v2.4.0.6
Stockholders' Equity
 9 Months Ended
Sep. 30, 2012
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
8.
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 September 30, 2012 and December 31, 2011, the Plans provided for the issuance of a maximum of approximately 8.5 million shares and 7.2 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, 2012, the shares available for grant increased 1,360,617 pursuant to the automatic share reserve increase provision under the Plans. Accordingly, as of September 30, 2012, a total of 2,837,496 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 the three months ended March 31, 2012, the Company granted 210,000 time-based restricted stock awards to the Company’s Chief Executive Officer that vest ratably over three years and 380,000 time-based restricted stock awards to members of executive management that vest ratably over four years. In addition, the Company granted its Chief Executive Officer 580,000 shares of the Company’s common stock in the form of restricted stock and restricted stock units (the “Performance Award”). The Performance Award represents the maximum number of shares that can vest over a three year period. The Performance Awards will vest based on achievement of revenue and adjusted EBITDA goals during 2012, 2013 and 2014, with the revenue and adjusted EBITDA milestones each carrying a 50% weight. Assuming achievement of 100% of the target performance metrics in each case over a three-year period, the Chief Executive Officer would be eligible to vest in 290,000 total shares, and in any given year 96,666 shares. Assuming achievement of 200% of the target performance metrics in each case over a three-year period, the maximum number permitted under the arrangement, the Chief Executive Officer would be eligible to vest in 580,000 total shares, and in any given year, 193,334 shares. During the three and nine months ended September 30, 2012, no stock options were granted.
A summary of the Plans is presented below:
 
 
 
Number of
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value (in
thousands)
Options outstanding at December 31, 2011
 
1,507,519

 
$
13.02

 
 
 
 
Options granted
 
—

 
—

 
 
 
 
Options exercised
 
(362,680
)
 
0.61

 
 
 
$
4,993

Options forfeited
 
(1,048,478
)
 
18.12

 
 
 
 
Options expired
 
(255
)
 
8.87

 
 
 
 
Options outstanding and exercisable at September 30, 2012
 
96,106

 
$
4.31

 
3.16
 
$
1,051


The intrinsic value of exercised stock options is calculated based on the difference between the exercise price and the quoted market price of the Company’s common stock as of the close of the exercise date. The aggregate intrinsic value for options outstanding and exercisable is calculated as the difference between the exercise price of the underlying stock option awards and the quoted market price of the Company’s common stock at September 30, 2012. As of September 30, 2012, there is no unrecognized compensation expense related to non-vested stock options granted prior to that date. The Company’s 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 purchase price paid by the employee. During the three and nine months ended September 30, 2012, 81,755 and 204,495 forfeited shares of restricted stock have been repurchased by the Company at no cost.
A summary of the status for nonvested stock awards as of September 30, 2012 is presented as follows:
 
Nonvested Stock Awards
 
Restricted
Stock
 
Restricted
Stock
Units
 
Total Number
of Shares
Underlying
Awards
 
Weighted
Average
Grant-Date
Fair
Value
Nonvested at December 31, 2011
 
1,385,420

 
419,094

 
1,804,514

 
$
19.75

Granted
 
1,649,814

 
417,377

 
2,067,191

 
21.17

Vested
 
(864,040
)
 
(151,641
)
 
(1,015,681
)
 
18.91

Forfeited
 
(204,495
)
 
(227,089
)
 
(431,584
)
 
21.58

Nonvested at September 30, 2012
 
1,966,699

 
457,741

 
2,424,440

 
$
20.99


The aggregate intrinsic value for all non-vested shares of restricted stock and restricted stock units outstanding as of September 30, 2012 was $37.0 million.
As of September 30, 2012, total unrecognized compensation expense related to non-vested restricted stock and restricted stock units was $29.3 million, which the Company expects to recognize over a weighted-average period of approximately 1.39 years. Total unrecognized compensation expense may be increased or decreased in future periods for subsequent grants or forfeitures.
Of the 258,952 shares of the Company’s restricted stock and restricted stock units vesting during the three months ended September 30, 2012, the Company repurchased 81,364 shares at an aggregate purchase price of approximately $1.1 million pursuant to the stockholder’s right under the Plans to elect to use common stock to satisfy tax withholding obligations.
Common Stock Warrant
As of December 31, 2011, a warrant to purchase 24,375 shares of common stock was outstanding. During the quarter ended June 30, 2012, this warrant was completely exercised on a net basis. As a result, the Company issued 19,895 shares of common stock and received no cash upon the exercise of the warrant.
Shares Reserved for Issuance
At September 30, 2012, the Company had reserved for future issuance the following shares of common stock upon the exercise of options:
 
Common stock available for future issuances under the Plans
2,837,496

Common stock reserved for outstanding options and restricted stock units
553,847

 
3,391,343