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Stock incentive plans | 6 Months Ended
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Jun. 30, 2015
Stock incentive plans |
Stock incentive plans | 10. Stock incentive plans In March 2011, our board of directors approved the 2011 Equity Incentive Plan (“2011 Plan”). The 2011 Plan provides for the grant of incentive and nonstatutory stock options, stock appreciation rights, restricted shares of our common stock, stock units, and performance cash awards. As of January 1 st of each year, the number of shares of common stock reserved for issuance under the 2011 Plan shall automatically be increased by a number equal to the lesser of (a) 4.5% of the total number of shares of common stock then outstanding, (b) 3,000,000 shares of common stock and (c) as determined by our board of directors. As of June 30, 2015, 10,324,899 shares of common stock are reserved for issuance. At the 2015 Annual Meeting of Stockholders held on June 12, 2015, our stockholders approved the following amendments to our 2011 Equity Incentive Plan: (a) termination of the automatic “evergreen” share reserve increase feature after January 2018, so that no additional automatic annual share increases will occur thereafter; (b) remove the discretion to re-price any stock award; and (c) implement more conservative “share counting” provisions, so that the following shares will no longer be available for subsequent issuance: (i) shares applied to pay the exercise price of an option, (ii) shares not otherwise issued in connection with the stock settlement of stock appreciation rights, (iii) shares used to satisfy tax withholding obligations relating to any stock award, and (iv) shares reacquired by us using cash proceeds from the exercise of options. No further awards will be made under our Amended and Restated 2001 Stock Incentive Plan (“2001 Plan”), and it will be terminated. Options outstanding under the 2001 Plan will continue to be governed by their existing terms. Stock-based compensation expense is allocated as follows on the accompanying condensed consolidated statements of operations:
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |
Network operations |  | $ | 412 |  | $ | 351 |  | $ | 759 |  | $ | 639 |
Development and technology |  | 129 |  | 119 |  | 227 |  | 260 |
Selling and marketing |  | 642 |  | 402 |  | 1,169 |  | 736 |
General and administrative |  | 916 |  | 979 |  | 1,779 |  | 1,733 |
Total stock-based compensation |  | $ | 2,099 |  | $ | 1,851 |  | $ | 3,934 |  | $ | 3,368 |
During the three and six months ended June 30, 2015, we capitalized $209 and $425, respectively, of stock-based compensation expense. During the three and six months ended June 30, 2014, we capitalized $126 and $161, respectively, of stock-based compensation expense. Stock option awards We grant stock option awards to both employees and non-employee directors. The grant date for these awards is the same as the measurement date. The stock option awards generally vest over a four year service period with 25% vesting when the individual completes 12 months of continuous service and the balance vesting monthly thereafter subject to continuous service on each vesting date. These awards are valued as of the measurement date and the stock-based compensation expense, net of estimated and actual forfeitures, is recognized on a straight-line basis over the requisite service period. A summary of the stock option activity is as follows:
|  | Number of Options (000’s) |  | Weighted Average Exercise Price |  | Weighted- Average Remaining Contract Life (years) |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2014 |  | 4,341 |  | $ | 6.60 |  | 5.8 |  | $ | 11,017 |
Exercised |  | (322 | ) | $ | 3.19 |  |  |  |  |
Canceled/forfeited |  | (69 | ) | $ | 10.49 |  |  |  |  |
Outstanding at June 30, 2015 |  | 3,950 |  | $ | 6.81 |  | 5.4 |  | $ | 11,173 |
Vested, exercisable and expected to vest at June 30, 2015 |  | 3,906 |  | $ | 6.80 |  | 5.4 |  | $ | 11,104 |
Exercisable at June 30, 2015 |  | 3,024 |  | $ | 6.38 |  | 4.8 |  | $ | 10,000 |
Restricted stock unit awards We grant time-based restricted stock units (“RSU”) to executive and non-executive personnel and non-employee directors. The time-based RSUs granted to executive and non-executive personnel generally vest over a two to three year period subject to continuous service on each vesting date. The time-based RSUs for our non-employee directors generally vest over a one year period for existing members and 25% per year over a four-year period for new members subject to continuous service on each vesting date. We grant performance-based RSUs to executive personnel. These awards vest subject to certain performance objectives based on the Company’s annual revenue growth achieved during the specified performance period and certain long-term service conditions. The maximum number of RSUs that may vest is determined based on actual Company achievement with one-third of the performance-based RSUs vesting when the individual completes 12 months of continuous service and the balance vesting over a series of eight successive equal quarterly installments thereafter subject to continuous service on each vesting date. We recognize stock-based compensation expense for performance-based RSUs when we believe that it is probable that the performance objectives will be met. A summary of the nonvested RSU activity under the 2011 Plan is as follows:
|  | Number of Shares (000’s) |  | Weighted Average Grant-Date Fair Value |
Nonvested at December 31, 2014 |  | 1,385 |  | $ | 6.09 |
Granted |  | 1,267 |  | $ | 7.40 |
Vested |  | (531 | ) | $ | 8.18 |
Canceled/forfeited |  | (34 | ) | $ | 7.14 |
Nonvested at June 30, 2015 |  | 2,087 |  | $ | 6.34 |
During the six months ended June 30, 2015, 531,488 shares of RSUs vested. The Company issued 360,465 shares and the remaining shares were withheld to pay minimum statutory federal, state, and local employment payroll taxes on those vested awards.

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