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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2012
Stock-Based Compensation  
Stock-Based Compensation

3.   Stock-Based Compensation

 

The Company issues nonqualified and incentive stock options as well as other equity awards pursuant to its 2009 Omnibus Incentive Plan, as amended (Option Plan).  Such awards pursuant to the Option Plan may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants.

 

During the nine months ended September 30, 2012, the Company granted 4,507,445 service-based options to purchase common stock.  These options were granted with exercise prices equal to or greater than the fair market value of the Company’s stock at the grant date, vest over four years and expire after ten years.  The weighted average grant-date fair value of service-based options granted under the Company’s Option Plan during the nine months ended September 30, 2011 and 2012 was $1.54 and $1.25, respectively.

 

The net compensation costs recorded for the service-based stock options related to employees and directors were $1,127,000 and $3,166,000 for the quarter and nine months ended September 30, 2012, respectively, compared to $919,000 and $2,767,000 for the corresponding periods ended September 30, 2011.

 

The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table.

 

 

 

Nine Months Ended September 30,

 

Service-Based Stock Options

 

2011

 

2012

 

 

 

 

 

 

 

Expected dividend rate

 

0%

 

0%

 

Expected stock price volatility

 

72.9% - 78.9%

 

72.9% - 74.9%

 

Risk-free interest rate

 

1.7% - 2.7%

 

0.9% -1.5%

 

Expected life (years)

 

6.0 - 6.3

 

6.0 - 6.3

 

 

The following table summarizes the activity for service-based stock options for the indicated periods:

 

Service-Based Stock Options

 

Options

 

Weighted
Average
Exercise Price

 

Weighted Average
Remaining
Contractual Term
(Years)

 

Aggregate
Intrinsic Value

 

 

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2011

 

8,079,667

 

$

2.38

 

8.4

 

$

674,000

 

Granted

 

4,507,445

 

$

2.36

 

 

 

 

 

Exercised

 

(144,167

)

$

1.48

 

 

 

$

52,000

 

Cancelled

 

(1,057,700

)

$

2.03

 

 

 

 

 

Forfeited or expired

 

(828,432

)

$

2.20

 

 

 

 

 

Outstanding at September 30, 2012

 

10,556,813

 

$

2.43

 

8.4

 

$

206,000

 

Exercisable at September 30, 2012

 

3,727,232

 

$

2.75

 

7.3

 

$

119,000

 

 

As of September 30, 2012 there was $6,603,000 of total unrecognized compensation cost related to non-vested service-based stock options granted under the Option Plan.  That cost is expected to be recognized over a weighted-average period of 3.0 years.

 

The total fair value of options vested during the nine months ended September 30, 2011 and 2012 was $1,582,000 and $2,136,000, respectively.