Equity Incentive Plans and Stock-Based Compensation | Equity Incentive Plans and Stock-Based Compensation Equity Incentive Plans 2014 Equity Incentive Plan The 2014 Equity Incentive Plan (the “2014 Plan”) provides for the granting of stock options, restricted stock awards, restricted stock units (“RSUs”), performance-based RSUs (“PSUs”), stock appreciation rights, performance units and performance shares to our employees, consultants and members of our board of directors. In June 2015, our board of directors adopted and our stockholders approved an amendment and restatement of the 2014 Plan, which increased the number of shares available for issuance under the 2014 Plan by the number of shares granted under the 2008 Stock Plan (the “2008 Plan”) that were or may in the future be canceled or otherwise forfeited or repurchased after March 20, 2014. The shares authorized for the 2014 Plan increase annually by the least of (i) 8,000,000 shares, (ii) 5% of the outstanding shares of common stock on the last day of our immediately preceding fiscal year, or (iii) such other amount as determined by our Board of Directors. Accordingly, effective January 1, 2019 , the number of shares in the 2014 Plan increased by 3,715,060 shares, representing 5% of the prior year end’s common stock outstanding. As of March 31, 2019, we had 12,613,705 shares available for future grant under the 2014 Plan. To date, we have granted stock options, RSUs and PSUs under the 2014 Plan. Stock options expire no more than 10 years from the grant date and generally vest over four years . In the case of an incentive stock option granted to an employee who, at the time of grant, owns stock representing more than 10% of the total combined voting power of all classes of stock, the per share exercise price will be no less than 110% of the fair market value per share on the date of grant, and the incentive stock option will expire no later than five years from the date of grant. For incentive stock options granted to any other employees and nonstatutory stock options granted to employees, consultants, or members of our board of directors, the per share exercise price will be no less than 100% of the fair market value per share on the date of grant. RSUs and PSUs generally vest over one to four years . 2014 Employee Stock Purchase Plan The 2014 Employee Stock Purchase Plan (the “2014 Purchase Plan”) was suspended effective March 16, 2018 due to the delay of the Form 10-K filing for the year ended December 31, 2017. In October 2018, the Board approved amending the 2014 Purchase Plan (the “Amended 2014 Purchase Plan”) in order to, among other things, reduce the maximum contribution participants can make under the plan from 15% to 10% of eligible compensation. The Amended 2014 Purchase Plan also reflects revised offering periods, which were changed from 24 months to six months in duration and that begin on or about December 1 and June 1 each year, starting in December 2018. The Amended 2014 Purchase Plan permits eligible employees to purchase shares of our common stock through payroll deductions with up to 10% of their gross eligible earnings subject to certain Internal Revenue Code limitations. The purchase price of the shares is 85% of the lower of the fair market value of our common stock on the first day of a six-month offering period or the relevant purchase date. In addition, no participant may purchase more than 1,500 shares of common stock in each purchase period. As of March 31, 2019, the Company had 3,065,182 shares available for future issuance under the Amended 2014 Purchase Plan. During the three months ended March 31, 2019, there was no stock purchased by employees under the Amended 2014 Purchase Plan. Stock-Based Compensation A summary of our stock-based compensation expense is as follows (in thousands): Three Months Ended March 31, 2019 2018 Stock-based compensation by type of award: Stock options $ 184 $ 329 Stock awards 3,474 2,665 Employee stock purchase rights (1) 238 5,157 $ 3,896 $ 8,151 Stock-based compensation by category of expense: Cost of revenue $ 324 $ 893 Sales and marketing 1,321 2,765 Research and development 1,331 3,382 General and administrative 920 1,111 $ 3,896 $ 8,151 (1) Amount for the three months ended March 31, 2018 includes $4.1 million of accelerated stock-based compensation expense. In March 2018, as a result of a suspension of the 2014 Purchase Plan due to our non-timely filing status, all unrecognized stock-based compensation expense related to the 2014 Purchase Plan was accelerated and recognized within the condensed consolidated statement of operations. As of March 31, 2019 , the Company had $28.7 million of unrecognized stock-based compensation expense related to unvested stock-based awards which will be recognized over a weighted-average period of 2.5 years. Stock Options The following tables summarize our stock option activities and related information: Number of Shares (thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value (thousands) Outstanding as of December 31, 2018 4,674 $ 5.19 Granted — $ — Exercised (305 ) $ 3.36 Canceled (47 ) $ 8.10 Outstanding as of March 31, 2019 4,322 $ 5.28 4.9 $ 9,498 Vested and exercisable as of March 31, 2019 3,855 $ 5.14 4.4 $ 9,061 As of March 31, 2019 , the aggregate intrinsic value represents the excess of the closing price of our common stock of $7.09 over the exercise price of the outstanding in-the-money options. The intrinsic value of options exercised was $1.1 million during each of the three months ended March 31, 2019 and 2018 . Stock Awards We have granted RSUs to our employees, consultants and members of our board of directors, and PSUs and market performance-based restricted stock units (“MSUs”) to certain executives. In 2014 and 2015, we granted 540,000 MSUs and 40,000 MSUs, respectively, to certain executives. These MSUs will vest if the closing price of our common stock remains above certain predetermined target prices for 20 consecutive trading days within a 4 -year period following the grant date, subject to continued service by the award holder. As of March 31, 2019, none of these MSUs were vested and all of the MSUs granted in 2014 were expired. In February 2016, we granted 547,000 PSUs with certain financial and operational targets. Actual performance, as measured at the time and prior to the restatement of the 2016 financial statements, resulted in participants achieving 80% of target. Given the PSUs did not contain explicit or implicit claw back rights, there was no change to stock-based compensation expense for the impact of the previously disclosed restatement of the 2016 consolidated financial statements. As of March 31, 2019 , 253,203 shares had vested, 200,297 shares were forfeited, and the remaining shares will vest (as to 80% ) in February 2020 subject to continued service vesting requirements. In October 2016, we granted 60,641 PSUs with certain financial and operational targets. To the extent they become eligible to vest upon achievement of the performance targets, these PSUs additionally are subject to service condition vesting requirements with scheduled vesting dates of March 2017 through June 2018. As of March 31, 2019 , 30,320 shares were vested and 30,321 shares were forfeited. In October 2018, we granted 464,888 PSUs with certain financial targets. These PSUs will become eligible to vest at 75% upon the achievement of the performance targets by December 31, 2020, and are subject to service condition vesting requirements. The remaining 25% of these PSUs will become eligible to vest on the first anniversary of the initial vesting date. None of these PSUs were vested as of March 31, 2019. The following table summarizes our stock award activities and related information: Number of Shares (thousands) Weighted-Average Grant Date Fair Value Weighted-Average Remaining Vesting Term (years) Nonvested as of December 31, 2018 5,974 $ 6.51 Granted 248 $ 6.87 Released (577 ) $ 6.30 Canceled (259 ) $ 6.72 Nonvested as of March 31, 2019 5,386 $ 6.54 1.5 The aggregate fair value of stock awards released as of the respective vesting dates was $3.8 million and $4.3 million for the three months ended March 31, 2019 and 2018 , respectively. |