12. Stock Plans

We have several stock incentive plans outstanding, including the 2011 Incentive Award Plan (the "2011 Plan") and plans we assumed from certain acquired companies. The 2011 Plan was approved by our shareholders in November 2011 and replaces our 2006 Long-Term Stock Incentive Plan (the "2006 Plan"). While several stock incentive plans remain outstanding, awards may only be granted under the 2011 Plan. Awards can take the form of (i) stock options, (ii) stock appreciation rights, (iii) restricted stock units ("RSUs"), (iv) restricted stock, (v) dividend equivalents, (vi) stock payments and (vii) performance awards, and can be granted to employees (including officers), non-employee directors and consultants.

The 2011 Plan provides that the maximum number of shares of common stock with respect to which awards may be granted shall not exceed 2,779,466, plus

(i)

the number of shares subject to stock options or other awards under the 2011 Plan or the 2006 Plan that are forfeited or expire or such awards are settled for cash,

(ii)

any shares tendered or withheld to satisfy the exercise price of an option or any tax withholding obligation pursuant to any award under the 2011 Plan or the 2006 Plan,

(iii)

any shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right on its exercise, and

(iv)

any shares purchased on the open market with the cash proceeds from the exercise of options will again be available for issuance under the 2011 Plan.

In addition, awards granted under the 2011 Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by an entity in connection with a corporate transaction, such as an acquisition or combination (substitute awards), will not reduce the shares authorized for grant under the 2011 Plan. Further, in the event that a company acquired by us has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant may be used for awards under the 2011 Plan and will not reduce the shares authorized for grant under the 2011 Plan, but such awards will only be made to individuals who were not employed by or providing services to us immediately prior to such acquisition or combination.

Stock awards are generally determined by the compensation committee of our board of directors (the "Committee"). Generally, the terms of the awards, including the number of shares of common stock subject to the award and the vesting schedule, are determined by the Committee. Awards to non-executive personnel may be delegated to subcommittees of our directors and/or our officers. The exercise price of stock options shall not be less than the fair value of our common stock on the date of grant. Stock option grants typically have terms of ten years, vest over four years, and are recognized on a straight-line basis over the vesting term. At December 31, 2012, there were a total of 1,093,024 shares of common stock available for future grant under the 2011 Plan.

Stock Options

A summary of our stock option activity for 2012 is presented below:

	2012

	Shares			Weighted Average Exercise Price
Outstanding at beginning of year		2,484,844		$	17.79
Granted		235,000			10.06
Exercised		(38,005	)		7.09
Forfeited		(386,871	)		16.77
Expired		(114,732	)		19.84

Outstanding at end of year		2,180,236		$	17.13

Exercisable at end of year (vested)		1,482,505		$	16.92

The following table summarizes information about stock options outstanding at December 31, 2012:

	Options Outstanding						Options Exercisable

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$5.00 - $12.49		575,697		5.71	$	8.41		338,478	$	7.65
$12.50 - $14.99		522,206		3.95		14.15		497,206		14.14
$15.00 - $24.99		827,111		7.61		20.41		466,465		20.57
$25.00 - $34.99		153,105		6.96		28.37		108,248		28.20
$35.00 - $100.00		102,117		6.57		38.05		72,108		39.11

		2,180,236		6.14	$	17.13		1,482,505	$	16.92

Options granted (excluding MediaMind replacement options issued in 2011) had a weighted average grant-date fair value per share of $5.68, $11.03 and $14.78 for the years ended December 31, 2012, 2011 and 2010, respectively. The weighted average remaining contractual life of vested stock options at December 31, 2012 was 5.2 years.

Options exercised had an intrinsic value of $0.1 million, $0.3 million and $1.7 million for the years ended December 31, 2012, 2011 and 2010, respectively. Our practice has been to issue new shares (as opposed to treasury shares) upon exercise of stock options.

The intrinsic value of options outstanding at December 31, 2012 was approximately $1.6 million. The intrinsic value of options exercisable at December 31, 2012 was approximately $1.2 million.

Unrecognized compensation costs related to unvested options, restricted stock and restricted stock units was $23.7 million at December 31, 2012. These costs are expected to be recognized over the weighted average remaining vesting period of 2.3 years.

The fair value of each option was estimated on the date of grant using the Black Scholes option pricing model with the following assumptions (excludes options issued to replace options assumed in connection with an acquisition):

	2012			2011			2010

Number of options granted		235,000			226,341			358,000
Weighted average exercise price of options granted	$	10.06		$	20.45		$	26.09
Volatility(1)		60	%		60	%		58	%
Risk free interest rate(2)		1.4	%		1.7	%		2.3	%
Expected term (years)(3)		6.3			6.3			6.3
Expected annual dividends		None			None			None

(1): Expected volatility is based on the historical volatility of our stock over a preceding period commensurate with the expected term of the award.
(2): The risk free rate is based on the U.S. Treasury yield curve at the time of grant for periods consistent with the expected term of the option.
(3): We use historical data to estimate the expected term of the awards.

Restricted Stock

We award restricted stock to certain executive officers and non-employee directors from time to time. The awards vest over periods ranging from one to three years. The total fair value of the awards granted during 2012, 2011 and 2010 was $0.0 million, $0.4 million and $0.5 million, respectively. During 2012, 2011 and 2010, we recognized $0.1 million, $1.8 million and $2.4 million in stock compensation expense related to restricted stock, respectively. The grant date fair value of restricted stock that vested during 2012, 2011 and 2010 was $0.1 million, $2.8 million and $2.1 million, respectively. During 2012, restricted stock with a grant date fair value of less than $0.1 million was forfeited.

A summary of our restricted stock activity for 2012 is presented below:

	2012

	Shares			Weighted Average Grant-Date Fair Value per Share
Nonvested shares at beginning of year		6,668		$	26.12
Granted		—			—
Forfeited		(1,334	)		19.07
Vested		(5,334	)		27.88

Nonvested shares at end of year		—		$	—

Restricted Stock Units

In 2011, we began awarding RSUs to certain executive officers, employees and non-employee directors from time to time. During 2012 and 2011, we awarded 1,590,567 and 149,340 RSUs, respectively. The awards vest over periods ranging from one to three years, and at December 31, 2012 had a weighted average remaining vesting period of 2.5 years. At December 31, 2012, the intrinsic value of outstanding RSUs was $18.6 million (includes 284,674 vested RSU shares, or $3.1 million, that have not been issued). The total fair value of the awards granted during 2012 and 2011 was $20.0 million and $4.9 million, respectively. During 2012 and 2011, we recognized $7.9 million and $2.4 million in stock compensation expense related to the RSUs, respectively. The grant date fair value of the RSUs that vested during 2012 and 2011 was $5.5 million and $0.0 million, respectively. As of December 31, 2012, 35,000 of the RSUs had been forfeited.

A summary of our RSU activity for 2012 is presented below:

	2012

	Shares			Weighted Average Grant-Date Fair Value per Share
Nonvested shares at beginning of year		149,340		$	32.83
Granted		1,590,567			12.60
Forfeited		(35,000	)		9.20
Vested and not yet issued		(284,674	)		19.19

Nonvested shares at end of year		1,420,233		$	13.49

Warrants

We issued warrants to purchase common stock in connection with certain mergers and common stock offerings. A summary of our warrant activity for 2012, 2011 and 2010 is presented below:

	2012				2011					2010

	Warrants		Weighted Average Exercise Price		Warrants			Weighted Average Exercise Price		Warrants			Weighted Average Exercise Price
Outstanding at beginning of year		—	$	—		1,898		$	474.24		688,170		$	11.68
Exercised		—		—		—			—		(678,187	)		10.09
Cancelled		—		—		(1,898	)		474.24		(8,085	)		36.36

Outstanding at end of year		—	$	—		—		$	—		1,898		$	474.24

Stock Repurchase Program

On August 30, 2010, our Board of Directors authorized the purchase of up to $30 million of our common stock in the open market or unsolicited negotiated transactions. The authorization was increased to a total of $80 million in April 2011. The stock repurchase program has no expiration date. Through December 31, 2012, we had made share repurchases totaling $34.7 million leaving $45.3 million available for future share repurchases. However, our Amended Credit Facility limits share redemptions and repurchases. Prior to 2010, we purchased $0.9 million of our common stock under a previous share repurchase program.