 2012, 2,591,204 options and 2,810,403 restricted stock awards have been granted under the 2004 Option Plan. There will be no future grants of awards from the 2004 Award Plan. Pursuant to the terms of our 2004 Award Plan, we have the right to repurchase unvested restricted shares from employees upon their termination, and it is generally our policy to do so. In the years ended December 31, 2013, 2012 and 2011, we did not repurchase any shares of unvested restricted stock pursuant to the 2004 Award Plan.

In March 2007, the Company’s Board of Directors approved the adoption of the Company’s 2007 Stock Option and Incentive Plan, which was subsequently approved by stockholders in May 2007 and became effective on July 24, 2007. On March 30, 2011, the Company’s Board of Directors approved an amendment and restatement of the 2007 Stock Option and Incentive Plan, or 2007 Award Plan, which was subsequently approved by stockholders on May 13, 2011. The 2007 Award Plan permits the Company to make grants of incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to Key Persons. A total of 6,383,560 shares of common stock have been authorized for issuance of awards under the 2007 Award Plan, subject to adjustment for any stock split, dividend or other change in the Company’s capitalization. In addition, shares that are forfeited or cancelled from awards under the 2004 Award Plan or the 2007 Award Plan will be available for future grants under the 2007 Award Plan. The number of shares authorized for issuance under the 2007 Award Plan increased by 2,000,000 shares from 4,383,560 in May 2011 in connection with the shareholder approval of the amended and restated 2007 Award Plan. Stock options granted under the 2007 Award Plan have a maximum term of ten years from the date of grant and generally vest over four years. Option awards granted under the 2007 Award Plan must have an exercise price of no less than the fair market value of the common stock on the date of grant. As of December 31, 2013, 4,599,746 options and 1,013,280 restricted stock awards have been granted under the 2007 Award Plan. Pursuant to the terms of our 2007 Award Plan, we automatically reacquire any unvested restricted shares at their original price from the grantee upon termination of employment. In the years ended December 31, 2013, 2012 and 2011, we repurchased 13,314 shares, 17,574 shares and 3,011 shares, respectively, of unvested restricted common stock pursuant to the 2007 Award Plan.

On December 7, 2010 the Company’s Management Development and Compensation Committee approved the 2010 Inducement Stock Plan, or 2010 Inducement Plan, in connection with our acquisition of Ascender. The Company is permitted to issue equity awards to individuals in certain circumstances in accordance with Marketplace Rule 5635(c)(4) of the NASDAQ Stock Market, Inc., without prior shareholder approval. The Company established the 2010 Inducement Plan for such purpose. The 2010 Inducement Plan permits the Company to make grants of non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock awards and unrestricted stock awards to induce highly qualified prospective officers and employees, who are not employed by the Company and its subsidiaries, on the date of grant to accept employment and to provide them with a proprietary interest in the Company. The Company has reserved 700,000 shares of common stock for issuance of awards under the plan. Shares of stock underlying any award that is forfeited, canceled, held back upon the exercise of an option, settlement of tax withholding or otherwise terminated shall be added back to the shares of stock available for issuance under the 2010 Inducement Plan. Stock options granted under the 2010 Inducement Plan have a maximum term of ten years from the date of grant and generally vest over four years. Option awards granted under the 2010 Inducement Plan must have an exercise price of no less than the fair market value of the common stock on the date of grant. As of December 31, 2013, 227,490 options and 104,888 restricted stock awards have been granted under the 2010 Inducement Plan. Pursuant to the terms of our 2010 Inducement Plan, we automatically reacquire any unvested restricted shares at their original price from the grantee upon termination of employment. In the year ended December 31, 2013, we repurchased 415 shares of our common stock in accordance with the 2010 Inducement Plan. We did not repurchase any shares of our common stock in accordance with the 2010 Inducement Plan in the years ended December 31, 2012 or 2011.

Share Based Compensation

The following presents the impact of share based compensation expense on our consolidated statements of income (in thousands):

	Year Ended December 31,
	2013		2012		2011
Marketing and selling	$	3,780	$	3,068	$	2,966
Research and development		1,910		1,589		1,612
General and administrative		2,519		2,261		2,396
Total share based compensation	$	8,209	$	6,918	$	6,974

As of December 31, 2013, the Company had $15.0 million of unrecognized compensation expense related to employees and directors unvested stock option awards and restricted share awards that are expected to be recognized over a weighted-average period of 1.9 years.

Stock Option Awards

Stock option activity for all plans for the year ended December 31, 2013 is presented below:

	Number of Shares			Weighted- Average Price per Share		Aggregate Intrinsic Value (1) (in thousands)		Weighted- Average Remaining Contractual Life (in Years)
Outstanding at December 31, 2012		4,032,433		$	10.00
Granted		497,580		$	22.35
Exercised		(1,788,274	)	$	9.01
Expired		(187	)	$	11.48
Forfeited		(37,921	)	$	16.16
Outstanding at December 31, 2013		2,703,631		$	12.84	$	51,421		6.4
Exercisable at December 31, 2013		1,695,968		$	10.02	$	37,044		5.2
Vested and expected to vest at December 31, 2013 (2)		2,636,118		$	12.72	$	50,458

(1) The aggregate intrinsic value is calculated as the positive difference between the exercise price of the underlying options and the quoted price of our shares of common stock on December 31, 2013.

(2) Represents the number of vested options as of December 31, 2013, plus the number of unvested options at December 31, 2013 that are ultimately expected to vest based on our estimated forfeiture rate.

The aggregate intrinsic value of exercised options in the years ended December 31, 2013, 2012 and 2011 was $25.8 million, $6.8 million and $6.0 million, respectively.

Unvested Share Awards

Unvested share activity for the year ended December 31, 2013 is presented below:

	Shares			Weighted- Average Fair Value Per Share
Unvested shares outstanding at December 31, 2012		571,679		$	12.82
Granted		276,279		$	22.54
Vested		(266,115	)	$	12.44
Forfeited		(13,729	)	$	16.40
Unvested shares outstanding at December 31, 2013		568,114		$	17.64

The fair value of shares vested during 2013, 2012 and 2011 was $6.6 million, $3.2 million and $2.5 million, respectively.