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Stock incentive plans | 9 Months Ended
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Sep. 30, 2018
Stock incentive plans |
Stock incentive plans | 11. 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 non-statutory stock options, stock appreciation rights, restricted shares of our common stock, stock units, and performance cash awards. As of January 1st 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 or (c) as determined by our board of directors. The automatic “evergreen” share reserve increase feature terminated after January 2018, so no additional automatic annual share increases will occur. As of September 30, 2018, options to purchase approximately 302,000 shares of common stock and RSUs covering approximately 3,265,000 shares of common stock were outstanding under the 2011 Plan. 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 September 30, |  | Nine Months Ended September 30, |
|  | 2018 |  | 2017 |  | 2018 |  | 2017 |
Network operations |  | $ | 549 |  | $ | 552 |  | $ | 1,602 |  | $ | 1,660 |
Development and technology |  | 323 |  | 275 |  | 915 |  | 825 |
Selling and marketing |  | 511 |  | 524 |  | 1,377 |  | 1,589 |
General and administrative |  | 1,772 |  | 2,333 |  | 5,333 |  | 6,942 |
Total stock-based compensation |  | $ | 3,155 |  | $ | 3,684 |  | $ | 9,227 |  | $ | 11,016 |
During the three and nine months ended September 30, 2018, we capitalized $208 and $600, respectively, of stock-based compensation expense. During the three and nine months ended September 30, 2017, we capitalized $163 and $530, 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 remaining 75% vesting monthly thereafter. These awards are valued as of the measurement date and the stock-based compensation expense, net of 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, 2017 |  | 1,283 |  | $ | 9.58 |  | 3.8 |  | $ | 16,573 |
Exercised |  | (871 | ) | $ | 11.21 |  |  |  |  |
Canceled/forfeited |  | (7 | ) | $ | 5.99 |  |  |  |  |
Outstanding and exercisable at September 30, 2018 |  | 405 |  | $ | 6.14 |  | 3.4 |  | $ | 11,660 |
Restricted stock unit awards We grant time-based RSUs 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 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 revenue growth and/or Adjusted EBITDA 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 and performance-based RSUs generally vest over a three-year period 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 RSU activity is as follows:
|  | Number of Shares (000’s) |  | Weighted Average Grant-Date Fair Value |
Non-vested at December 31, 2017 |  | 3,324 |  | $ | 7.35 |
Granted(2) |  | 968 |  | $ | 13.56 |
Vested |  | (969 | ) | $ | 8.67 |
Canceled/forfeited |  | (58 | ) | $ | 14.32 |
Non-vested at September 30, 2018 |  | 3,265 |  | $ | 8.68 |
| (2) |  | The RSUs granted to all of our named executive officers in 2016 were subject to satisfaction of specified service-based and performance-based conditions. The performance objectives were subject to under- or over- achievement on a sliding scale, with a threshold of 50% of the target number of RSUs and a maximum of 150% of the target RSUs. In February 2018, our Compensation Committee determined actual achievement of the 2016 performance-based RSUs resulting in additional RSUs granted of approximately 520,000 at a grant-date fair value of $6.13 per share during the nine months ended September 30, 2018.
During the nine months ended September 30, 2018, approximately 969,000 shares of RSUs vested. The Company issued approximately 612,000 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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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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