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Stock Option Plans and Share-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule share-based compensation costs
The impact on our results for share-based compensation was as follows (in thousands):
 
Years Ended December 31,
 
2013
 
2012
 
2011
Cost of product and service revenues
$
1,241

 
$
1,011

 
$
1,398

Research and development
1,359

 
889

 
1,269

Selling, general and administrative
8,551

 
7,314

 
6,832

Total share-based compensation expense
$
11,151

 
$
9,214

 
$
9,499
Schedule of valuation assumptions
The weighted average assumptions used for options granted and ESPP in 2013, 2012 and 2011 were as follows:
 
Years Ended December 31,
Stock Option Plans
2013
 
2012
 
2011
Risk-free interest rate(1)
1.2
%
 
0.9
%
 
1.6
%
Dividend yield
—
%
 
—
%
 
—
%
Volatility(2)
43.1
%
 
45.8
%
 
48.5
%
Expected life(3)
5.3 yrs

 
5.2 yrs

 
5.2 yrs


 
Years Ended December 31,
Employee Stock Purchase Plan
2013
 
2012
 
2011
Risk-free interest rate(1)
0.2
%
 
0.2
%
 
0.5
%
Dividend yield
—
%
 
—
%
 
—
%
Volatility(2)
35.1
%
 
38.5
%
 
40.2
%
Expected life(3)
0.5 - 2 yrs

 
0.5 - 2 yrs

 
0.5 - 2 yrs

_______________________________________________________________________________

(1)
The risk-free interest rate for both stock options and the ESPP is based on the zero-coupon U.S. Treasury rate curve in effect at the time of the option grant or at the beginning of the ESPP offering period.
(2)
Expected volatility for both stock options and the ESPP reflects a combination of historical and market-based implied volatility consistent with ASC 718 and SEC Staff Accounting Bulletin 107. We determined that the combination of historical and market-based implied volatility provides a more accurate reflection of our market conditions and is more representative of future stock price trends than employing solely historical volatility.
(3)
Represents the period of time that options granted are expected to be outstanding, which is derived from historical data on employee exercise and post-vesting employment termination behavior.
Schedule of stock options activity
A summary of option activity under the 2009 Plan for the years ended December 31, 2013, 2012 and 2011 is presented below:
Options:
Number of Shares
 
Weighted Average
Exercise Price
 
(in thousands)
 
 
Outstanding at December 31, 2010
4,740

 
$
12.86

Granted
494

 
$
14.57

Exercised
(413
)
 
$
8.30

Expired
(86
)
 
$
13.59

Forfeited
(42
)
 
$
20.76

Outstanding at December 31, 2011
4,693

 
$
13.36

Granted
645

 
$
14.85

Exercised
(669
)
 
$
8.65

Expired
(84
)
 
$
14.02

Forfeited
(115
)
 
$
21.44

Outstanding at December 31, 2012
4,470

 
$
14.06

Granted
502

 
$
20.25

Exercised
(1,686
)
 
$
12.53

Expired
(56
)
 
$
15.66

Forfeited
(87
)
 
$
14.68

Outstanding at December 31, 2013
3,143

 
$
15.82

Vested and expected to vest at December 31, 2013
3,114

 
$
15.79

Exercisable at December 31, 2013
2,078

 
$
15.11
Schedule of outstanding and exercisable options by exercise price range
The ranges of outstanding and exercisable options for equity share-based payment awards as of December 31, 2013 were as follows:
Range of Exercise Prices
Number
Outstanding
 
Weighted
Average Exercise
Price of
Outstanding
Options
 
Number
Exercisable
 
Weighted
Average Exercise
Price of
Exercisable
Options
 
(in thousands)
 
 
 
(in thousands)
 
 
$6.40 - $10.41
332

 
$
8.71

 
332

 
$
8.71

$10.58 - $10.75
384

 
$
10.65

 
384

 
$
10.65

$11.27 - $13.53
347

 
$
12.84

 
291

 
$
12.77

$13.67 - $14.10
358

 
$
13.86

 
143

 
$
13.94

$14.16 - $15.04
364

 
$
14.58

 
167

 
$
14.67

$15.06 - $17.29
382

 
$
16.79

 
106

 
$
16.51

$17.49 - $20.95
434

 
$
19.84

 
369

 
$
20.12

$21.07 - $23.19
330

 
$
22.52

 
104

 
$
21.50

$23.41 - $26.99
136

 
$
24.61

 
106

 
$
24.76

$29.16 - $29.16
76

 
$
29.16

 
76

 
$
29.16

$6.40 - $29.16
3,143

 
$
15.82

 
2,078

 
$
15.11
Schedule of restricted stock and restricted stock units activity
A summary of activity of restricted stock and restricted stock units ("RSUs") granted under the 2009 Plan as of December 31, 2013 is presented below:
 
Shares of
Restricted Stock
 
Weighted-Average Grant
Date Fair Value Per Share
Restricted Stock Units
 
Weighted-Average Grant
Date Fair Value
 
(in thousands)
 
 
(in thousands)
 
 
Nonvested at December 31, 2010
77

 
$
12.91

308

 
$
12.98

Granted
68

 
$
14.71

145

 
$
14.39

Vested
(77
)
 
$
12.91

(152
)
 
$
14.26

Forfeited
—

 
—

(14
)
 
$
12.82

Nonvested at December 31, 2011
68

 
$
14.71

287

 
$
13.03

Granted
67

 
$
14.19

274

 
$
14.58

Vested
(78
)
 
$
14.64

(153
)
 
$
12.90

Forfeited
—

 
—

(19
)
 
$
14.55

Nonvested at December 31, 2012
58

 
$
14.19

389

 
$
14.09

Granted
$
55

 
$
18.20

190

 
19.87

Vested
$
(61
)
 
$
14.23

(195
)
 
14.31

Forfeited
—

 
—

(22
)
 
14.08
Nonvested at December 31, 2013
$
52

 
$
18.43

362

 
17.15
PSU 2011 percentile placement
The following table shows the percent of PSUs granted in 2011 and eligible for further time-based vesting based on our percentile placement:
Percentile Placement of Our Total Shareholder Return
 
% of PSUs Eligible for Time-
Based Vesting
Below the 35th percentile
 
—%
At least the 35th percentile, but below the 50th percentile
 
50%
At least the 50th percentile, but below the 65th percentile
 
100%
At least the 65th percentile, but below the 75th percentile (1)
 
110% to 119%
At or above the 75th percentile
 
120%
PSU 2012 percentile placement
The following table shows the percent of PSUs granted in 2012 eligible for further time-based vesting based on our percentile placement:
Percentile Placement of Our Total Shareholder Return
% of PSUs Eligible for Time-
Based Vesting
Below the 35th percentile
—%
At least the 35th percentile, but below the 50th percentile
50%
At least the 50th percentile
100%
Schedule of performance-based units activity
A summary of activity of the PSUs for the years ended December 31, 2013 and 2012 is presented below:
Performance-based Stock Units
Number of Units
 
Weighted-
Average
Grant Date
Fair Value Per
Unit
 
(in thousands)
 
 
Non-vested, December 31, 2011
100

 
$
11.15

Granted
135

 
$
10.94

Vested
(60
)
 
$
11.15

Forfeited
—

 
$
—

Non-vested, December 31, 2012
175

 
$
11.00

Granted
142

 
$
14.68

Vested
(57
)
 
$
11.15

Forfeited
(35
)
 
$
10.93

Non-vested, December 31, 2013
225

 
$
13.32