Stock Incentive Plans | The Company recognized stock-based compensation expense related to awards granted under its 2009 Stock Option and Incentive Plan (the “2009 Plan”), 2011 Equity Incentive Award Plan (the “ 2011 Plan ”), and ESPP . Total stock-based compensation expense recognized consisted of: Three Months ended September 30, Nine Months ended September 30, 2016 2015 2016 2015 (in thousands) Cost of revenues $ 1,381 $ 761 $ 3,483 $ 2,189 Sales and marketing 1,243 783 3,180 1,973 Research and development 1,969 1,438 5,417 3,961 General and administrative 4,155 3,538 11,376 9,481 $ 8,748 $ 6,520 $ 23,456 $ 17,604 2009 Stock Option and Incentive Plan and 2011 Equity Incentive Award Plan Stock Options The following table summarizes the Company’s stock option activity under the 2009 Plan and 2011 Plan : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Outstanding at January 1, 2016 2,515,329 $ 24.40 7.14 $ 90,818 Granted 14,506 59.78 Exercised (467,268 ) 18.27 Forfeited or expired (57,591 ) 37.84 Outstanding at September 30, 2016 2,004,976 $ 25.70 6.53 $ 159,591 Ending vested and expected to vest at September 30, 2016 1,978,586 $ 25.48 6.51 $ 157,922 Exercisable at September 30, 2016 1,425,363 $ 20.54 5.98 $ 120,810 There were no stock options granted during the three months ended September 30, 2016 . Stock options granted during the nine months ended September 30, 2016 were made under the 2011 Plan. There were no grants under the 2009 Plan during the nine months ended September 30, 2016 . The aggregate intrinsic value of the stock options outstanding at September 30, 2016 represents the value of the Company’s closing stock price of $105.30 on September 30, 2016 in excess of the exercise price multiplied by the number of options outstanding for options that were in-the-money. Options outstanding that are expected to vest are net of estimated future option forfeitures. Following is additional information pertaining to the Company’s stock option activity: Three Months ended September 30, Nine Months ended September 30, 2016 2015 2016 2015 (in thousands, except per option amounts) Weighted average fair value per option granted $ — $ 34.39 $ 27.57 $ 26.13 Grant-date fair value of options vested $ 1,787 $ 1,678 $ 7,079 $ 6,026 Intrinsic value of options exercised $ 9,058 $ 10,227 $ 30,302 $ 33,343 Proceeds received from options exercised $ 2,280 $ 1,807 $ 8,535 $ 8,665 As of September 30, 2016 , total unrecognized stock-based compensation expense related to unvested stock options, adjusted for estimated forfeitures, was $9.9 million and is expected to be recognized over a weighted average period of 1.9 years. Restricted Stock Units, Performance-Vesting Restricted Stock Units, and Performance Awards The fair value of the Company’s RSUs and Performance Awards is measured based upon the closing price of its underlying common stock as of the grant date and is recognized over the vesting term. Upon vesting, RSUs convert into an equivalent number of shares of common stock. The Performance Awards granted represent the right to receive shares of the Company’s common stock, contingent upon the achievement of certain of the Company’s performance metrics during the performance period. On a date subsequent to the performance period, the Compensation Committee of the Board of Directors (the “ Compensation Committee ”) determines and approves the achievement of the performance goals (the “ Determination Date ”) and the earned shares are issued, with 25% of the shares vested upon issuance and the remaining shares to vest 25% on each of the first three anniversaries of the Determination Date , subject to the continuous employment of the participant through such dates. In October 2015, in connection with the acquisition of Mortgage Returns, the Company agreed to pay up to 29,006 of performance-vesting RSUs for a total value of $2.0 million to the former Chief Executive Officer of Mortgage Returns upon achievement of certain performance criteria and a service requirement during the performance period of October 23, 2015 through October 23, 2019. The performance-vesting RSUs will vest annually based on the achievement of the performance criteria and the service requirement. In February 2016, the Company granted Sigmund Anderman, current Chairman of the Board of Directors of the Company (“Mr. Anderman”), 6,692 performance-vesting RSUs and an option to purchase 14,506 shares of Company common stock. Mr. Anderman may earn between zero and 2.0 shares of common stock for each performance-vesting RSU. As of September 30, 2016 , the Company expects that each of these performance-vesting RSUs will convert to 1.41 shares of common stock on the Determination Date in 2017. Additionally, in February 2016, the Company granted 64,449 Performance Awards with a performance period of January 1, 2016 through December 31, 2016 to the Company’s executives under the 2011 Plan. The designated participants may earn between zero and 2.0 shares of common stock for each Performance Award. As of September 30, 2016, the Company expects that each of these Performance Awards will convert to 2.0 shares of common stock on the Determination Date in 2017. The following table summarizes the Company’s RSU , Performance Award and performance-vesting RSU activity: RSUs Performance Awards and Performance-Vesting RSUs Number of Shares Weighted Average Grant Date Fair Value Per Share Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 2016 748,688 $ 45.52 508,282 $ 34.68 Granted 535,527 77.59 138,330 59.78 Released (201,272 ) 41.17 (236,219 ) 28.87 Forfeited or expired (75,141 ) 56.56 — — Outstanding at September 30, 2016 1,007,802 $ 62.61 410,393 $ 46.48 Ending vested and expected to vest at September 30, 2016 891,284 410,393 RSU s, performance-vesting RSUs and Performance Awards that are expected to vest are presented net of estimated future forfeitures. RSU s released during the nine months ended September 30, 2016 and 2015 had an aggregate intrinsic value of $16.8 million and $9.6 million , respectively, and had an aggregate grant-date fair value of $8.3 million and $3.8 million , respectively. Performance-vesting RSUs and Performance Awards released during the nine months ended September 30, 2016 and 2015 had an aggregate intrinsic value of $21.6 million and $13.2 million , respectively, and had an aggregate grant-date fair value of $6.8 million and $4.5 million , respectively. The number of RSU s released includes shares that the Company withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. As of September 30, 2016 , total unrecognized compensation expense related to unvested RSU s, performance-vesting RSUs and Performance Awards was $56.2 million and is expected to be recognized over a weighted average period of 2.6 years. Employee Stock Purchase Plan For the nine months ended September 30, 2016 and 2015 , employees purchased 101,816 shares and 110,598 shares, respectively, under the ESPP for a total of $6.7 million and $4.1 million , respectively. As of September 30, 2016 , unrecognized compensation expense related to the current semi-annual ESPP period, which ends on February 27, 2017 , was $1.0 million and is expected to be recognized over five months. Executive Incentive Plan On March 14, 2016, the compensation committee adopted the Ellie Mae, Inc. Executive Incentive Plan (the “Executive Incentive Plan”). The Executive Incentive Plan was approved by the Company’s stockholders on May 25, 2016. The Executive Incentive Plan has a term of five years from the date of approval by the stockholders, expiring May 25, 2021, and may be terminated, amended or suspended by the compensation committee at any prior time, and may also be reinstated. The Company currently expects to issue cash bonus and performance-based equity awards under the Executive Incentive Plan to the Company’s executive officers commencing in 2017. Shares underlying equity awards from the Executive Incentive Plan will be issued from our 2011 Plan. The equity awards have the following limitations: Stock Option Limitations. The maximum number of shares that may be granted as an incentive stock option under the Executive Incentive Plan is 70,000,000. No participant will be eligible to receive a stock option covering more than 1,000,000 shares in any calendar year. Performance Units/Performance Share Limitations. No participant will be eligible to receive performance units or performance shares having a grant date value (assuming maximum payout) greater than $10,000,000 or covering more than 1,000,000 shares, whichever is greater, in any calendar year. Valuation Information The fair value of stock options and stock purchase rights granted under the 2009 Plan, the 2011 Plan , and the ESPP were estimated at the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions: Three months ended September 30, Nine Months ended September 30, 2016 2015 2016 2015 Stock option plans: Risk-free interest rate — % 1.87 % 1.38 % 1.75 % Expected life of options (in years) 0 6.08 6.08 5.99 Expected dividend yield — % — % — % — % Volatility — % 48 % 47 % 48 % Employee Stock Purchase Plan: Risk-free interest rate 0.46 % 0.24 % 0.36 % 0.19 % Expected life of options (in years) 0.50 0.50 0.50 0.50 Expected dividend yield — % — % — % — % Volatility 33 % 44 % 38 % 39 % Common Stock The following numbers of shares of common stock were reserved and available for future issuance at September 30, 2016 : Reserved Shares Options and awards outstanding under stock option plans 3,423,171 Shares available for future grant under the 2011 Equity Incentive Award Plan 3,896,188 Shares available under the Employee Stock Purchase Plan 1,398,843 Total 8,718,202 In February 2016 , 295,665 additional shares were reserved under the ESPP and 1,478,325 additional shares were reserved under the 2011 Plan , pursuant to the automatic increase provisions in each plan. Stock Offering In August 2016 , the Company completed a public offering of common stock and sold a total of 3,162,500 shares of its common stock for total cash proceeds of approximately $271.4 million , net of underwriting discounts, and offering costs and expenses of approximately $13.2 million . Stock Repurchase Program In May 2014 , the Company’s board of directors approved a stock repurchase program under which the Company is authorized to repurchase up to $75.0 million of its common stock , which expires in May 2017 . All shares are retired upon repurchase. The Company did not repurchase any shares during the nine months ended September 30, 2016 . As of September 30, 2016 , $43.5 million remained available for future repurchases under the program. |