SHARE BASED COMPENSATION

6 Months Ended

Jun. 30, 2011

SHARE BASED COMPENSATION

7. SHARE BASED COMPENSATION

Stock based compensation is recognized in accordance with FASB ASC 718-10, Stock Compensation. Companies are required to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards (the “fair-value-based” method).

Stock Options and restricted stock expected to vest are determined by applying the pre-vesting forfeiture rate assumptions to total outstanding stock options and restricted stock.

Total share-based compensation for the three months and six months ended June 30, 2011 and 2010 are summarized in the following table (amounts in thousands):

	Three Months  Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
Stock options	$	244	$	—	$	417	$	—
Restricted stock units / Restricted stock awards		1,186		1,482		1,926		3,198
Employee stock purchase plan		20		—		50		—
	$	1,450	$	1,482	$	2,393	$	3,198

During the six months ended June 30, 2011, 0.4 million shares of restricted stock and approximately 0.4 million options to purchase common stock, valued at $2.9 million and $1.3 million, respectively, were granted to employees and non-employee members of the Board of Directors.

We determine the fair value of restricted stock units and awards at the date of grant based on the value of our common stock. We determine the fair value of our stock option awards at the date of grant using a Black-Scholes valuation model. This model requires us to make assumptions and judgments on the expected volatility, dividend yield, the risk-free interest rate and the expected term of our option. We utilized the following assumptions for stock options granted:

	Six Months Ended June  30, 2011
Valuation Assumptions
Risk-Free Rate		2.3	%
Expected Volatility		47.6	%
Expected Term (years)		4.8
Dividend Yield		—

The following table summarizes the stock option activity under all plans from January 1, 2011 through June 30, 2011:

	Options
Outstanding at January 1, 2011		4,681,196
Granted		376,669
Exercised		(191,015	)
Forfeited		(61,122	)
Outstanding at June 30, 2011		4,805,728

The table below summarizes the activity for the shares outstanding for the Company’s restricted stock units and restricted stock awards during the six months ended June 30, 2011:

	Restricted Stock Units			Restricted Stock Awards
Outstanding at January 1, 2011		1,891,881			—
Granted		42,000			354,640
Exercised / Delivered		(73,434	)		—
Forfeited		(44,067	)		(1,000	)
Outstanding at June 30, 2011(1)		1,816,380			353,640

(1) The outstanding restricted stock units include approximately 1.5 million restricted stock units which are vested, but the underlying shares of stock have not yet been delivered. Delivery of the underlying shares of stock will occur on the earlier of December 31, 2014 or the date at which the employee ceases to be employed by, or provide services to, the Company.