Stock-Based Awards | STOCK-BASED AWARDS Stock Options The following table summarizes the Company’s stock option activity for the six months ended June 30, 2019 (in thousands, except per share and term information): Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (1) Outstanding, December 31, 2018 3,828 $ 32.41 4.1 $ 70,436 Granted — — Exercised (270 ) 37.59 Forfeited (32 ) 47.50 Outstanding, June 30, 2019 3,526 $ 31.88 3.6 $ 91,853 Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (1) Exercisable at June 30, 2019 3,511 $ 31.87 3.6 $ 91,494 Vested and expected to vest at June 30, 2019 3,526 31.88 3.6 91,839 (1) Based on the Company’s closing stock price of $57.93 on June 30, 2019 and $50.43 on December 31, 2018. Unrecognized compensation expense relating to stock options was $0.1 million at June 30, 2019 , which is expected to be recognized over a weighted-average period of 0.8 years . Restricted Stock Units The Company granted restricted stock units covering 1.4 million shares of its common stock during the six months ended June 30, 2019 . At June 30, 2019 , there were 4.5 million shares of the Company’s common stock issuable upon the vesting of outstanding restricted stock units. Unrecognized compensation expense related to unissued shares of the Company’s common stock subject to unvested restricted stock units was $158.0 million at June 30, 2019 , which is expected to be recognized as expense over the weighted-average period of 2.9 years . Performance-Based Restricted Stock Units The Compensation Committee designed an annual equity compensation structure to further align the compensation levels of certain executives to the performance of the Company through the issuance of performance-based restricted stock units. The number of shares of the Company’s common stock issuable upon the vesting of these performance-based restricted stock unit awards is based upon the Company meeting a combination of constant currency subscription revenue growth rates and unlevered free cash flow margin targets determined at the time of their grants. The total amount of compensation expense recognized is based on the number of shares that the Company determines are probable of vesting. The estimate will be made each reporting period and determined by the Company’s actual and projected revenue and cash flow performance and the compensation expense will be recognized over the vesting term of the awards. The following table summarizes the Company’s issuances of awards under the new compensation award structure: Grant Date Performance Measures Vesting Term Performance Period # of Shares at Target # of Shares at Maximum Grant Date Fair Value per share # of Shares Outstanding at Target (2) # of Shares Outstanding at Maximum (2) March 2017 (a) the Company meeting certain revenue and cash flow targets through December 31, 2019 and (b) the recipient continuing to provide services to the Company through the end of March 2020 Three years Fiscal years 2017, 2018 and 2019 185,270 555,810 $ 41.73 141,540 424,620 February 2018 (a) the Company meeting certain combined constant currency subscription revenue growth and unlevered cash flow margin targets for the year ending December 31, 2020 and (b) the recipient continuing to provide services to the Company through the end of February 2021 Three years Fiscal year 2020 121,764 304,410 $ 40.64 121,764 304,410 February 2018 (a) the Company meeting certain combined constant currency subscription revenue growth and unlevered cash flow margin targets for each of the years ending December 31, 2020, December 31, 2021, and December 31, 2022 and (b) the recipient continuing to provide services to the Company through each respective vest date at the end of February 2020, 2021 and 2022 Five years Fiscal years 2020, 2021 and 2022 (1) 411,412 1,028,530 $ 40.64 411,412 1,028,530 April 2018 (a) the Company meeting certain combined constant currency subscription revenue growth and unlevered cash flow margin targets for the year ending December 31, 2020 and (b) the recipient continuing to provide services to the Company through the beginning of April 2021 Three years Fiscal year 2020 3,572 8,930 $ 39.54 — — April 2018 (a) the Company meeting certain combined constant currency subscription revenue growth and unlevered cash flow margin targets for each of the years ending December 31, 2020, December 31, 2021, and December 31, 2022 and (b) the recipient continuing to provide services to the Company through each respective vest date at the beginning of April 2020, 2021 and 2022 Five years Fiscal years 2020, 2021 and 2022 (1) 53,572 133,930 $ 39.54 11,794 29,485 Grant Date Performance Measures Vesting Term Performance Period # of Shares at Target # of Shares at Maximum Grant Date Fair Value per share # of Shares Outstanding at Target (2) # of Shares Outstanding at Maximum (2) February 2019 (a) the Company meeting certain combined constant currency subscription revenue growth and unlevered cash flow margin targets for the year ending December 31, 2021 and (b) the recipient continuing to provide services to the Company through the beginning of February 2022 Three years Fiscal year 2021 13,178 32,945 $ 58.23 13,178 32,945 February 2019 (a) the Company meeting certain combined constant currency subscription revenue growth and unlevered cash flow margin targets for the year ending December 31, 2021 and (b) the recipient continuing to provide services to the Company through the beginning of February 2022 Three years Fiscal year 2021 80,559 201,398 $ 57.27 80,559 201,398 March 2019 (a) the Company meeting certain combined constant currency subscription revenue growth and unlevered cash flow margin targets for the year ending December 31, 2021 and (b) the recipient continuing to provide services to the Company through the beginning of February 2022 Three years Fiscal year 2021 43,136 107,835 $ 56.15 43,136 107,835 June 2019 (a) the Company meeting certain combined constant currency subscription revenue and unlevered cash flow margin targets for the year ending December 31, 2021 and (b) the recipient continuing to provide services to the Company through the beginning of February 2022 Three years Fiscal year 2021 19,143 47,857 $ 54.84 19,143 47,857 (1) One-third of the total eligible shares shall vest on each of the third, fourth and fifth anniversaries of the grant date. This award is a one-time equity award intended to cover expected grant levels over a three-year period. In exchange, the Compensation Committee does not plan to grant any additional equity awards to recipients of this award until 2021. (2) Excludes an aggregate of 244,565 shares at the maximum level and 89,080 shares at the target level of achievement that were forfeited due to termination of employment as of June 30, 2019. The Company recognized compensation expense related to all performance-based awards in the aggregate amount of $1.8 million and $3.6 million for the three and six months ended June 30, 2019 , respectively. There was no unrecognized compensation expense related to unvested 2017 performance-based restricted stock unit awards at June 30, 2019 . Unrecognized compensation expense related to unvested 2018 and 2019 performance-based restricted stock units was $21.9 million at June 30, 2019 , based on the probable performance target at that date, which is expected to be recognized as expense over the weighted average period of 2.5 years . Employee Stock Purchase Plan Under the Company’s 2010 Employee Stock Purchase Plan (“ESPP”), eligible employees are granted the right to purchase shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. The right to purchase shares is granted twice yearly for six month offering periods in June and December and exercisable on or about the succeeding December and June, respectively, on each year. Stock-Based Compensation Stock-based compensation expense related to stock options, restricted stock units, the ESPP and performance-based restricted stock units is included in the following line items in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Cost of revenue $ 1,786 $ 1,021 $ 2,922 $ 2,023 Sales and marketing 6,809 6,545 12,856 12,791 Research and development 4,319 2,417 8,515 4,725 General and administrative 6,237 5,300 11,903 9,787 Restructuring — 749 — 6,185 Total $ 19,151 $ 16,032 $ 36,196 $ 35,511 |