Stock-Based Compensation | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 2014 and 2013, as follows: |
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| | Three Months Ended June 30, | | Six Months Ended June 30, | | |
| | 2014 | | 2013 | | 2014 | | 2013 | | |
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Product and content development | | $ | 626 | | | $ | 619 | | | $ | 1,069 | | | $ | 1,175 | | | |
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Sales and marketing | | 488 | | | 476 | | | 727 | | | 817 | | | |
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General and administrative | | 696 | | | 488 | | | 1,202 | | | 895 | | | |
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Total stock-based compensation | | $ | 1,810 | | | $ | 1,583 | | | $ | 2,998 | | | $ | 2,887 | | | |
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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 six months ended June 30, 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 | | 100 | | | $ | 10.28 | | | | | | | | | | | | |
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Options exercised | | (131 | ) | | $ | 4 | | | | | | | | | | | | |
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Options forfeited | | — | | | $ | — | | | | | | | | | | | | |
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Options outstanding at June 30, 2014 | | 250 | | | $ | 11.89 | | | | | | | | | | | | |
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The fair value of the options granted in the six months ended June 30, 2014 have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: |
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| | Six Months Ended June 30, | | | | | | | | | | | | | | |
| | 2014 | | 2013 | | | | | | | | | | | | | | |
Expected term | | 3.75 years | | N/A | | | | | | | | | | | | | | |
Risk-free rate | | 1.68% | | N/A | | | | | | | | | | | | | | |
Expected volatility | | 36.70% | | N/A | | | | | | | | | | | | | | |
Dividend yield | | —% | | N/A | | | | | | | | | | | | | | |
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The expected term of the options granted during the six months ended June 30, 2014 was determined using the "simplified method" as prescribed by Staff Accounting Bulletin ("SAB") Topic 14D.2, which is presumed to be the midpoint between the vesting date and the end of the contractual term. The simplified method was used to determine the expected term of the options granted during the six months ended June 30, 2014, which was consistent with the method used for the options that were granted in the prior year due to the extended period of time that had lapsed since the Company's last option grant, as well as differences in the contractual terms of the option awards compared to options granted in prior periods, such that our historical share option experience did not provide a reasonable basis to estimate the expected term. The risk-free interest rates are based on quoted U.S. Treasury rates for securities with maturities approximating the expected term of the options. Expected volatility is based on the historical volatility of the market price of the Company’s stock. |
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During the three and six months ended June 30, 2014, the Company recorded approximately $59,000 and $106,000 of compensation expense related to options, respectively. No compensation expense related to options was recorded for the three and six months ended June 30, 2013. No options were granted during the six months ended June 30, 2013. No options vested during the six months ended June 30, 2014 and 2013. |
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The intrinsic value of options exercised during the three and six months ended June 30, 2014 was $0.9 million. The intrinsic value of options exercised during the three and six months ended June 30, 2013 was $0.5 million and $0.6 million, respectively. |
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The following table summarizes information about options outstanding and exercisable at June 30, 2014: |
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| | Options Outstanding | | Options Exercisable |
Exercise Prices | | Number Outstanding as of June 30, 2014 | | Weighted | | Weighted | | Number Exercisable as of June 30, 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) | | | | |
$10.28 | | 100 | | | 4.77 | | $ | 10.28 | | | — | | | 0 | | $ | — | |
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$12.97 | | 150 | | | 4.23 | | $ | 12.97 | | | — | | | 0 | | $ | — | |
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| | 250 | | | 4.45 | | $ | 11.89 | | | — | | | 0 | | $ | — | |
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The aggregate intrinsic value of stock options outstanding at June 30, 2014 was $0.2 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 June 30, 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 six months ended June 30, 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 | | 311 | | | $ | 11.49 | | | | | | | | | | | | |
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Vested | | (811 | ) | | $ | 9.44 | | | | | | | | | | | | |
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Forfeited | | (287 | ) | | $ | 9.97 | | | | | | | | | | | | |
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Unvested as of June 30, 2014 | | 1,523 | | | $ | 10.63 | | | | | | | | | | | | |
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For the six months ended June 30, 2014 and 2013, the weighted average grant date fair value for service-based restricted stock was $11.49 and $9.34, respectively. The fair value of service-based restricted stock that vested during these periods was $7.7 million and $4.0 million, respectively. During the six months ended June 30, 2014 and 2013, 337,484 and 176,689 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 June 30, 2014 was $18.6 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 June 30, 2014. |
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As of June 30, 2014, there was $12.2 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 2.73 years. During the three months ended June 30, 2014 and 2013, the Company recorded $1.3 million and $1.6 million, respectively, of compensation expense related to service-based restricted shares. During the six months ended June 30, 2014 and 2013, the Company recorded $2.5 million and $2.9 million, respectively, of compensation expense related to service-based restricted shares. |
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Performance-based Restricted Stock Awards |
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On March 31, 2014, the Compensation Committee approved the 2014 Executive Bonus Plan (the "2014 Plan") for the Company's executives. The fair value of the individual awards will be based upon the achievement of Company-wide and divisional financial goals, as well as personal goals. The 2014 Plan generally provides that 75% of the bonus will be paid in the form of restricted stock and 25% in cash. The performance period for determining the value of the awards is the year ended December 31, 2014. In addition, the restricted stock will vest over three years in equal annual tranches from the date the final performance assessment is made and approved by the Compensation Committee, subject to each executive's continued employment through each vesting date. |
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As of June 30, 2014, there was approximately $2.1 million of unrecognized compensation costs related to the performance-based restricted shares under the 2014 Plan. This compensation cost is being recognized on an accelerated basis over a weighted average period of 2.75 years. For the three and six months ended June 30, 2014, the Company recorded $0.2 million of compensation expense related to these performance-based restricted shares, which is included in current liabilities for the expense related to the first tranche and in long-term liabilities for the second and third tranches. |
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In March and April 2014, the Compensation Committee approved the grant of performance-based restricted shares to two executives in the amounts of 31,250 and 62,500 shares, respectively, which had fair values of $12.03 and $10.28 at the respective service inception dates. The fair value of these grants are remeasured at the close of each reporting period. The aggregate intrinsic value of these unvested performanced-based restricted shares as of June 30, 2014 was $1.1 million, and these shares will vest based upon the achievement of specific personal goals as determined by the Compensation Committee. The March 2014 grant is also subject to the executive's continued employment through the performance period, which ends on December 31, 2014. As of June 30, 2014, there was unrecognized compensation expense of $0.9 million related to these two grants. For the three and six months ended June 30, 2014, we recorded compensation expense of $0.2 million, respectively, for these grants. |
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The fair value of the performance-based restricted shares related to a 2013 grant which vested in the six months ended June 30, 2014 was $0.4 million. |
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There were no performance-based restricted shares granted during the six months ended June 30, 2013. |
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Employee Stock Purchase Plan ("ESPP") |
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During the six months ended June 30, 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-Jan-14 | | 17,640 | | | $ | 10.26 | | | | | | | | | | | | |
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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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| | Six Months Ended June 30, | | | | | | | | | | | | | | |
| | 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 June 30, 2014 and 2013, the Company recorded $29,000 and $20,000, respectively, of compensation expense related to ESPP rights. During the six months ended June 30, 2014 and 2013, the Company recorded $49,000 and $38,000, 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 $2.82 and $1.98 during the six months ended June 30, 2014 and 2013, respectively. The fair value of ESPP rights that vested during the six months ended June 30, 2014 and 2013 was $44,000 and $29,000, respectively. |
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The intrinsic value of outstanding ESPP rights as of June 30, 2014 was $36,000. 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 date. |
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As of June 30, 2014, there was approximately $9,000 of unrecognized compensation cost related to ESPP rights, which is expected to be recognized over a period of one month. |
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The Company received cash from the exercise of options and ESPP rights of $0.7 million and $0.3 million for the six months ended June 30, 2014 and 2013, respectively, for which the Company issued new shares of common stock. |