| 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 initially reserved 6,000,000 shares of the
Company’s common stock for the issuance of awards under the
2014 Option Plan, and has 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
September 30, 2015, 4,412,425 of such shares remained
available for issuance.
2014 Employee Stock Purchase Plan
The Company’s Employee Stock Purchase Plan (the
“ESPP”) was adopted and approved by the Company’s
board of directors in September 2014, adopted and approved by the
Company’s stockholders in November 2014, and most recently
was amended in August 2015, to allow employees of certain of the
Company’s non-U.S. subsidiaries to participate in 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 resulting in total
shares reserved for issuance under the ESPP of 2,927,248 as of
September 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 September 30, 2015, there was $1.1 million of
unrecognized stock-based compensation expense related to the ESPP,
which is expected to be recognized over a weighted-average period
of 0.6 years.
A summary of activity under the stock option plan and related
information for the nine months ended September 30, 2015 is
presented below:
Number of Shares Underlying Outstanding Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value
(In thousands)
Outstanding—December 31, 2014 13,953,894 $ 8.04 8.80 $ 264,531
Options granted 829,652 $ 22.96
Options exercised (1,738,705 ) $ 2.87
Options cancelled/forfeited (980,360 ) $ 10.08
Outstanding—September 30, 2015 12,064,481 $ 9.65 8.10 $ 148,610
Vested and expected to vest—September 30, 2015 11,399,572 $ 9.43 8.07 $ 142,889
Exercisable—September 30, 2015 4,428,028 $ 5.56 7.47 $ 72,308
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
September 30, 2015 and 2014 was $11.8 million and $0.9
million, respectively, and for the nine months ended
September 30, 2015 and 2014 was $38.4 million and $2.9
million, respectively.
Restricted Stock
A summary of information related to restricted stock for the nine
months ended September 30, 2015 is presented below:
Number of Shares Issued Under the Stock Option Plans Number of Shares Issued Outside the Stock Option Plans Weighted- Average Exercise Price Per Share Weighted Average Grant Date Fair Value Per Share (*) Aggregate Intrinsic Value
(In thousands)
Unvested balance—December 31, 2014 672,865 894,107 $ 0.62 $ 13.70 $ 39,607
Granted
— 1,424,946
— $ 23.76
Vested (421,437 ) (1,594,897 ) $ 0.56 $ 23.09
Canceled/forfeited
—
—
—
—
Unvested balance—September 30, 2015 251,428 724,156 $ 0.76 $ 22.59 $ 9,295
( * The weighted-average grant-date fair
value per share relates to 132,506 and 1,424,946 shares of
restricted stock paid as part of the acquisitions of XA Secure and
Onyara, respectively. As of September 30, 2015, 66,253 of the
XA Secure and 921,643 of the Onyara shares were vested. See Note
3—“Business Combinations” for additional
information regarding this transaction.
As of September 30, 2015, there was $56.4 million of
unrecognized stock-based compensation expense related to unvested
stock options and restricted stock to be recognized over a
weighted-average period of 2.6 years.
Restricted Stock Units
A summary of information related to restricted stock units
(“RSUs”) for the nine months ended September 30,
2015 is presented below:
Number of Shares Issued Under the 2014 Option Plan Weighted Average Grant Date Fair Value Per Share
Unvested balance—December 31, 2014 56,250 $ 16.00
Granted 3,579,771 25.36
Vested (49,102 ) 21.97
Canceled/forfeited (84,175 ) 25.85
Unvested balance—September 30, 2015 3,502,744 $ 24.89
As of September 30, 2015, there was $82.4 million of
unrecognized stock-based compensation expense related to RSUs to be
recognized over a weighted-average period of 2.6 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 September 30, 2015 was 467,123. The
liability for shares subject to repurchase as of September 30,
2015 was $1.1 million, of which $0.6 million is included in accrued
liabilities and $0.5 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 September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Cost of revenue $ 825 $ 149 $ 1,616 $ 320
Sales and marketing 3,518 543 6,882 978
Research and development 3,897 577 8,251 1,146
General and administrative 3,139 630 6,970 3,048
Total stock-based compensation expense $ 11,379 $ 1,899 $ 23,719 $ 5,492 |
