Stock incentive plans

6 Months Ended

Jun. 30, 2019

15. 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 June 30, 2019, options to purchase approximately 279,000 shares of common stock and RSUs covering approximately 855,000 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				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Network operations	$	348	$	516	$	854	$	1,053
Development and technology		334		314		637		592
Selling and marketing		548		393		1,077		866
General and administrative		806		1,723		1,812		3,561
Total stock-based compensation	$	2,036	$	2,946	$	4,380	$	6,072

During the three and six months ended June 30, 2019, we capitalized $235 and $465, respectively, of stock-based compensation expense. During the three and six months ended June 30, 2018, we capitalized $206 and $392, 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:


				Weighted-
				Average
		Weighted		Remaining
	Number of	Average		Contract	Aggregate
	Options	Exercise		Life	Intrinsic
	(000’s)	Price		(years)	Value
Outstanding at December 31, 2018	304	$	7.49	3.8	$	3,970
Exercised	(15)	$	5.47
Canceled/forfeited	—	$	—
Outstanding and exercisable at June 30, 2019	289	$	7.59	3.3	$	2,999

Restricted stock unit awards

We grant service-based RSUs to executive and non-executive personnel and non-employee directors. The service-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 service-based RSUs for our non-employee directors generally vest over a one-year period for existing members and 33.3% per year over a three-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, Adjusted EBITDA growth, and/or relative total stockholder return 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 and achievement of the performance conditions. 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:


		Weighted Average
	Number of Shares	Grant-Date Fair
	(000’s)	Value
Non-vested at December 31, 2018	3,119	$	8.60
Granted(1)	593	$	22.76
Vested	(2,806)	$	7.21
Canceled/forfeited	(51)	$	23.31
Non-vested at June 30, 2019	855	$	22.08

(1)

The RSUs granted to all of our named executive officers in 2017 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 2019, our Compensation Committee determined actual achievement of the 2017 performance-based RSUs resulting in additional RSUs granted of approximately 29,000 at a grant-date fair value of $11.94 per share during the six months ended June 30, 2019.

During the six months ended June 30, 2019, approximately 2,806,000 shares of RSUs vested. The Company issued approximately 1,423,000 shares and the remaining shares were withheld to pay minimum statutory federal, state, and local employment payroll taxes on those vested awards.