Accounting for stock-based compensation

9 Months Ended

Sep. 30, 2012

Accounting for stock-based compensation [Abstract]

Accounting for stock-based compensation

4. Accounting for stock-based compensation

Total stock-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2012 and 2011 was as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Stock-based compensation	$	3,820	$	3,321	$	9,770	$	8,023

The Company issued stock awards to employees during the three months ended September 30, 2012 primarily with a four-year vesting schedule. The grant date fair value of the 1,190,600 restricted stock units and 1,798,000 stock options issued were $2.8 million and $2.7 million, respectively, with a grant date fair value per share of $2.32 and $1.54, respectively.

The Company uses the Black-Scholes option valuation model to estimate the grant date fair value of employee stock options. Restricted stock units are valued based on the market price on the grant date. The Company calculated the fair value of employee stock options for the three months ended September 30, 2012 using the following assumptions:

	Performance-based	Time-based
Risk-free interest rate	0.20% — 0.29%	0.83%
Expected lives	0.96 — 1.87 years	6.08 years
Volatility	62.35% — 70.56%	81.81%
Dividends	—	—

As of September 30, 2012, there was $14.5 million and $12.7 million of unrecognized compensation expense related to options and restricted stock units, respectively, which are expected to be recognized over the remaining weighted average vesting period of 2.2 years. The Company evaluates stock awards with performance conditions as to the probability that the performance conditions will be met and estimates the date at which the performance conditions will be met in order to properly recognize stock-based compensation expense over the requisite service period. As of September 30, 2012, there was $107,000 and $3.7 million of unrecognized expenses related to performance-based options and restricted stock units, respectively, for milestones not considered probable of achievement.