Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Stock-Based Compensation | ' |
3. Stock-Based Compensation |
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The Company maintains several stock-based compensation plans, which are more fully described in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. The Company included total stock-based compensation expense related to all its stock awards in various operating expense categories for the three months ended March 31, 2014 and 2013, as follows: |
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| | Three Months Ended March 31, | | | | | | | | | | | |
| | 2014 | | 2013 | | | | | | | | | | | |
| | (In Thousands) | | | | | | | | | | | |
Product and content development | | $ | 443 | | | $ | 556 | | | | | | | | | | | | |
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Sales and marketing | | 239 | | | 341 | | | | | | | | | | | | |
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General and administrative | | 506 | | | 407 | | | | | | | | | | | | |
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Total stock-based compensation | | $ | 1,188 | | | $ | 1,304 | | | | | | | | | | | | |
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Options |
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The following table represents a summary of the Company’s stock option activity under the 2009 Stock Incentive Plan and related information, without regard for estimated forfeitures, for the three months ended March 31, 2014: |
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| | Shares | | Weighted Average Exercise Price | | | | | | | | | | | | |
| | (In Thousands) | | | | | | | | | | | | | | |
Options outstanding at December 31, 2013 | | 281 | | | $ | 8.79 | | | | | | | | | | | | | |
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Options granted | | — | | | $ | — | | | | | | | | | | | | | |
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Options exercised | | (2 | ) | | $ | 4 | | | | | | | | | | | | | |
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Options forfeited | | — | | | $ | — | | | | | | | | | | | | | |
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Options outstanding at March 31, 2014 | | 279 | | | $ | 8.83 | | | | | | | | | | | | | |
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During the three months ended March 31, 2014, the Company recorded approximately $47,000 of compensation expense related to options. No compensation expense related to options was recorded for the three months ended March 31, 2013. No options were granted during the three months ended March 31, 2014 and 2013. No options vested during the three months ended March 31, 2014 and 2013. |
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The intrinsic value of options exercised during the three months ended March 31, 2014 was $12,800. The intrinsic value of options exercised during the three months ended March 31, 2013 was $87,000. |
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The following table summarizes information about options outstanding and exercisable at March 31, 2014: |
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| | Options Outstanding | | Options Exercisable |
| | Number Outstanding as of March 31, 2014 | | Weighted | | Weighted | | Number Exercisable as of March 31, 2014 | | Weighted | | Weighted |
Average Remaining Contractual Life (in Years) | Average | Average Remaining Contractual Life (in Years) | Average |
| Exercise | | Exercise |
| Price | | Price |
| | (In Thousands) | | | | | | (In Thousands) | | | | |
$4.00 | | 129 | | | 0.24 | | $ | 4 | | | 129 | | | 0.24 | | | $ | 4 | |
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$12.97 | | 150 | | | 4.48 | | $ | 12.97 | | | — | | | — | | | $ | — | |
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| | 279 | | | 2.53 | | $ | 8.83 | | | 129 | | | 0.24 | | | $ | 4 | |
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The aggregate intrinsic value of stock options outstanding and exercisable at March 31, 2014 was $0.8 million. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the quoted closing price of the Company’s common stock as of March 31, 2014. |
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Service-based Restricted Stock Awards |
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The following table summarizes the activity for awards of restricted stock with service-based vesting terms for the three months ended March 31, 2014: |
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| | Restricted Stock | | Weighted Average Grant Date | | | | | | | | | | | | |
Fair Value | | | | | | | | | | | | |
| | (In Thousands) | | | | | | | | | | | | | | |
Unvested as of December 31, 2013 | | 2,310 | | | $ | 10.01 | | | | | | | | | | | | | |
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Granted | | 192 | | | $ | 11.95 | | | | | | | | | | | | | |
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Vested | | (773 | ) | | $ | 9.45 | | | | | | | | | | | | | |
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Forfeited | | (95 | ) | | $ | 9.91 | | | | | | | | | | | | | |
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Unvested as of March 31, 2014 | | 1,634 | | | $ | 10.52 | | | | | | | | | | | | | |
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For the three months ended March 31, 2014 and 2013, the weighted average grant date fair value for service-based restricted stock was $11.95 and $9.25, respectively. The fair value of service-based restricted stock that vested during these periods was $7.3 million and $3.8 million, respectively. During the three months ended March 31, 2014 and 2013, 327,213 and 174,338 shares of service-based restricted stock, respectively, were surrendered by employees to satisfy the employees' tax withholding obligations related to the vesting of the service-based stock awards. The aggregate intrinsic value of unvested service-based restricted shares as of March 31, 2014 was $16.6 million. The intrinsic value for service-based restricted shares is calculated based on the par value of the underlying shares and the quoted price of the Company’s common stock as of March 31, 2014. |
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As of March 31, 2014, there was $13.7 million of total unrecognized compensation cost related to unvested service-based restricted shares, net of estimated forfeitures, which is expected to be recognized over a weighted average period of 2.60 years. During the three months ended March 31, 2014 and 2013, the Company recorded $1.2 million and $1.3 million, respectively, of compensation expense related to service-based restricted shares. |
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Performance-based Restricted Stock Awards |
On February 4, 2014, the Board approved the vesting of the 31,250 performance-based restricted shares awarded to the Company's President (now Chief Executive Officer and President) during the year ended December 31, 2013. The fair value of performance-based restricted stock that vested during the three months ended March 31, 2014 was $0.4 million. |
On March 7, 2014, the Company granted an additional 31,250 restricted shares of common stock to its President (now Chief Executive Officer and President), pursuant to his employment agreement. Vesting of this award is based upon (1) the achievement of performance goals established by the Compensation Committee of the Board and (2) continued employment with the Company through the end of the performance period. The performance period for this award ends on December 31, 2014. The grant date fair value of this performance-based restricted stock award was $12.03, which was determined using the fair market value of the Company's stock on the grant date. During the three months ended March 31, 2014, the Company incurred $30,000 of stock-based compensation expense related to this performance-based restricted stock award. As of March 31, 2014, there was $0.3 million of unrecognized compensation cost related to this performance-based restricted award. |
There were no performance-based restricted stock awards granted during the three months ended March 31, 2013. |
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Employee Stock Purchase Plan ("ESPP") |
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During the three months ended March 31, 2014 and 2013, the Company issued shares of common stock under the ESPP, as follows: |
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Offering Period Purchase Date | | Number of Shares | | Purchase Price | | | | | | | | | | | | |
31-Jan-13 | | 20,170 | | | $ | 7.11 | | | | | | | | | | | | | |
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31-Jul-13 | | 19,048 | | | $ | 8.15 | | | | | | | | | | | | | |
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Total 2013 | | 39,218 | | | | | | | | | | | | | | | |
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31-Jan-14 | | 17,640 | | | $ | 10.26 | | | | | | | | | | | | | |
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Total 2014 | | 17,640 | | | | | | | | | | | | | | | |
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The fair value of ESPP rights have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: |
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| | Three Months Ended March, | | | | | | | | | | | | | | | |
| | 2014 | | 2013 | | | | | | | | | | | | | | | |
| | ESPP Rights | | ESPP Rights | | | | | | | | | | | | | | | |
Expected term | | 6 months | | 6 months | | | | | | | | | | | | | | | |
Risk-free rate | | 0.06% | | 0.11% | | | | | | | | | | | | | | | |
Expected volatility | | 29.30% | | 19.90% | | | | | | | | | | | | | | | |
Dividend yield | | —% | | —% | | | | | | | | | | | | | | | |
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The expected term of the ESPP rights is based on the offering period of six months. The risk-free interest rates are based on the expected term of the ESPP rights at the time of grant. Expected volatility is based on the historical volatility of the market price of the Company’s stock. The fair value for ESPP rights includes the discount from market value provided for under the ESPP. |
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During the three months ended March 31, 2014 and 2013, the Company recorded $21,000 and $18,000, respectively, of compensation expense related to ESPP rights. The weighted average grant-date fair value of ESPP rights arising from elections made by ESPP participants was $2.62 and $1.98 during the three months ended March 31, 2014 and 2013, respectively. The fair value of ESPP rights that vested during the three months ended March 31, 2014 and 2013 was $44,000 and $29,000, respectively. |
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The intrinsic value of outstanding ESPP rights as of March 31, 2014 was $30,000. The intrinsic value of the shares of ESPP rights is calculated as the discount from the quoted price of the Company’s common stock, as defined in the ESPP, which was available to employees as of the respective dates. |
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As of March 31, 2014, there was approximately $36,000 of unrecognized compensation cost related to ESPP rights, which is expected to be recognized over a period of four months. |
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The Company received cash from the exercise of options and ESPP rights of $0.2 million and $0.2 million for the three months ended March 31, 2014 and 2013, respectively, for which the Company issued new shares of common stock. |