| Stockholders' Equity | 5. STOCKHOLDERS’ EQUITY
Common Stock
Each share of common stock is entitled to one vote for matters to
be voted on by the stockholders of the Company. The holders of
common stock are also entitled to receive dividends whenever
declared by the Board of Directors from legally available funds.
The Company has not paid a dividend since its inception, and has no
current plans to do so.
2014 Stock Option and Incentive Plan
The Company’s 2014 Stock Option and Incentive Plan (the
“2014 Option Plan”) was adopted by the Company’s
board of directors in September 2014. The 2014 Option Plan was
approved by the Company’s stockholders in November 2014 and
became effective immediately prior to the closing of the
Company’s initial public offering. All remaining shares
available in the 2011 Stock Option and Grant Plan (the “2011
Option Plan”) rolled into the 2014 Option Plan following the
consummation of the initial public offering. The 2014 Option Plan
allows the compensation committee to make equity-based incentive
awards to the Company’s officers, employees, directors and
other key persons (including consultants).
The Company has initially reserved 6,000,000 shares of the
Company’s common stock for the issuance of awards under the
2014 Option Plan, plus 923,732 shares of the Company’s common
stock remaining available for issuance under the Company’s
2011 Option Plan. The 2014 Option Plan provides that the number of
shares reserved and available for issuance under the plan will
automatically increase each January 1, beginning on
January 1, 2015, by 5 percent of the outstanding number of
shares of the Company’s common stock on the immediately
preceding December 31 or such lesser number of shares as
determined by the Company’s compensation committee. This
number is subject to adjustment in the event of a stock split,
stock dividend or other change in the Company’s
capitalization. On January 1, 2015, the shares reserved for
issuance increased by 2,136,240, resulting in total shares reserved
for issuance under the 2014 Option Plan of 9,059,972. As of
June 30, 2015, 5,053,674 of such shares remained available for
issuance.
2014 Employee Stock Purchase Plan
In September 2014, the Company’s board of directors adopted
and approved, and in November 2014 the Company’s stockholders
adopted and approved, the Employee Stock Purchase Plan (the
“ESPP”). The ESPP initially reserved and authorized the
issuance of up to a total of 2,500,000 shares of common stock
to participating employees. The ESPP provides that the number of
shares reserved and available for issuance will automatically
increase each January 1, beginning on January 1, 2015, by
the lesser of (i) 1,000,000 shares of common stock,
(ii) 1 percent of the outstanding number of shares of the
Company’s common stock on the immediately preceding
December 31, or (iii) such lesser number of shares as
determined by the ESPP administrator. This number is subject to
adjustment in the event of a stock split, stock dividend or other
change in the Company’s capitalization. On January 1,
2015, the shares reserved for issuance increased by 427,248 for
total shares reserved for issuance under the ESPP of 2,927,248 as
of June 30, 2015.
Each employee who is a participant in the ESPP may purchase shares
by authorizing payroll deductions of up to 15 percent of his or her
base compensation during an offering period. Unless the
participating employee has previously withdrawn from the offering,
accumulated payroll deductions will be used to purchase shares on
the last business day of the offering period at a price equal to 85
percent of the fair market value of the shares on the first
business day or the last business day of the offering period,
whichever is lower. Under applicable tax rules, an employee may
purchase no more than $25,000 worth of shares of common stock,
valued at the start of the purchase period, under the ESPP in any
calendar year. There is no minimum holding period associated with
shares purchased pursuant to this plan.
As of June 30, 2015, there was $1.4 million of unrecognized
stock-based compensation expense related to the ESPP, which is
expected to be recognized over a weighted-average period of 0.5
years.
A summary of activity under the stock option plan and related
information for the six months ended June 30, 2015 is
presented below:
Number of Weighted- Weighted- Aggregate
(In thousands)
Outstanding—December 31, 2014 13,953,894 $ 8.04 8.80 $ 264,531
Options granted 811,552 $ 22.91
Options exercised (1,189,626 ) $ 2.22
Options cancelled/forfeited (693,386 ) $ 9.15
Outstanding—June 30, 2015 12,882,434 $ 9.46 8.35 $ 204,413
Vested and expected to vest—June 30, 2015 12,063,109 $ 9.21 8.31 $ 194,415
Exercisable—June 30, 2015 3,680,073 $ 3.70 7.45 $ 79,565
Aggregate intrinsic value represents the difference between the
exercise price of the options to purchase common stock and the fair
market value of the Company’s common stock. The aggregate
intrinsic value of options exercised for the three months ended
June 30, 2015 and 2014 was $18.0 million and $1.6 million,
respectively, and for the six months ended June 30, 2015 and
2014 was $26.6 million and $2.0 million, respectively.
Restricted Stock
A summary of information related to restricted stock for the six
months ended June 30, 2015 is presented below:
Number of Option Plans Number of Weighted- Weighted Average Aggregate
(In thousands)
Unvested balance—December 31, 2014 672,865 894,107 $ 0.62 $ 13.70 $ 39,607
Vested (315,978 ) (641,677 ) $ 0.65 $ 13.70
Canceled/forfeited
—
—
—
—
Unvested balance—June 30, 2015 356,887 252,430 $ 0.79 $ 13.70 $ 18,996
( * The weighted-average grant-date fair
value per share relates to 132,506 shares of restricted stock paid
as part of the acquisition of XA Secure, of which, fifty percent of
these shares vested as of June 30, 2015. See Note
3—“Business Combinations” for additional
information regarding this transaction.
As of June 30, 2015, there was $44.6 million of unrecognized
stock-based compensation expense related to unvested stock options
and restricted stock to be recognized over a weighted-average
period of 2.9 years.
Restricted Stock Units
A summary of information related to restricted stock units
(“RSUs”) for the six months ended June 30, 2015 is
presented below:
Number of Option Plan Weighted Average
Unvested balance—December 31, 2014 56,250 $ 16.00
Granted 2,842,927 25.40
Vested (49,102 ) 21.97
Canceled/forfeited (8,480 ) 25.83
Unvested balance—June 30, 2015 2,841,595 $ 25.48
As of June 30, 2015, there was $60.4 million of unrecognized
stock-based compensation expense related to RSUs to be recognized
over a weighted-average period of 2.8 years.
Restricted Stock and Stock Options Subject to
Repurchase
The 2011 Option Plan allowed for the granting of options that may
be exercised before the options have vested. Shares issued as a
result of early exercise and shares that had not vested are deemed
to be restricted stock and are subject to a vesting schedule
identical to the vesting schedule of the related restricted stock
and options, as well as certain other restrictions. Shares issued
as a result of early exercise that have not vested are subject to
repurchase by the Company upon termination of the purchaser’s
employment or services, at the price paid by the purchaser, and are
not deemed to be issued for accounting purposes until those related
shares vest. The amounts received in exchange for these shares have
been recorded as a liability on the accompanying balance sheets and
will be reclassified into common stock and additional
paid-in-capital as the shares vest. The Company’s right to
repurchase these shares generally lapses 1/48 of the original grant
date per month over four years.
The number of shares of restricted stock and early exercised
options to purchase common stock outstanding subject to the
Company’s right of repurchase at prices ranging from $0.18 to
$14.22 per share as of June 30, 2015 was 626,889. The
liability for shares subject to repurchase as of June 30, 2015
was $1.4 million, of which $0.8 million is included in accrued
liabilities and $0.6 million is included in other long-term
liabilities.
Stock-based Compensation Expense
Total stock-based compensation expense, including stock-based
compensation expense to non-employees, by category was as follows
(in thousands):
Three Months Ended Six Months Ended
2015 2014 2015 2014
Cost of revenue $ 521 $ 98 $ 791 $ 171
Sales and marketing 1,947 257 3,364 435
Research and development 2,231 295 4,354 569
General and administrative 2,447 795 3,831 2,418
Total stock-based compensation expense $ 7,146 $ 1,445 $ 12,340 $ 3,593 |
