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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2014 Equity Incentive Plan On March 26, 2014, the Company's 2014 Equity Incentive Plan ("2014 Plan") became effective. On March 27, 2014, the Company terminated its earlier 2006 Global Share Plan ("2006 Plan"), added all reserved-but-unissued shares under the 2006 Plan to the 2014 Plan and rolled into the 2014 Plan all shares underlying stock awards granted under the 2006 Plan that otherwise would return to the 2006 Plan. The Company may not grant additional awards under the 2006 Plan, but the 2006 Plan will continue to govern outstanding awards previously granted under the 2006 Plan. The 2014 Plan provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code, only to employees of the Company or any parent or subsidiary of the Company, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to employees, directors and consultants of the Company, and the employees and consultants of any parent or subsidiary of the Company. In January 2017, the Company effected an increase of 2,612,263 shares reserved under the 2014 Plan. As of September 30, 2017, the Company had 7,473,429 total shares of common stock reserved and available for grant under the 2014 Plan. The following table summarizes the total number of shares available for grant under the 2014 Plan as of September 30, 2017:
| Shares Available for Grant
Balance, December 31, 2016 | 5,116,753 |
Authorized | 2,612,263 |
Options granted | — |
Options canceled | 1,436,112 |
Awards granted | (3,287,665 | )
Awards canceled | 1,595,966 |
Balance, September 30, 2017 | 7,473,429 |
Stock Options The following table summarizes the information about outstanding stock option activity:
| Options Outstanding
| Number of Shares Underlying Outstanding Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
|  |  |  |  |  |  | (in thousands)
Balance, December 31, 2016 | 6,219,774 |  |  | $ | 6.15 |  |  | 6.42 |  | $ | 6,056 |
Options granted | — |  |  | — |  |  |  |  |
Options exercised | (409,065 | ) |  | 1.73 |  |  |  |  |
Options canceled | (1,436,112 | ) |  | 7.74 |  |  |  |  |
Balance, September 30, 2017 | 4,374,597 |  |  | $ | 6.04 |  |  | 6.07 |  | $ | 2,732 |
Options exercisable, September 30, 2017 | 3,439,751 |  |  | $ | 5.81 |  |  | 5.57 |  | $ | 2,732 |
The weighted-average grant-date fair value of options granted during the three and nine months ended September 30, 2016 was $3.03 and $3.15 per share, respectively, and the aggregate grant-date fair value of the Company's stock options granted during the three and nine months ended September 30, 2016 was $0.1 million and $3.0 million, respectively. There were no options granted during the three and nine months ended September 30, 2017. The aggregate intrinsic value of stock options exercised during the three months ended September 30, 2017 and 2016, was $0.03 million and $0.9 million, respectively, and during the nine months ended September 30, 2017 and 2016 was $1.2 million and $1.6 million, respectively. The intrinsic value for each share underlying an option represents the difference between the option exercise price per share and the closing stock price of a share of the Company’s common stock. The total grant-date fair value of the options vested during the three months ended September 30, 2017 and 2016 was $0.7 million and $1.4 million, respectively, and during the nine months ended September 30, 2017 and 2016 was $2.6 million and $5.9 million, respectively. Restricted Stock Units The Company currently grants Restricted Stock Units ("RSUs") to certain employees and directors. The RSUs typically vest over a period of time, generally one to three years, and are subject to the participant’s continuing service to the Company over that period. Until vested, RSUs do not have the voting and dividend participation rights of common stock and the shares underlying the awards are not considered issued and outstanding. The following is a summary of the Company’s RSU activity and related information for the three months ended September 30, 2017:
| Restricted Stock Units Outstanding
| Shares |  | Weighted-Average Grant-Date Fair Value Per Share
Balance, December 31, 2016 | 4,365,670 |  |  | $ | 6.23 |
Awards granted | 3,287,665 |  |  | 4.96 |
Awards vested | (1,453,616 | ) |  | 5.92 |
Awards canceled | (1,320,044 | ) |  | 6.14 |
Balance, September 30, 2017 | 4,879,675 |  |  | $ | 5.49 |
The weighted-average grant-date fair value of RSUs granted during the three months ended September 30, 2017 and 2016 was $4.66 and $6.09 per share, respectively, and during the nine months ended September 30, 2017 and 2016 was $4.96 and $6.23, respectively. The aggregate grant-date fair value of RSUs granted during the three months ended September 30, 2017 and 2016 was $0.4 million and $1.0 million, respectively, and during the nine months ended September 30, 2017 and 2016 was $16.3 million and $19.9 million, respectively. The aggregate fair value of shares vested as of the respective vesting dates during the three months ended September 30, 2017 and 2016 was $1.7 million and $4.1 million, respectively, and during the nine months ended September 30, 2017 and 2016 was $6.3 million and $10.0 million, respectively. The number of RSUs vested during a particular period includes shares that the Company withheld during the period on behalf of certain employees to satisfy the minimum statutory tax withholding requirements, as determined by the Company. During the three months ended September 30, 2017 and 2016, the Company withheld 180,345 and 60,638 shares of stock, respectively, for an aggregate value of $0.6 million and $0.4 million, respectively. During the nine months ended September 30, 2017 and 2016, the Company withheld 275,922 and 156,186 shares of stock, respectively, for an aggregate value of $1.1 million and $0.9 million, respectively. The Company returned such withheld shares to the 2014 Plan, which were then available under the plan terms for future issuance. The number of RSUs granted includes 378,644 shares of performance-based restricted stock units ("PBRSUs") that the Company granted to certain executives in the first quarter of fiscal year 2017 pursuant to the 2014 Plan. Each PBRSU represents the right to receive one share of the Company's common stock upon vesting, subject to the Company's achievement of certain performance conditions. At each reporting period, the Company assesses the probability of the number of these PBRSUs expected to vest based on its achievement of the performance condition. The number of RSUs granted also includes 358,000 shares of market-based restricted stock units (MBRSUs) that the Company granted to certain executives in June 2017 pursuant to the 2014 Plan. Each MBRSU represents the right to receive one share of the Company's common stock upon vesting subject to the Company's achievement of certain stock price targets. The Company estimated the fair value of the MBRSUs using the Monte Carlo option-pricing model as of the date of grant as the MBRSUs contain both market and service conditions. The weighted-average grant-date fair value of these MBRSU's was $4.18 per share. The Company will record the total expense related to all of the MBRSUs on a graded-vesting method over the estimated term. 2014 Employee Stock Purchase Plan The 2014 Employee Stock Purchase Plan ("ESPP") is a ten-year plan, effective in March 2014. The ESPP authorizes the Company to issue shares of common stock pursuant to purchase rights it grants to its employees and those of its designated subsidiaries. In January 2017, the Company effected an increase of 1,000,000 shares reserved under the ESPP. As of September 30, 2017, the Company had 2,012,431 total shares of common stock reserved and available for issuance under the ESPP. Under the ESPP, the Company grants stock purchase rights to all eligible employees, currently covering a one-year offering period ending December 1, 2017, with purchase dates at the end of each interim six-month purchase period. Employees purchase shares using employee payroll deductions at purchase prices equal to 85% of the lesser of the fair market value of the Company’s common stock at either the first day of each offering period or the date of purchase. The ESPP currently has a reset provision: If the closing price of the Company’s common stock on the last day of any purchase period during an offering period is lower than the closing sales price on the first day of the related offering period, that offering period will terminate upon the purchase of shares for such purchase period and participants will be automatically re-enrolled in the immediately following offering period. As a result, the reference price for purposes of determining the purchase price of shares for subsequent purchase periods for all participants of the new offering period resets to such lower price. No participant may purchase more than $25,000 worth of common stock in any calendar year, or 5,000 shares of common stock in any six-month purchase period. For the nine months ended September 30, 2017 and 2016, the Company issued 563,174 and 646,278 shares under the ESPP plan, respectively. The Company did not issue any shares under the ESPP during the three months ended September 30, 2017 and 2016 respectively. Stock Repurchase Program In February 2016, the Company's board of directors authorized a stock repurchase program of up to $10.0 million, with stock purchases made from time to time in compliance with applicable securities laws in the open market or in privately negotiated transactions. The timing and amounts of any purchases will be based on market conditions and other factors including price, regulatory requirements and capital availability. The authorization does not require the purchase of any minimum number of shares, and the Company may suspend, modify or discontinue the program at any time without prior notice. In August 2017, our board of directors extended this program to June 30, 2018. During the nine months ended September 30, 2017, the Company repurchased a total of 796,616 shares of its common stock on the open market at a total cost of $3.0 million with an average price per share of $3.80. During the nine months ended September 30, 2016, the Company repurchased a total of 364,627 shares at a total cost of $2.1 million with an average price per share of $5.87. As of September 30, 2017, we had repurchased under this program 1,161,243 shares of our common stock at a total price $5.2 million with an average purchase price $4.45 per share of our common stock. Approximately $4.8 million remains available as of September 30, 2017 for repurchases under this program. Determination of Fair Values Weighted-average assumptions for the Company's stock options granted were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
Stock options: |  |  |  |  |  |  |
Expected term (in years) | N/A |  | 5.85 |  |  | N/A |  | 5.78 |
Expected volatility | N/A |  | 53.18 | % |  | N/A |  | 55.09 | %
Risk free interest rate | N/A |  | 1.15 | % |  | N/A |  | 1.49 | %
Weighted-average assumptions to value MBRSUs under the Monte Carlo model were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
MBRSUs: |  |  |  |  |  |  |
Expected volatility | N/A |  | N/A |  | 46 | % |  | 53 | %
Risk free interest rate | N/A |  | N/A |  | 1.45 | % |  | 1.07 | %
Weighted-average assumptions to value employee stock purchase rights under the Black-Scholes model were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
ESPP purchase rights: |  |  |  |  |  |  |
Expected term (in years) | 0.50 - 1.00 |  | 0.50 - 2.00 |  | 0.50 - 1.00 |  | 0.50 - 2.00
Expected volatility | 34% - 39% |  | 35% - 55% |  | 34% - 39% |  | 35% - 55%
Risk free interest rate | 0.60% - 1.07% |  | 0.07% - 0.51% |  | 0.60% - 1.07% |  | 0.07% - 0.51%
Stock-based Compensation Expense The total stock-based compensation the Company recognized for stock-based awards in the consolidated statements of operations is as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
| (in thousands)
Cost of revenue | $ | 313 |  |  | $ | 431 |  |  | $ | 860 |  |  | $ | 1,024 |
Research and development | 1,329 |  |  | 1,576 |  |  | 3,082 |  |  | 4,287 |
Sales and marketing | 1,566 |  |  | 2,505 |  |  | 4,361 |  |  | 6,336 |
General and administrative | 1,756 |  |  | 1,903 |  |  | 4,658 |  |  | 5,118 |
Total stock-based compensation | $ | 4,964 |  |  | $ | 6,415 |  |  | $ | 12,961 |  |  | $ | 16,765 |
The following table presents stock-based compensation expense by award-type:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
| (in thousands)
Stock Options | $ | 652 |  |  | $ | 1,336 |  |  | $ | 2,355 |  |  | $ | 3,667 |
Restricted Stock Units | 3,945 |  |  | 4,353 |  |  | 9,408 |  |  | 11,044 |
Employee Stock Purchase Plan | 367 |  |  | 726 |  |  | 1,198 |  |  | 2,054 |
Total stock-based compensation | $ | 4,964 |  |  | $ | 6,415 |  |  | $ | 12,961 |  |  | $ | 16,765 |
As of September 30, 2017, unrecognized stock-based compensation related to outstanding stock options, RSUs and ESPP purchase rights, was $3.1 million, $22.1 million and $0.3 million, respectively, which the Company expects to recognize over weighted-average periods of 1.61 years, 2.01 years and 0.17 years, respectively.

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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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