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Stock Based Compensation
 6 Months Ended
Jun. 30, 2012
Stock Based Compensation [Abstract]  
Stock Based Compensation

7. Stock Based Compensation

2008 Equity Incentive Plan

For the six months ended June 30, 2012, the only active share-based compensation plan was the 2008 Equity Incentive Plan (the “Incentive Plan”). The terms of awards granted during the six months ended June 30, 2012 were consistent with those described in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Summary of Stock Options

The following table summarizes information regarding activity in our stock option plan during the six months ended June 30, 2012 and July 2, 2011:

 

                         
    Number of
Shares		     Weighted
Average
Exercise Price
Per Share		     Aggregate
Intrinsic
Value
(thousands)		  

Outstanding at December 31, 2011

     1,766,401     $ 3.63          

Granted

     113,550     $ 4.10          

Exercised

     (136,091 )    $ 2.67          

Canceled or forfeited

     (45,305 )    $ 4.62          
   

 

 

                  

Outstanding at June 30, 2012

     1,698,555     $ 3.71     $ 1,594  
   

 

 

                  

 

The weighted-average grant date fair value of the options granted under the Company’s stock plans as calculated using Black-Scholes was $2.75 per share for the three months ended June 30, 2012. The weighted-average grant date fair value of the options granted under the Company’s stock plans as calculated using Black-Scholes was $2.77 per share for the six months ended June 30, 2012.

The Company uses the Black-Scholes option-pricing model to estimate fair value of stock-based awards with the following weighted average assumptions:

 

                                 
    Three Months Ended     Six Months Ended  
    June 30,
2012		     July 2,
2011		     June 30,
2012		     July 2,
2011		  

Average risk free interest rate

     0.68 %     1.51 %     0.70 %     1.85 %

Expected life (in years)

     4.55 years       4.75 years       4.55 years       4.75 years  

Dividend yield

     0.0 %     0.0 %     0.0 %     0.0 %

Average volatility

     91 %     91 %     91 %     91 %

The following table shows stock-based compensation expense included in the condensed consolidated statements of operations for the three and six month periods ended June 30, 2012 and July 2, 2011 (in thousands):

 

                                 
    Three Months Ended     Six Months Ended  
    June 30,
2012		     July 2,
2011		     June 30,
2012		     July 2,
2011		  

Cost of revenues

   $ 16     $ 14     $ 34     $ 28  

Research and development

     20       16       39       36  

Sales and marketing

     26       29       55       56  

General and administrative

     88       45       169       99  
   

 

 

    

 

 

    

 

 

    

 

 

  
    $ 150     $ 104     $ 297     $ 219  
   

 

 

    

 

 

    

 

 

    

 

 

  

Approximately $6 thousand and $5 thousand of the stock based compensation expense recognized was capitalized into inventory as a component of overhead at June 30, 2012 and July 2, 2011, respectively.

Information regarding stock options outstanding, exercisable and expected to vest at June 30, 2012 is summarized below:

 

                                 
    Number of
Shares		     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contractual
Life (Years)		     Aggregate
Intrinsic
Value
(thousands)		  

Options outstanding

     1,698,555     $ 3.71       3.56     $ 1,594  

Options vested and expected to vest

     1,583,062     $ 3.72       3.39     $ 1,514  

Options exercisable

     1,206,552     $ 3.76       2.59     $ 1,292  

The aggregate intrinsic value in the table above represents the pre-tax intrinsic value, based on the Company’s closing price as of June 29, 2012, that would have been received by option holders had all option holders exercised their stock options as of that date. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised for the six months ended June 30, 2012 and July 2, 2011 were approximately $198 thousand and $51 thousand, respectively.

As of June 30, 2012, there was $1,022 thousand of total unrecognized compensation cost, net of forfeitures, related to non-vested share-based compensation arrangements under the Incentive Plan. The cost is expected to be recognized over a weighted average period of 2.96 years.

Summary of Restricted Stock Units and Awards

The Company recognizes the estimated compensation expense of restricted stock units and awards, net of estimated forfeitures, over the vesting term. The estimated compensation expense is based on the fair value of the Company’s common stock on the date of grant.

Information regarding the restricted stock units outstanding, vested and expected to vest as of June 30, 2012 is summarized below:

 

                         
    Number of
Shares		     Weighted
Average
Remaining
Contractual
Life (years)		     Aggregate
Intrinsic
Value
(thousands)		  

Restricted stock units outstanding

     95,189       1.66     $ 397  

Restricted stock units vested and expected to vest

     75,443       1.24     $ 315  

The aggregate intrinsic value in the table above represents the pre-tax intrinsic value, based on the Company’s closing price as of June 29, 2012, that would have been received by option holders had all option holders exercised their stock options as of that date. There were no restricted stock units granted, vested, released or forfeited for the six months ended June 30, 2012 and July 2, 2011.

There were no restricted stock awards granted, vested, released or forfeited for the six months ended June 30, 2012 and July 2, 2011. There were 10,126 shares outstanding at June 30, 2012 with a weighted average grant date fair value of $3.95.