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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock Options and Awards The Company’s equity incentive program is a long-term retention program that is intended to attract, retain, and provide incentives for talented employees, consultants, officers, and directors and to align stockholder and employee interests. The Company may grant time based options, market condition based options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance units, and other stock-based or cash-based awards to employees, officers, directors, and consultants. Under this program, stock options may be granted at prices not less than the fair market value on the date of grant for stock options. These options generally vest over four years and expire from seven to ten years from the date of grant. In addition to time based vesting, market condition based options are subject to a market condition: the closing price of the Company stock must exceed a certain level for a number of trading days within a specified timeframe or the options will be cancelled before the expiration of the options. Restricted stock generally vests over one year. RSUs generally vest over three years. Awards granted other than an option or stock appreciation right reduce the common stock shares available for grant under the program by 1.75 shares for each share issued.
| June 30, 2016
Common stock shares available for grant | 653,077 |
Standard and market condition stock options outstanding | 3,521,481 |
Restricted stock awards outstanding | 77,540 |
RSU's outstanding | 510,234 |
Employee Stock Purchase Plan The Company has an Employee Stock Purchase Plan (“ESPP”). Under the ESPP, eligible employees may purchase common stock through payroll deductions at a purchase price of 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or the purchase date. Participants may not purchase more than 2,000 shares in a six-month offering period or purchase stock having a value greater than $25,000 in any calendar year as measured at the beginning of the offering period. A total of 1,000,000 shares of common stock have been reserved for issuance under the ESPP. As of June 30, 2016, 621,269 shares had been purchased since the inception of the ESPP in 1999. Under ASC 718-10, the ESPP is considered a compensatory plan and the Company is required to recognize compensation cost related to the fair value of the award purchased under the ESPP. Shares purchased under the ESPP for the six months ended June 30, 2016 are listed below. Shares purchased under the ESPP for the six months ended June 30, 2015 are 23,713. The intrinsic value listed below is calculated as the difference between the market value on the date of purchase and the purchase price of the shares.
| Six Months Ended June 30, 2016
Shares purchased under ESPP | 17,711 |
Average price of shares purchased under ESPP | $ | 7.21 |
Intrinsic value of shares purchased under ESPP | $ | 23,000 |
Summary of Standard Stock Options The following table sets forth the summary of activity with respect to standard stock options granted under the Company’s stock option plans for the six months ended June 30, 2016:
|  | Six Months Ended June 30, 2016
Beginning outstanding balance |  | 3,596,533 |
Granted |  | 444,769 |
Exercised |  | (280,676 | )
Forfeited |  | (219,457 | )
Expired |  | (244,688 | )
Ending outstanding balance |  | 3,296,481 |
Aggregate intrinsic value of options exercised |  | $ | 700,000 |
Weighted average fair value of options granted |  | 3.72 |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the exercise price of the Company’s common stock for the options that were in-the-money. Information regarding these standard stock options outstanding at June 30, 2016 is summarized below:
|  | Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value (in millions)
June 30, 2016 |  |  |  |  |  |  |  |
Options outstanding |  | 3,296,481 |  |  | $ | 8.51 |  |  | 4.18 |  | $ | 2.5 |
Options vested and expected to vest using estimated forfeiture rates |  | 3,104,511 |  |  | 8.46 |  |  | 4.08 |  | 2.5 |
Options exercisable |  | 2,097,193 |  |  | 8.08 |  |  | 3.42 |  | 2.4 |
Summary of Market Condition Based Stock Options The following table sets forth activity with respect to market condition based stock options granted under the Company’s stock option plans for the six months ended June 30, 2016:
|  | Six Months Ended June 30, 2016
Beginning outstanding balance |  | 200,000 |
Granted |  | 75,000 |
Exercised |  | — |
Canceled |  | (50,000 | )
Ending outstanding balance |  | 225,000 |
Aggregate intrinsic value of options exercised |  | $ | — |
Weighted average fair value of options granted |  | 3.68 |
Information regarding these market condition based stock options outstanding at June 30, 2016 is summarized below:
|  | Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value (in millions)
June 30, 2016 |  |  |  |  |  |  |  |
Options outstanding |  | 225,000 |  |  | $ | 8.39 |  |  | 6.00 |  | $ | — |
Options vested and expected to vest using estimated forfeiture rates |  | 202,048 |  |  | 8.38 |  |  | 5.99 |  | — |
Options exercisable |  | 46,875 |  |  | 8.09 |  |  | 5.67 |  | — |
Summary of Restricted Stock Units RSU activity for the six months ended June 30, 2016 was as follows:
|  | Six Months Ended June 30, 2016
Beginning outstanding balance |  | 487,117 |
Awarded |  | 295,880 |
Released |  | (214,222 | )
Forfeited |  | (58,541 | )
Ending outstanding balance |  | 510,234 |
Weighted average grant date fair value of RSUs granted |  | $ | 8.85 |
Total fair value of RSUs released |  | 1,806,000 |
Information regarding RSUs outstanding at June 30, 2016 is summarized below:
|  | Number of Shares |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value (in millions)
June 30, 2016 |  |  |  |  |  |
RSUs outstanding |  | 510,234 |  |  | 1.37 |  | $ | 3.7 |
RSUs vested and expected to vest using estimated forfeiture rates |  | 385,983 |  |  | 1.25 |  | 2.8 |
Summary of Restricted Stock Awards Restricted stock award activity for the six months ended June 30, 2016 was as follows:
|  | Six Months Ended June 30, 2016
Beginning outstanding balance |  | 21,356 |
Awarded |  | 77,540 |
Released |  | (21,356 | )
Forfeited |  | — |
Ending outstanding balance |  | 77,540 |
Weighted average grant date fair value of restricted stock awarded |  | $ | 6.52 |
Total fair value of restricted stock awards released |  | 139,000 |
Stock Plan Assumptions The assumptions used to value option grants under the Company’s stock plans were as follows:
|  |  |  |  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  |  |  |  | 2016 |  | 2015 |  | 2016 |  | 2015
Standard Stock Options |  |  |  |  |  |  |  |  |  |  |
Expected life (in years) |  |  |  |  | 4.5 |  |  | 4.6 |  |  | 4.5 |  |  | 4.7 |
Volatility |  |  |  |  | 55 | % |  | 55 | % |  | 55 | % |  | 56 | %
Interest rate |  |  |  |  | 1.1 | % |  | 1.4 | % |  | 1.2 | % |  | 1.4 | %
Dividend yield |  |  |  |  | N/A |  |  | N/A |  |  | N/A |  |  | N/A |
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Market Condition Based Stock Options |  |  |  |  |  |  |  |
Expected life (in years) |  | N/A |  | N/A |  | 7.0 |  |  | 7.0 |
Volatility |  | N/A |  | N/A |  | 59 | % |  | 65 | %
Interest rate |  | N/A |  | N/A |  | 1.6 | % |  | 1.9 | %
Dividend yield |  | N/A |  | N/A |  | N/A |  |  | N/A |
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
Employee Stock Purchase Plan |  |  |  |  |  |  |  |
Expected life (in years) |  | N/A |  | N/A |  | 0.5 |  |  | 0.5 |
Volatility |  | N/A |  | N/A |  | 53 | % |  | 45 | %
Interest rate |  | N/A |  | N/A |  | 0.5 | % |  | 0.1 | %
Dividend yield |  | N/A |  | N/A |  | N/A |  |  | N/A |
Compensation Costs Total stock-based compensation recognized in the condensed consolidated statements of operations and comprehensive loss is as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2016 |  | 2015 |  | 2016 |  | 2015
|  | (In thousands)
Statement of Operations Classifications |  |  |  |  |  |  |  |
Sales and marketing |  | $ | 332 |  |  | $ | 288 |  |  | $ | 560 |  |  | $ | 552 |
Research and development |  | 258 |  |  | 264 |  |  | 784 |  |  | 760 |
General and administrative |  | 665 |  |  | 677 |  |  | 2,245 |  |  | 1,657 |
Total |  | $ | 1,255 |  |  | $ | 1,229 |  |  | $ | 3,589 |  |  | $ | 2,969 |
As of June 30, 2016, there was $8.3 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options, restricted stock awards and RSUs granted to the Company’s employees and directors. This cost will be recognized over an estimated weighted-average period of approximately 2.62 years for standard options, 2.76 years for market condition based options, 2.11 years for RSUs, and 0.93 years for restricted stock awards. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.

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- 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=65895303&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=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: 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 5: 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 6: 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 + Details
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