v2.4.0.6
Stockholders' Equity
 12 Months Ended
Dec. 31, 2011
Stockholders' Equity [Abstract]  
Stockholders' Equity
11. Stockholders' Equity

1999 Stock Option Plan and 2007 Equity Incentive Plan

Prior to the effective date of the registration statement for the Company's initial public offering ("IPO") on June 26, 2007, eligible employees and non-employees were awarded options to purchase shares of the Company's common stock, restricted stock or restricted stock units pursuant to the Company's 1999 Stock Plan (the "1999 Plan"). Upon the effective date of the registration statement of the Company's IPO, the Company ceased using the 1999 Plan for the issuance of new equity awards. Upon the closing of the Company's IPO on July 2, 2007, the Company established its 2007 Equity Incentive Plan, as amended (the "2007 Plan" and together with the 1999 Plan, the "Plans"). The 1999 Plan will continue to govern the terms and conditions of outstanding awards granted thereunder, but no further shares are authorized for new awards under the 1999 Plan. As of December 31, 2011 and December 31, 2010, the Plans provided for the issuance of a maximum of approximately 7.2 million shares and 5.9 million shares, respectively, of common stock. In addition, the 2007 Plan provides for annual increases in the number of shares available for issuance thereunder on the first day of each fiscal year beginning with the 2008 fiscal year, equal to the lesser of: (i) 4% of the outstanding shares of the Company's common stock on the last day of the immediately preceding fiscal year; (ii) 1,800,000 shares; or (iii) such other amount as the Company's board of directors may determine. The vesting period of options granted under the Plans is determined by the Board of Directors, although, for service-based options the vesting has historically been generally ratably over a four-year period. Options generally expire 10 years from the date of the grant. Effective January 1, 2011, the shares available for grant increased 1,260,942 pursuant to the automatic share reserve increase provision under the Plans. Accordingly, as of December 31, 2011, a total of 2,121,449 shares were available for future grant under the 2007 Plan.

The Company estimates the fair value of stock option awards using the Black-Scholes option-pricing formula and a single option award approach. The Company then amortizes the fair value of awards expected to vest on a ratable straight-line basis over the requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period.

During 2011 and 2010, the Company granted market based stock options and restricted stock units. These awards are subject to market-based vesting, whereby 100% of the shares subject to the awards will vest in the event that the Company's common stock closing price exceeds an average of $30 per share for a consecutive thirty-day period prior to May 4, 2012 (the "Trigger"). 50% of the shares subject to the awards will vest upon achievement of the Trigger and the remaining 50% of the shares subject to the awards will vest on the one year anniversary of the achievement of the Trigger, subject to the employee's continued status as a service provider of the Company through such dates. During years ended December 31, 2011 and 2010, the Company recorded compensation expense related to these market based awards of $3.1 million and $3.8 million, respectively.

 

The following are the weighted-average assumptions used in valuing the stock options granted during the year ended December 31, 2010 and a discussion of the Company's assumptions. No stock options were issued during the years ended December 31, 2011 or December 31, 2009.

 

     Year Ended
December 31,		  
     2010  
     (In thousands)  

Dividend yield

      0.00 % 

Expected volatility

      67.79 % 

Risk-free interest rate

      2.90 % 

Expected life of options (in years)

      2.00   

Dividend yield — The Company has never declared or paid dividends on its common stock and has no plans to pay dividends in the foreseeable future.

Expected volatility — Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The expected volatility is calculated based on the weekly closing price volatility of the Company's common stock for the period from its initial public offering until the grant date.

Risk-free interest rate — The Company used rates on the grant date of zero-coupon government bonds with maturities over periods covering the term of the awards, converted to continuously compounded forward rates.

Expected life of the options — This is the period of time that the options granted are expected to remain outstanding.

The weighted average grant date fair value of options granted during 2010 was $18.21. No options were granted during 2011 or 2009. The total fair value of shares vested during the years ended December 31, 2011, 2010 and 2009 were less than $0.1 million, $0.1 million and $0.5 million, respectively.

A summary of the Plans is presented below:

 

     Number of
shares		      Weighted-
Average
Exercise
Price		  

Options outstanding December 31, 2008

      1,453,370       $ 2.26   

Options granted

      —           —     

Options exercised

      420,583         2.19   

Options forfeited

      36,689         7.01   

Options expired

      2,819         4.87   
  

 

 

     

 

 

  

Options outstanding December 31, 2009

      993,279         2.11   

Options granted

      1,043,045         18.21   

Options exercised

      308,084         3.22   

Options forfeited

      5,628         9.65   

Options expired

      9,447         4.72   
  

 

 

     

 

 

  

Options outstanding December 31, 2010

      1,713,165         11.68   

Options granted

      0         0.00   

Options exercised

      203,894         1.82   

Options forfeited

      82         9.29   

Options expired

      1,670         5.91   
  

 

 

     

 

 

  

Options outstanding December 31, 2011

      1,507,519       $ 13.02   
  

 

 

     

 

 

  

Options exercisable at December 31, 2011

      464,451       $ 1.38   
  

 

 

     

 

 

  

 

The following table summarizes information about options outstanding at December 31, 2011:

 

     Options Outstanding      Options Exercisable  

Range of Exercise Prices

    Options
Outstanding		      Weighted
Average
Exercise
Price		      Weighted
Average
Remaining
Contractual
Life (Years)		      Options
Exercisable		      Weighted
Average
Exercise
Price		      Weighted
Average
Remaining
Contractual
Life (Years)		  

$0.25 - $2.50

      369,023       $ 0.41         2.03         369,023       $ 0.41         2.03   

$2.51 - $13.66

      95,451       $ 5.14         4.22         95,428       $ 5.14         4.22   

$13.67 - $18.21

      1,043,045       $ 18.21         3.34         —         $ —           —     
  

 

 

           

 

 

        
     1,507,519       $ 13.02         3.07         464,451       $ 1.38         2.45   
  

 

 

           

 

 

        

The intrinsic value of exercised stock options is calculated based on the difference between the exercise price and the quoted market price of our common stock as of the close of the exercise date. The aggregate intrinsic value of options exercised for the years ended December 31, 2011, 2010 and 2009 was $3.6 million, $4.7 million and $4.3 million, respectively. The aggregate intrinsic value for all options outstanding under the Company's stock plans as of December 31, 2011 was $12.3 million. The aggregate intrinsic value for options exercisable under the Company's stock plans as of December 31, 2011 was $9.2 million. The weighted average remaining contractual life for all options outstanding and all options exercisable under the Company's stock plans as of December 31, 2011 was 3.07 years and 2.45 years, respectively. As of December 31, 2011, total unrecognized compensation expense related to non-vested stock options granted prior to that date is estimated at $0.3 million, which the Company expects to recognize over a weighted average period of approximately 0.16 years. Total unrecognized compensation expense is estimated and may be increased or decreased in future periods for subsequent grants or forfeitures.

Our nonvested stock awards are comprised of restricted stock and restricted stock units. The Company has a right of repurchase on such shares that lapse at a rate of twenty-five percent (25%) of the total shares awarded at each successive anniversary of the initial award date, provided that the employee continues to provide services to the Company. In the event that an employee terminates their employment with the Company, any shares that remain unvested and consequently subject to the right of repurchase shall be automatically reacquired by the Company at the original cash purchase price paid by the employee, if any. During the year ended December 31, 2011, 35,831 forfeited shares of restricted stock have been repurchased by the Company at no cost and subsequently retired. A summary of the status for nonvested stock awards as of December 31, 2011 is presented as follows:

 

Nonvested Stock Awards

    Restricted
Stock		      Restricted
Stock
Units		      Number of
Shares
Underlying
Awards		      Weighted
Average
Grant-
Date Fair
Value		  

Nonvested at December 31, 2008

      1,043,101         96,673         1,139,774       $ 18.53   

Granted

      1,170,380         138,895         1,309,275         10.22   

Vested

      393,764         27,338         421,102         16.37   

Forfeited

      220,434         21,411         241,845         17.38   
  

 

 

     

 

 

     

 

 

     

 

 

  

Nonvested at December 31, 2009

      1,599,283         186,819         1,786,102       $ 13.11   

Granted

      991,379         333,153         1,324,532         17.13   

Vested

      856,964         88,559         945,523         13.75   

Forfeited

      142,176         26,342         168,518         13.67   
  

 

 

     

 

 

     

 

 

     

 

 

  

Nonvested at December 31, 2010

      1,591,522         405,071         1,996,593       $ 15.43   

Granted

      681,674         243,983         925,657         25.39   

Vested

      751,873         116,863         868,736         16.01   

Forfeited

      135,903         113,097         249,000         19.02   
  

 

 

     

 

 

     

 

 

     

 

 

  

Nonvested at December 31, 2011

      1,385,420         419,094         1,804,514       $ 19.75   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

The aggregate intrinsic value for all non-vested shares of restricted common stock and restricted stock units outstanding as of December 31, 2011 was $38.5 million. The weighted average remaining contractual life for all non-vested shares of restricted common stock and restricted stock units as of December 31, 2011 was 2.02 years.

We granted nonvested stock awards at no cost to recipients during the years ended December 31, 2011, 2010 and 2009. As of December 31, 2011, total unrecognized compensation expense related to non-vested restricted stock and restricted stock units was $20.7 million, which the Company expects to recognize over a weighted average period of approximately 1.52 years. Total unrecognized compensation expense may be increased or decreased in future periods for subsequent grants or forfeitures.

Of the 868,736 shares of the Company's restricted stock and restricted stock units vesting during the year ended December 31, 2011, the Company repurchased 289,637 shares at an aggregate purchase price of approximately $7.4 million pursuant to the stockholder's right under the Plans to elect to use common stock to satisfy tax withholding obligations. The repurchased shares were subsequently retired.

Common Stock Warrants

In prior years, the Company had granted an aggregate of 403,368 warrants to purchase common stock. The common stock warrants began to expire in February 2006 through to April 2015 with exercise prices ranging from $3.00 to $24.50. As of December 31, 2011 and 2010, warrants to purchase 24,375 shares of common stock were outstanding.

Shares Reserved for Issuance

At December 31, 2011, the Company had reserved for future issuance the following shares of common stock upon the exercise of options and warrants:

 

Common stock available for future issuances under the Plans

      2,063,753   

Common stock reserved for outstanding options and restricted stock units

      1,926,613   

Common stock reserved for outstanding warrants

      24,375   
  

 

 

  
     4,014,741   
  

 

 

  

Unregistered Sales of Equity Securities

On December 20, 2011, in connection with the execution of the Settlement Documents, as more fully described in footnote 9, the Company issued a total of 974,358 unregistered shares of comScore common stock as consideration.

On August 11, 2011, in connection with its purchase of all the outstanding capital stock of AdXpose, the Company issued a total of 982,285 unregistered shares of comScore common stock as consideration for such acquisition.

On July 1, 2010, in connection with its purchase of all the outstanding capital stock of Nexius, the Company issued a total of 158,070 unregistered shares of comScore common stock as partial consideration for such acquisition.

On August 31, 2010, in connection with its purchase of all of the outstanding capital stock of Nedstat, the Company issued a total of 58,045 shares of common stock to two key employee shareholders of Nedstat. These shares were issued pursuant to the terms of Stock Purchase Agreements based on the purchase of such number of shares equal to 30% of such shareholders' respective consideration received in the acquisition of Nedstat by the Company.