Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.19.3
Stockholders' Equity
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Stockholders' Equity

9. Stockholders’ equity

The Company has a 2002 Stock Incentive Plan (2002 Plan) as amended, under which the Company granted options to purchase shares of its common stock. As of September 30, 2019, options to purchase 333 shares of common stock remained outstanding under the 2002 Plan. The 2002 Plan was terminated in March 2012 in connection with the adoption of the 2012 Plan, and, accordingly, no new options are available for issuance under this plan. The 2002 Plan continues to govern outstanding awards granted thereunder.

The Company has a 2012 Equity Incentive Plan (2012 Plan) under which the Company granted options to purchase shares of its common stock. As of September 30, 2019, options to purchase 142,786 shares of common stock remained outstanding under the 2012 Plan. The 2012 Plan was terminated in connection with the Company’s initial public offering in February 2014, and accordingly, no new options are available for issuance under this plan. The 2012 Plan continues to govern outstanding awards granted thereunder.

The Company has a 2014 Equity Incentive Plan (2014 Plan) that provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any parent and subsidiary corporation’s employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, restricted stock awards, stock appreciation rights, performance units and performance shares to its employees, directors and consultants and its parent and subsidiary corporations’ employees and consultants.

As of September 30, 2019, awards with respect to 1,087,876 shares of the Company’s common stock were outstanding, and 1,815,499 shares of common stock remained available for issuance under the 2014 Plan. The shares available for issuance under the 2014 Plan will be increased by any shares returned to the 2002 Plan, 2012 Plan and the 2014 Plan as a result of expiration or termination of awards (provided that the maximum number of shares that may be added to the 2014 Plan pursuant to such previously granted awards under the 2002 Plan and 2012 Plan is 2,328,569 shares). The number of shares available for issuance under the 2014 Plan also is increased annually on the first day of each fiscal year by an amount equal to the least of:

895,346 shares;

4% of the outstanding shares of common stock as of the last day of the Company’s immediately preceding fiscal year; or

such other amount as the Company’s board of directors may determine.

For 2019, no additional shares were added to the 2014 Plan share reserve pursuant to the provision described above.

Stock options

Options typically expire between seven and ten years from the date of grant and vest over one to four year terms. Options have been granted to employees, directors and consultants of the Company, as determined by the board of directors, at the deemed fair market value of the shares underlying the options at the date of grant.

The activity for stock options under the Company’s stock plans is as follows:  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

weighted-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

average

 

 

Per share

 

 

 

 

 

 

 

 

 

 

 

average

 

 

contractual

 

 

average

 

 

 

 

 

 

 

Price per

 

 

exercise

 

 

terms

 

 

intrinsic

 

 

 

Options

 

 

share

 

 

price

 

 

(in years)

 

 

value

 

Outstanding as of December 31, 2018

 

 

1,127,336

 

 

$0.75-$83.30

 

 

$

34.89

 

 

 

3.84

 

 

$

89.28

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(82,053

)

 

0.75-58.95

 

 

 

24.80

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(37,161

)

 

38.54-58.95

 

 

 

44.58

 

 

 

 

 

 

 

 

 

Expired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of September 30, 2019

 

 

1,008,122

 

 

0.75-83.30

 

 

 

35.36

 

 

 

3.09

 

 

 

14.85

 

Vested and exercisable as of September 30, 2019

 

 

926,026

 

 

0.75-83.30

 

 

 

34.54

 

 

 

3.05

 

 

 

15.85

 

Vested and expected to vest as of September 30, 2019

 

 

1,002,824

 

 

$0.75-$83.30

 

 

$

35.31

 

 

 

3.09

 

 

$

14.91

 

 

The total intrinsic value of options exercised during the nine months ended September 30, 2019 and September 30, 2018 was $7,017 and $65,660, respectively. The unrecognized compensation expense related to non-vested stock-based compensation granted under the Plans as of September 30, 2019 was $1,118.

Stock incentive awards

 

The Company grants restricted stock units (RSUs) and restricted stock awards (RSAs) under the 2014 Plan (Stock Awards). The Stock Awards vest either based solely on the satisfaction of time-based service conditions or on the satisfaction of time-based service conditions combined with performance criteria. Stock Awards are subject to forfeiture if the holder’s services to the Company terminate before vesting.

 

Stock Awards granted with only time-based service vesting conditions generally vest over a four-year service period, as defined in the terms of each award. Stock Awards that vest based on the satisfaction of time-based service conditions combined with performance criteria generally vest over a three-year service and performance period, based on performance criteria established at the time of the award. The portion of the Stock Award that is earned may equal or be less than the targeted number of shares subject to the Stock Award depending on whether the performance criteria are met.  

Stock Awards activity for the nine months ended September 30, 2019 are summarized below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

grant

 

 

 

 

 

 

 

Performance

 

 

 

 

 

 

date fair

 

 

 

 

 

 

 

and

 

 

 

 

 

 

value

 

Restricted stock units

 

Time-based

 

 

time-based

 

 

Total

 

 

per share

 

Unvested restricted stock units outstanding as of December 31, 2018

 

 

58,589

 

 

 

8,739

 

 

 

67,328

 

 

$

115.16

 

Granted

 

 

80,450

 

 

 

 

 

 

80,450

 

 

 

76.16

 

Vested

 

 

(21,257

)

 

 

(4,366

)

 

 

(25,623

)

 

 

125.04

 

Forfeited/canceled

 

 

(10,935

)

 

 

(1,239

)

 

 

(12,174

)

 

 

100.36

 

Unvested restricted stock units outstanding as of September 30, 2019 (1)

 

 

106,847

 

 

 

3,134

 

 

 

109,981

 

 

$

85.97

 

Unvested and expected to vest restricted stock units outstanding as

   of September 30, 2019

 

 

 

 

 

 

 

 

 

 

101,117

 

 

$

85.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

grant

 

 

 

 

 

 

 

Performance

 

 

 

 

 

 

date fair

 

 

 

 

 

 

 

and

 

 

 

 

 

 

value

 

Restricted stock awards

 

Time-based

 

 

time-based

 

 

Total

 

 

per share

 

Unvested restricted stock awards outstanding as of December 31, 2018

 

 

36,937

 

 

 

47,821

 

 

 

84,758

 

 

$

115.80

 

Granted

 

 

51,234

 

 

 

40,166

 

 

 

91,400

 

 

 

86.89

 

Vested

 

 

(10,986

)

 

 

(15,732

)

 

 

(26,718

)

 

 

114.17

 

Forfeited/canceled

 

 

(7,093

)

 

 

(9,627

)

 

 

(16,720

)

 

 

109.11

 

Unvested restricted stock awards outstanding as of September 30, 2019 (1)

 

 

70,092

 

 

 

62,628

 

 

 

132,720

 

 

$

97.34

 

Unvested and expected to vest restricted stock awards outstanding as

   of September 30, 2019

 

 

 

 

 

 

 

 

 

 

78,627

 

 

$

92.43

 

 

(1)

Outstanding restricted stock units and restricted stock awards are based on the maximum payout of the targeted number of shares.  

 

As of September 30, 2019, the unrecognized compensation cost related to unvested employee restricted stock units and restricted stock awards was $13,821, excluding estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 2.8 years.

Employee stock purchase plan

 

The Company’s 2014 Employee Stock Purchase Plan (ESPP) provides for the grant to all eligible employees an option to purchase stock under the ESPP, within the meaning Section 423 of the Internal Revenue Code. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation, which includes a participant’s base straight time gross earnings, incentive compensation, bonuses, overtime and shift premium, but exclusive of payments for equity compensation and other similar compensation. A participant may purchase a maximum of 1,500 shares during a purchase period. Amounts deducted and accumulated by the participant are used to purchase shares of the Company’s common stock at the end of each six-month period. The purchase price of the shares will be 85% of the lower of the fair market value of the Company’s common stock on the first trading day of each offering period or on the exercise date. The offering periods are currently approximately six months in length beginning on the first business day on or after March 1 and September 1 of each year and ending on the first business day on or after September 1 and March 1 approximately six months later.

As of September 30, 2019, a total of 698,632 shares of common stock were available for sale pursuant to the ESPP.

The number of shares available for sale under the ESPP is increased annually on the first day of each fiscal year by an amount equal to the least of:

179,069 shares;

1.5% of the outstanding shares of the Company’s common stock on the last day of the Company’s immediately preceding fiscal year; or

such other amount as may be determined by the administrator.

For 2019, no additional shares were added to the ESPP share reserve pursuant to the provision described above.

Stock-based compensation

Stock-based compensation expense recognized for the three and nine months ended September 30, 2019 and September 30, 2018, respectively, was as follows:

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Stock-based compensation expense by type of award:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock option plan awards

 

$

590

 

 

$

1,348

 

 

$

2,513

 

 

$

4,847

 

Restricted stock units and restricted stock awards

 

 

834

 

 

 

1,679

 

 

 

3,882

 

 

 

4,334

 

Employee stock purchase plan

 

 

141

 

 

 

189

 

 

 

535

 

 

 

602

 

Total stock-based compensation expense

 

$

1,565

 

 

$

3,216

 

 

$

6,930

 

 

$

9,783

 

Employee stock-based compensation expense was calculated based on awards of stock options, restricted stock units and restricted stock awards ultimately expected to vest based on the Company’s historical award cancellations. The employee stock-based compensation expense recognized for the nine months ended September 30, 2019 and September 30, 2018 has been reduced for estimated forfeitures of stock option plan awards at a rate of 7.3% and 7.3%, respectively. ASC 718 – Compensation-Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

For the three and nine months ended September 30, 2019 and September 30, 2018, respectively, stock-based compensation expense recognized under ASC 718, included in cost of revenue, research and development expense, sales and marketing expense, and general and administrative expense was as follows:

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Cost of revenue

 

$

172

 

 

$

187

 

 

$

656

 

 

$

719

 

Research and development

 

 

221

 

 

 

348

 

 

 

825

 

 

 

1,010

 

Sales and marketing

 

 

263

 

 

 

630

 

 

 

1,289

 

 

 

1,761

 

General and administrative

 

 

909

 

 

 

2,051

 

 

 

4,160

 

 

 

6,293

 

Total stock-based compensation expense

 

$

1,565

 

 

$

3,216

 

 

$

6,930

 

 

$

9,783

 

 

401(k) retirement savings plan

The Company maintains a 401(k) retirement savings plan for the benefit of eligible employees. Under the terms of this plan, eligible employees are able to make contributions to the plan on a tax-deferred basis. The Company began matching employees’ contributions, effective January 1, 2017. The Company contributed $695, net of forfeitures, to the 401(k) plan for the nine months ended September 30, 2019 and $650, net of forfeitures, for the nine months ended September 30, 2018.