COMMON STOCK AND STOCK-BASED COMPENSATION PLANS (Tables)

9 Months Ended

Sep. 30, 2015

A summary of the Company’s stock option and SARs activities and related information for the nine months ended September 30, 2015, are as follows:


	Number of options and SAR units			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic- value
Outstanding as of December 31, 2014		3,316,380		$	16.50
Granted (1)		172,500			19.42
Exercised		(538,490	)		10.54
Forfeited or expired		(196,142	)		21.13

Outstanding as of September 30, 2015 (2)		2,754,248		$	17.52		4.4	$	7,355,416

Exercisable as of September 30, 2015 (3)		1,820,312		$	18.06		3.5	$	5,187,686

(1)	The SAR units are convertible for a maximum number of shares of the Company’s common stock equal to 75% of the SAR units subject to the grant.

(2)	Due to the ceiling imposed on the SAR grants, the outstanding amount equals a maximum of 2,405,770 shares of the Company’s common stock issuable upon exercise.

(3)	Due to the ceiling imposed on the SAR grants, the exercisable amount equals a maximum of 1,643,348 shares of the Company’s common stock issuable upon exercise.

Summary of Restricted Stock Units Activity

A summary of the Company’s RSU activities and related information for the nine months ended September 30, 2015, are as follows:


	Number of RSUs			Weighted average Grant-Date fair value
Unvested as of December 31, 2014		—		$	—
Granted		238,000			19.74
Vested		—			—
Forfeited or expired		(7,000	)		19.83

Unvested as of September 30, 2015		231,000		$	19.74

Expected to vest after September 30, 2015		214,500		$	19.74

Equity-Based Compensation Expense Included in Interim Condensed Consolidated Statements of Income

The following table shows the total equity-based compensation expense included in the interim condensed consolidated statements of income:


	Nine months ended September 30,				Three months ended September 30,
	2015		2014		2015		2014
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Cost of revenue	$	111	$	159	$	34	$	45
Research and development, net		1,323		1,575		438		441
Sales and marketing		395		753		151		185
General and administrative		966		1,496		496		451

Total equity-based compensation expense	$	2,795	$	3,983	$	1,119	$	1,122

Assumptions Used to Estimate Fair Value of Employee Stock Purchase Plan

The fair value for rights to purchase shares of common stock under the Company’s employee stock purchase plan was estimated on the date of grant using the following assumptions:


	Nine months ended September 30,				Three months ended September 30,
	2015		2014		2015		2014
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Expected dividend yield		0%		0%		0%		0%
Expected volatility		35%-36%		29%-52%		35%-36%		29%
Risk-free interest rate		0.1%-0.3%		0.1%-0.2%		0.2%-0.3%		0.1%
Expected forfeiture		0%		0%		0%		0%
Contractual term of up to		24 months		24 months		24 months		24 months

Stock Appreciation Rights (SARs)

Assumptions Used to Estimate Fair Value of Stock Options and SARs Granted to Employees and Non-employees Directors

The fair value for the Company’s stock options and SARs (other than share issuances in connection with the employee stock purchase plan, as detailed below) granted to employees and non-employees directors was estimated using the following assumptions:


	Nine months ended September 30,						Three months ended September 30,
	2015			2014			2015			2014
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		33%-49	%		36%-52	%		35%-49	%		36%-51	%
Risk-free interest rate		0.2%-2.4	%		0.1%-2.5	%		0.3%-2.4	%		0.1%-2.2	%
Expected forfeiture (employees)		10	%		10	%		10	%		10	%
Expected forfeiture (executives)		5	%		5	%		5	%		—
Contractual term of up to		10 Years			10 Years			10 Years			7 Years
Suboptimal exercise multiple (employees)		2.1			2.1			2.1			2.1
Suboptimal exercise multiple (executives)		2.4			2.4			2.4			—