XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Equity Award Plans | 6 Months Ended
--- | ---
Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity Award Plans | Equity Award Plans Equity Incentive Plans 2014 Equity Incentive Plan Our 2014 Equity Incentive Plan (the "2014 Plan") was adopted by our Board of Directors and approved by our stockholders in March 2014. The 2014 Plan provides for the granting of stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance units and performance shares to our employees, directors and consultants. In addition, effective as of June 10, 2015, our Board of Directors adopted, and our stockholders approved, an amendment and restatement of our 2014 Plan, which increased the number of shares available for issuance under the 2014 Plan by the number of shares available from the 2008 Plan that were canceled or otherwise forfeited or repurchased by us after March 20, 2014. A maximum of 8,310,566 shares may become available from the 2008 Plan for issuance under the 2014 Plan. As of December 31, 2015, we had 3,364,304 shares available for future grant. Annually, the shares authorized for the Plan will increase 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. On January 1, 2016, the number of shares in the 2014 Plan was increased by 4,851,535 shares, which consisted of 3,211,211 shares, representing 5% of the prior year end’s common stock outstanding and 1,640,324 shares for awards under our 2008 Plan that have been canceled, forfeited or repurchased by us between March 21, 2014 and December 31, 2015. During the six months ended June 30, 2016, we granted 672,000 stock options and 3,604,561 stock awards under the 2014 Plan to our employees, directors and consultants. As of June 30, 2016, we had 4,553,483 shares available for future grant, excluding shares eligible to be added from the 2008 Plan as a result of awards that have been canceled, forfeited or repurchased by us after December 31, 2015. As of June 30, 2016, 189,016 shares of our common stock were eligible to be added to the 2014 Plan share reserve which represents awards under our 2008 Plan that have been canceled, forfeited or repurchased by us during the six months ended June 30, 2016. 2014 Employee Stock Purchase Plan The 2014 Employee Stock Purchase Plan (the "2014 Purchase Plan") was adopted by our Board of Directors and approved by our stockholders in March 2014. As of December 31, 2015, we had 542,030 shares available for future purchase. Under the provisions of the 2014 Purchase Plan, on the first day of each fiscal year, starting with January 1, 2015, the number of shares in the reserve will increase by the lesser of (i) 3,500,000 shares, (ii) 1% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as determined by our Board of Directors or other committee administering the 2014 Purchase Plan. On January 1, 2016, the common shares reserved for future purchase was increased by 642,242 shares in accordance with the provisions of the 2014 Purchase Plan. In June 2016, our Board of Directors adopted, and our stockholders approved an amendment to our 2014 Purchase Plan which removed the automatic annual share increase and increased the number of shares available for issuance under the 2014 Purchase Plan by 4,000,000 shares. The participants of the Purchase Plan purchased 552,554 shares during the first six months of 2016, and as of June 30, 2016, we had 631,718 shares available for future purchase, excluding the 4,000,000 shares added to the 2014 Purchase Plan in June 2016. Stock-based Compensation Stock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. The following is a summary of stock-based compensation for stock-based awards granted under the 2014 Plan, the 2008 Plan, and employee stock purchases under the 2014 Purchase Plan recognized during the three and six months ended June 30, 2016 and 2015 (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Stock-based compensation by type of award: |  |  |  |  |  |  |
Stock options | $ | 1,081 |  |  | $ | 1,503 |  |  | $ | 2,181 |  |  | $ | 2,979 |
Stock awards | 3,423 |  |  | 2,130 |  |  | 6,383 |  |  | 4,065 |
Employee stock purchase plan (1) | (635 | ) |  | 372 |  |  | (83 | ) |  | 1,594 |
Total stock-based compensation | $ | 3,869 |  |  | $ | 4,005 |  |  | $ | 8,481 |  |  | $ | 8,638 |
Stock-based compensation by category of expense: |  |  |  |  |  |  |
Cost of revenue | $ | 224 |  |  | $ | 342 |  |  | $ | 589 |  |  | $ | 813 |
Sales and marketing | 1,732 |  |  | 1,873 |  |  | 3,817 |  |  | 3,939 |
Research and development | 1,090 |  |  | 1,273 |  |  | 2,521 |  |  | 2,858 |
General and administrative | 823 |  |  | 517 |  |  | 1,554 |  |  | 1,028 |
| $ | 3,869 |  |  | $ | 4,005 |  |  | $ | 8,481 |  |  | $ | 8,638 |
__________________________________________ (1) Our 2014 Purchase Plan generally provides twenty-four month offering periods which consist of four six-month purchase periods. We record periodic stock-based compensation expense based on estimated contributions determined at the beginning of each offering period and record purchase adjustments for the difference between the estimated and actual contributions at the end of each purchase period. For the purchase period ended on May 20, 2016, the actual contributions were significantly lower than the estimated contributions due to lower stock price which caused more employees to reach the maximum purchase contribution limit and therefore resulted in negative stock-based compensation expense for the three and six months ended June 30, 2016. As of June 30, 2016, we had $33.1 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to stock options, unvested stock awards and 2014 Purchase Plan purchases. This unamortized stock-based compensation expense will be recognized over a weighted-average period of 2.6 years. Determination of Fair Value We use the Black-Scholes option pricing model to determine the grant date fair value of stock options and stock purchases and generally recognize stock-based compensation expense on a straight-line basis over the requisite service period. The determination of the fair value on the date of grant is affected by the estimated underlying common stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates, and expected dividends. The fair value of the stock options and employee stock purchases were determined using the Black-Scholes option pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine. • Expected Term. We estimate the expected life of options based on an analysis of our historical experience of employee exercise and post-vesting termination behavior considered in relation to the contractual life of the option. The expected term for the 2014 Purchase Plan is based on the term of the purchase period. • Risk-Free Interest Rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected terms of stock options and shares to be issued under the 2014 Purchase Plan. • Expected Volatility. Due to the limited trading history of our own common stock, we determined the share price volatility factor based on a combination of the historical volatility of our own common stock and the historical volatility of our peer group. • Dividend Rate. The expected dividend was assumed to be zero as we have never paid dividends and have no current plans to do so. The grant date fair value of RSUs that have time or performance based vesting conditions contingent upon meeting financial and operational targets are equal to the closing market price of our common stock on the grant date. We estimate the grant date fair value of RSUs that have market based vesting conditions using the Monte Carlo simulation method. Stock Option Activity The following table summarizes our stock option activity and related information as of and for the six months ended June 30, 2016 (in thousands, except for years and per share amounts):
| Number of Shares Underlying Outstanding Options |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Outstanding as of December 31, 2015 | 9,291 |  |  | $ | 4.78 |  |  | 7.0 |  |
Granted | 672 |  |  | $ | 5.52 |  |  |  |  |  |
Exercised | (327 | ) |  | $ | 3.69 |  |  |  |  |  |
Canceled (1) | (418 | ) |  | $ | 6.07 |  |  |  |  |  |
Outstanding as of June 30, 2016 | 9,218 |  |  | $ | 4.81 |  |  | 6.6 |  | $ | 19,370 |
Vested and expected to vest as of June 30, 2016 | 9,023 |  |  | $ | 4.80 |  |  | 6.6 |  | $ | 19,048 |
Vested and exercisable as of June 30, 2016 | 6,091 |  |  | $ | 4.40 |  |  | 5.8 |  | $ | 15,181 |
__________________________________________ (1) Common shares granted under the 2008 Plan and canceled after March 20, 2014, are reallocated to the 2014 Plan’s share reserve as they become available for issuance under the 2014 Plan. During the six months ended June 30, 2016, 189,016 shares related to canceled stock options were eligible to be reallocated to the 2014 Plan share reserve. As of June 30, 2016, the aggregate intrinsic value represents the excess of the closing price of our common stock of $6.47 over the exercise price of the outstanding in-the-money options. The following table provides information pertaining to our stock options for the six months ended June 30, 2016 and 2015 (in thousands, except weighted-average fair values):
| Six Months Ended June 30,
| 2016 |  | 2015
Total fair value of options granted | $ | 1,603 |  |  | $ | 869 |
Weighted-average fair value of options granted | $ | 2.38 |  |  | $ | 2.13 |
Intrinsic value of options exercised | $ | 832 |  |  | $ | 1,066 |
The estimated grant-date fair value of our stock options issued to employees was calculated using the Black-Scholes option-pricing model, based on the following assumptions:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Expected term (in years) | n/a |  | 4.8 |  | 4.9 |  | 4.8
Risk-free interest rate | n/a |  | 1.71% |  | 1.42% |  | 1.60%
Expected volatility | n/a |  | 50% |  | 49% |  | 50%
Dividend rate | n/a |  | —% |  | —% |  | —%
Stock Award Activity We have granted time-based stock awards ("RSUs") to our employees, directors and consultants and performance-based stock awards ("PSUs") and market performance-based stock awards ("MSUs") to certain company executives. A summary of stock award activities, including RSUs, PSUs and MSUs during the six months ended June 30, 2016, is as follows (in thousands, except years and per share amounts):
| Time-Based |  | Performance-Based |  | Market Performance-Based |  | Total
Outstanding as of December 31, 2015 | 2,872 |  |  | — |  |  | 580 |  |  | 3,452 |
Granted | 3,058 |  |  | 547 |  |  | — |  |  | 3,605 |
Released | (283 | ) |  | — |  |  | — |  |  | (283 | )
Canceled | (397 | ) |  | (29 | ) |  | — |  |  | (426 | )
Outstanding as of June 30, 2016 | 5,250 |  |  | 518 |  |  | 580 |  |  | 6,348 |
During the six months ended June 30, 2016, we granted 547,000 PSUs with performance-based conditions contingent upon meeting certain financial and operational targets. These PSUs are also subject to service condition vesting requirements with 25% of the eligible PSUs scheduled to vest on each of the first, second, third and fourth year anniversary of the PSU grant date, subject to continued service by the award holder. We granted MSUs covering 540,000 shares and 40,000 shares of our common stock to certain company executives during 2014 and 2015, all of which were outstanding as of June 30, 2016. 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 award’s grant date, subject to continued service by the award holder. The aggregate intrinsic value is the amount that would have been received by the unit holders had all RSUs been vested and released on June 30, 2016. This amount will fluctuate based on the fair market value of our stock. As of June 30, 2016, the aggregated intrinsic value for RSUs, MSUs and PSUs was $41.1 million with a weighted-average remaining service period of 2.8 years. Employee Stock Purchase Plan The fair value of the option component of the 2014 Purchase Plan awards was estimated at the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:
| Three and Six Months Ended June 30,
| 2016 |  | 2015
Expected term (in years) | 1.3 |  | 1.2
Risk-free interest rate | 0.65% |  | 0.32%
Expected volatility | 42.6% |  | 39.6%
Dividend rate | —% |  | —%

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration