Quarterly report pursuant to Section 13 or 15(d)

Stock-based Compensation

v2.4.0.6
Stock-based Compensation
 3 Months Ended
Mar. 31, 2013
Stock-based Compensation [Abstract]  
Stock-based Compensation
8.  Stock-based Compensation

In the first quarter of 2013, the Board of Directors of the Company approved grants under the Company's Long Term Incentive Plan for an aggregate of 994,053 stock options and an aggregate of 895,860 restricted stock units ("RSUs") to certain employees of the Company. The stock options vest monthly over four years, and the RSUs vest annually over three years, in equal increments.

The Company recognizes compensation expense for all stock-based payment awards made to the Company's employees, consultants and directors based on estimated fair values. The valuation of stock option awards is determined at the date of grant using the Black-Scholes Model. This model requires inputs such as the expected term of the option, expected volatility and risk-free interest rate. To establish an estimate of expected term, the Company considers the vesting period and contractual period of the award and its historical experience of stock option exercises, post-vesting cancellations and volatility. The estimate of expected volatility is based on the Company's historical volatility. The risk-free rate is based on the yield available on U.S. Treasury zero-coupon issues. The forfeiture rate impacts the amount of aggregate compensation for both stock options and RSUs. To establish an estimate of forfeiture rate, the Company considers its historical experience of option forfeitures and terminations.

The fair value of the stock options granted was estimated based on the following weighted average assumptions for three months ended March 31, 2013 and 2011:
 
Three Months Ended March 31,
 
 
2013
 
 
2012
 
Dividend yield
 
 
0
 %
 
 
0
 %
Expected volatility
 
 
92
 %
 
 
92
 %
Risk-free interest rate
 
 
0.78
 %
 
 
1.05
 %
Expected term
 
5.6 years
 
 
5.6 years
 
 
Stock option activity for the three months ended March 31, 2013 was as follows:
 
 
Options
 
 
Weighted
Average
Exercise Price
Per Share
 
 
Weighted
Average
Remaining
Contractual Life
(in years)
 
 
Aggregate
Intrinsic Value
(in thousands)
 
Options outstanding at December 31, 2012
 
 
6,788,383
 
 
$
8.99
 
 
 
7.36
 
 
$
1,531
 
Granted
 
 
994,053
 
 
 
2.92
 
 
 
 
 
 
 
 
 
Exercised
 
 
(19,090
 )
 
 
1.97
 
 
 
 
 
 
 
 
 
Forfeited, expired or cancelled
 
 
(54,930
 )
 
 
31.12
 
 
 
 
 
 
 
 
 
Options outstanding at March 31, 2013
 
 
7,708,416
 
 
$
8.07
 
 
 
7.54
 
 
$
4,502
 
Options exercisable at March 31, 2013
 
 
4,473,529
 
 
$
11.70
 
 
 
6.39
 
 
$
2,245
 
 
The valuation of RSUs is determined at the date of grant using the closing stock price. To establish an estimate of forfeiture rate, the Company considers its historical experience of forfeitures and terminations.

Unvested RSU activity for the three months ended March 31, 2013 is summarized below:
 
 
 
 
Weighted-
 
 
Number of
 
 
Average Grant-
 
 
Shares
 
 
Date Fair Value
 
Unvested balance at December 31, 2012
 
 
1,459,853
 
 
$
2.75
 
Granted
 
 
895,860
 
 
 
2.87
 
Vested
 
 
(164,998
 )
 
 
2.50
 
Forfeited
 
 
(4,835
 )
 
 
2.06
 
Unvested balance at March 31, 2013
 
 
2,185,880
 
 
$
2.65
 
 
The following table shows total stock-based compensation expense included in the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2013 and 2012 (in thousands):
 
Three Months Ended March 31,
 
 
2013
 
 
2012
 
Research and development
 
$
997
 
 
$
385
 
Selling, general and administrative
 
 
622
 
 
 
289
 
Total stock-based compensation expense
 
$
1,619
 
 
$
674