Share-based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

During the year ended December 31, 2021, the Company granted awards under the 2018 Omnibus Incentive Compensation Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”), and the 2015 Incentive Compensation Plan (the “2015 Plan”). The Compensation Committee of the Board of Directors administers the plans. Under the 2018 Plan, a maximum of 8,897,084 shares of common stock may be issued upon the exercise of stock options, in the form of restricted stock, or in settlement of RSUs or other awards, including awards with alternative vesting schedules such as performance-based criteria.

For the years ended December 31, 2021, 2020 and 2019 the following table presents total share-based compensation expense in each functional line item on the consolidated statements of operations (in thousands):


	Year Ended December 31,
	2021		2020		2019
Cost of revenues	$	2,469	$	1,583	$	1,133
Research and development	4,813		2,823		1,548
Sales and marketing	3,704		2,346		1,669
General and administrative	5,663		3,667		2,952

Total	$	16,649	$	10,419	$	7,302

During the quarter ended March 31, 2021, the Board of Directors of the Company approved and the Company granted restricted stock units to eligible employees under the 2018 Omnibus Incentive Compensation Plan, previously named the Amended and Restated 2009 Omnibus Incentive Compensation Plan (the “2018 Plan”) that were immediately vested, as fiscal 2020 annual bonus payments. The total charges recorded during the quarter ended March 31, 2021 were $7.0 million. Such bonus payments in fiscal 2020 were paid in the quarter ended June 30, 2020, and total charges related to such bonus payments recorded during the quarter ended June 30, 2020 were $2.7 million. Such bonus payments in fiscal 2019 were paid in the quarter ended September 30, 2019, and total charges related to such bonus payments recorded during the quarter ended September 30, 2019 were $2.4 million. During the year ended December 31, 2021, the Board of Directors of the Company approved, and the Company granted restricted stock units under the 2018 Plan to certain employees that contributed to the completion of the divestiture of Ctrack South Africa. Such grants were immediately vested, and the total charges were $0.6 million.

Stock Options

The Compensation Committee of the Board of Directors determines eligibility, vesting schedules and exercise prices for stock options granted. Stock options generally have a term of ten years and vest over a three- to four-year period.

The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of each stock option granted:


	Year Ended December 31,
	2021		2020
Expected dividend yield	—	%	—	%
Risk-free interest rate	0.9	%	0.9	%
Volatility	73	%	95	%
Expected term (in years)	5.4		5.8

The weighted-average fair value of stock option awards granted during the years ended December 31, 2021 and 2020 was $5.41 and $7.11, respectively.

The following table summarizes the Company’s stock option activity for the years ended December 31, 2021 and 2020 (dollars in thousands, except per share data):


	Stock Options Outstanding	Weighted-Average Exercise Price Per Option		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding — December 31, 2018	8,796,212	$	2.10
Granted	2,660,936	5.17
Exercised	(1,489,067)	1.69
Canceled	(923,777)	3.64
Outstanding — December 31, 2019	9,044,304	$	2.91
Granted	1,526,000	9.41
Exercised	(1,357,620)	3.06
Canceled	(732,705)	3.60
Outstanding — December 31, 2020	8,479,979	$	3.99
Granted	1,929,500	8.86
Exercised	(1,315,552)	2.62
Canceled	(1,008,134)	8.60
Outstanding — December 31, 2021	8,085,793	$	4.81	7.16	$	16,603
Vested and Expected to Vest — December 31, 2021	7,398,958	$	4.51	6.99	$	16,464
Exercisable — December 31, 2021	4,816,773	$	3.00	6.17	$	15,081

The total intrinsic value of stock options exercised to purchase common stock during the years ended December 31, 2021, 2020 and 2019 was approximately $4.3 million, $11.7 million and $5.6 million, respectively.

As of December 31, 2021, total unrecognized share-based compensation expense related to non-vested stock options was $11.3 million, which is expected to be recognized over a weighted-average period of approximately 2.68 years. The Company recognized approximately $6.3 million, $5.8 million and $3.5 million of share-based compensation expense related to the vesting of stock option awards during the years ended December 31, 2021, 2020 and 2019, respectively.

Restricted Stock Units

Pursuant to the 2018 Plan and the 2015 Plan, the Company may issue RSUs that, upon satisfaction of vesting conditions, allow recipients to receive common stock. Issuances of such awards reduce common stock available under the 2018 Plan and 2015 Plan for stock incentive awards. The Company measures compensation cost associated with grants of RSUs at fair value, which is generally the closing price of the Company’s stock on the date of grant. RSUs generally vest over a three- to four-year period.

A summary of restricted stock unit activity under all plans for the year ended December 31, 2021 is presented below:


	Number of Shares	Weighted-Average Grant-Date Fair Value
Non-vested — December 31, 2018	454,382	$	2.17
Granted	870,150	$	5.07
Vested	(809,482)	$	4.20
Forfeited	(114,735)	$	3.66
Non-vested — December 31, 2019	400,315	$	3.95
Granted	570,368	$	10.52
Vested	(548,160)	$	7.28
Forfeited	(5,418)	$	4.06
Non-vested — December 31, 2020	417,105	$	8.68
Granted	1,931,263	$	8.53
Vested	(1,019,686)	$	10.20
Forfeited	(80,959)	$	10.75
Non-vested — December 31, 2021	1,247,723	$	7.65

During the years ended December 31, 2021, 2020 and 2019, the total fair value of shares vested was $10.4 million, $5.1 million and $4.0 million, respectively.

As of December 31, 2021, there was $5.8 million of unrecognized share-based compensation expense related to non-vested RSUs, which is expected to be recognized over a weighted-average period of 3.45 years. The Company recognized approximately $9.6 million and $4.1 million and $3.5 million of share-based compensation expense related to the vesting of RSUs during the years ended December 31, 2021, 2020 and 2019 respectively.

2000 Employee Stock Purchase Plan

The ESPP permits eligible employees of the Company to purchase newly issued shares of common stock, at a price equal to 85% of the lower of the fair market value on (i) the first day of the offering period or (ii) the last day of each six-month purchase period, through payroll deductions of up to 10% of their annual cash compensation. Under the ESPP, a maximum of 5,324,000 shares of common stock may be purchased by eligible employees.

During the years ended December 31, 2021 and 2020, the Company issued 220,390 shares and 231,275 shares, respectively, under the ESPP. The Company recognized approximately $0.7 million, $0.6 million and $0.3 million of share-based compensation expense related to the ESPP during the years ended December 31, 2021, 2020 and 2019, respectively.