Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.20.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2020
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 March 31, 2020, 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 March 31, 2020, options to purchase 138,736 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 March 31, 2020, awards with respect to 1,217,373 shares of the Company’s common stock were outstanding, and 1,643,970 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 2020, 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 for the three months ended March 31, 2020 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, 2019

 

 

980,884

 

 

$0.75-$83.30

 

 

$

35.24

 

 

 

2.84

 

 

$

34.07

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(6,334

)

 

1.17-24.52

 

 

 

9.42

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(1,876

)

 

44.19-56.72

 

 

 

52.54

 

 

 

 

 

 

 

 

 

Expired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of March 31, 2020

 

 

972,674

 

 

0.75-83.30

 

 

 

35.38

 

 

 

2.59

 

 

 

18.39

 

Vested and exercisable as of March 31, 2020

 

 

953,431

 

 

0.75-83.30

 

 

 

35.20

 

 

 

2.58

 

 

 

18.61

 

Vested and expected to vest as of March 31, 2020

 

 

971,431

 

 

$0.75-$83.30

 

 

$

35.37

 

 

 

2.59

 

 

$

18.40

 

 

The total intrinsic value of options exercised during the three months ended March 31, 2020 and March 31, 2019 was $239 and $6,733, respectively. The unrecognized compensation expense related to non-vested stock-based compensation granted under the Plans as of March 31, 2020 was $163. This amount is expected to be recognized over a weighted-average period of 0.1 years.

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 three months ended March 31, 2020 is summarized below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

grant

 

 

 

 

 

 

 

Performance

 

 

 

 

 

 

date fair

 

 

 

 

 

 

 

and

 

 

 

 

 

 

value

 

Restricted stock units

 

Time-based

 

 

time-based

 

 

Total

 

 

per share

 

Unvested restricted stock units as of December 31, 2019

 

 

108,976

 

 

 

3,134

 

 

 

112,110

 

 

$

83.48

 

Granted

 

 

145,413

 

 

 

58,972

 

 

 

204,385

 

 

 

45.78

 

Vested

 

 

(10,309

)

 

 

 

 

 

(10,309

)

 

 

107.85

 

Forfeited/canceled

 

 

(4,293

)

 

 

(3,134

)

 

 

(7,427

)

 

 

100.06

 

Unvested restricted stock units as of March 31, 2020 (1)

 

 

239,787

 

 

 

58,972

 

 

 

298,759

 

 

$

56.44

 

Unvested and expected to vest restricted stock units outstanding as

   of March 31, 2020

 

 

 

 

 

 

 

 

 

 

263,337

 

 

$

57.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2019

 

 

71,070

 

 

 

62,628

 

 

 

133,698

 

 

$

95.74

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Vested

 

 

(8,301

)

 

 

 

 

 

(8,301

)

 

 

108.51

 

Forfeited/canceled

 

 

 

 

 

(29,273

)

 

 

(29,273

)

 

 

110.27

 

Unvested restricted stock awards outstanding as of March 31, 2020 (1)

 

 

62,769

 

 

 

33,355

 

 

 

96,124

 

 

$

90.97

 

Unvested and expected to vest restricted stock awards outstanding as

   of March 31, 2020

 

 

 

 

 

 

 

 

 

 

76,815

 

 

$

90.08

 

 

(1)

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

 

As of March 31, 2020, the unrecognized compensation cost related to unvested employee restricted stock units and restricted stock awards was $18,992, excluding estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 2.9 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 March 31, 2020, a total of 670,678 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 2020, 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 months ended March 31, 2020 and March 31, 2019, was as follows:

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Stock-based compensation expense by type of award:

 

 

 

 

 

 

 

 

Stock option plan awards

 

$

525

 

 

$

1,147

 

Restricted stock units and restricted stock awards

 

 

2,083

 

 

 

2,257

 

Employee stock purchase plan

 

 

176

 

 

 

182

 

Total stock-based compensation expense

 

$

2,784

 

 

$

3,586

 

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 three months ended March 31, 2020 and March 31, 2019 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 months ended March 31, 2020 and March 31, 2019, 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

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Cost of revenue

 

$

229

 

 

$

285

 

Research and development

 

 

320

 

 

 

377

 

Sales and marketing

 

 

612

 

 

 

690

 

General and administrative

 

 

1,623

 

 

 

2,234

 

Total stock-based compensation expense

 

$

2,784

 

 

$

3,586

 

 

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 $252 and $318, net of forfeitures, to the 401(k) plan for the three months ended March 31, 2020 and March 31, 2019, respectively.