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Stock-based Compensation Plans
 9 Months Ended
Sep. 30, 2012
Stock-based Compensation Plans [Abstract]  
Stock-based Compensation Plans

(3) Stock-based Compensation Plans

The Company accounts for stock-based compensation for employees and non-employees under the fair value method.

Stock-based compensation expense was included in the following operating expense categories as follows (in thousands):

 

                                 
    Nine months ended
September 30,		     Three months ended
September 30,		  
    2011     2012     2011     2012  

Service costs

   $ 924     $ 1,178     $ 325     $ 419  

Sales and marketing

     1,101       2,353       461       278  

Product development

     1,174       779       470       176  

General and administrative

     8,210       8,129       2,696       2,842  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total stock-based compensation

   $ 11,409     $ 12,439     $ 3,952     $ 3,715  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income tax benefit related to stock-based compensation included in net income (loss)

   $ 3,989     $ 3,750     $ 1,800     $ 1,088  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

The per share fair value of time-vested stock options granted during the three and nine months ended September 30, 2011 and 2012 was determined on the date of grant using the Black-Scholes option-pricing model. The following weighted average assumptions were used in determining the fair value of time-vested stock option grants for the periods presented:

 

                                 
    Nine months ended
September 30,		     Three months ended
September 30,		  
    2011     2012     2011     2012  

Expected life (in years)

     4.0       4.0-6.25       4.0       4.0  

Risk-free interest rate

     1.33 %      0.60 %      0.69 %      0.47 % 

Expected volatility

     69 %      70 %      70 %      69 % 

Expected dividend yield

     0.91 %      2.00 %      0.91 %      3.11 % 

Stock option activity during the nine months ended September 30, 2012 is summarized as follows:

 

                                 
    Shares     Weighted average
exercise price		     Weighted average
remaining
contractual term
(in years)		     Aggregate
intrinsic value		  

Balance at December 31, 2011

     7,203,784     $ 8.24       6.81     $ 5,971  

Options granted

     310,400       3.88                  

Options forfeited

     (500,205 )      7.10                  

Options expired

     (367,157 )      11.28                  

Options exercised

     (6,556 )      4.13                  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance at September 30, 2012

     6,640,266     $ 7.96       6.35     $ 332  
   

 

 

    

 

 

    

 

 

    

 

 

  

The Company issues restricted stock to employees for future services and in connection with acquisitions. Restricted stock award grants are generally measured at fair value on the date of grant based on the number of awards granted and the quoted price of the Company’s common stock. Restricted shares issued are accounted for under FASB ASC 718 using the straight-line method net of estimated forfeitures.

The Company issues restricted stock units which entitle the holder to receive one share of the Company’s Class B common stock upon satisfaction of a combination of certain service and market conditions. No restricted stock units were granted during the nine months ended September 30, 2011 and 2012 that have vesting based on a combination of certain service and market conditions.

Restricted stock awards and restricted stock units activity during the nine months ended September 30, 2012 is summarized as follows:

 

                 
    Shares     Weighted average
grant date fair
value		  

Unvested balance at December 31, 2011

     4,289,024     $ 8.23  

Granted

     923,250       3.62  

Vested

     (920,431 )      6.14  

Forfeited

     (516,278 )      7.57  
   

 

 

    

 

 

  

Unvested balance at September 30, 2012

     3,775,565     $ 7.70  
   

 

 

    

 

 

  

In the second quarter of 2012 vesting of approximately 195,000 restricted shares were fully accelerated in connection with a separation agreement.

In the third quarter of 2012, the Company repurchased 6,900 shares from certain executives for minimum withholding taxes on 26,000 restricted stock award vests. The number of shares repurchased was based on the value on the vesting date of the restricted stock awards equivalent to the value of the executives’ minimum withholding taxes of $24,000. The Company then remitted cash to the appropriate taxing authorities. The payments are reflected as a financing activity within the condensed consolidated statement of cash flows. The payments had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued on the vesting date and were recorded as a reduction of additional paid in capital,