Stock-Based Compensation |
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plans Prior to the IPO, the Company had a stock-based compensation plan, the 2010 Equity Incentive Plan (the “2010 Plan”) under which the Company granted options to purchase shares of common stock to employees, directors and consultants. In January 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”), which was subsequently ratified by its stockholders in February 2015. The 2015 Plan became effective immediately on adoption although no awards were to be made under it until the Effective Date. The 2015 Plan is the successor to and continuation of the 2010 Plan. As of the Effective Date, no additional awards were to be granted under the 2010 Plan, but all stock awards granted under the 2010 Plan remain subject to their existing terms. The number of shares of the Company’s common stock reserved for issuance under the 2015 Plan equaled the sum of 2,500,000 shares plus up to 4,537,868 shares reserved for issuance under the 2010 Plan. Of this amount, 2,610,701 shares are available for future grants to employees, non-employee directors, consultants and advisors as of June 30, 2015. The 2015 Plan provides for the grant of the following awards: (i) incentive and nonstatutory stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) stock units, and (v) performance cash awards. The number of shares reserved for issuance under the 2015 Plan will be increased automatically on the first business day of each of the Company’s fiscal years, commencing in 2016, by a number equal to the least of: (1) 1,750,000 shares, (2) 5% of the shares of common stock outstanding on the last business day of the prior fiscal year, or (3) the number of shares determined by the Company’s board of directors. The compensation committee of the Company’s board of directors administers the 2015 Plan. The compensation committee has complete discretion to make all decisions relating to the 2015 Plan and outstanding awards. The Company’s board of directors may amend or terminate the 2015 Plan at any time. If the Company’s board of directors amends the 2015 Plan, it does not need stockholder approval of the amendment unless required by applicable law, regulation or rules. The 2015 Plan will terminate automatically 10 years after the later of the date when the Company’s board of directors adopted the 2015 Plan or approved the latest share increase that was also approved by the Company’s stockholders. The terms of the stock options, including the exercise price per share and vesting provisions, are determined by the board of directors. Historically, stock options were granted at exercise prices not less than the estimated fair market value of the Company’s common stock at the date of grant based upon numerous objective and subjective factors including: third-party valuations, preferred stock transactions with third-parties, current operating and financial performance, management estimates and future expectations. Subsequent to the completion of the IPO, the fair value of the Company's common stock on the grant date is equal to the most recent New York Stock Exchange closing price of the Company's stock. Stock option grants typically vest upon the expiration of an initial one year cliff and vest monthly thereafter over the remaining thirty-six months assuming continuing service, and expire ten years from the grant date. The Plan allows for grants of stock options that may be exercised before the options have vested at the discretion and determination of the board of directors. Shares issued as a result of the early exercise of stock options are subject to repurchase by the Company upon termination of service. As of December 31, 2014 and June 30, 2015, there were 5,000 and no shares, respectively, subject to the Company’s right of repurchase. Payments received from early exercises are recorded in accrued expenses and other current liabilities on the condensed consolidated balance sheets and reclassified to additional paid-in capital as the options vest. Stock-based compensation expense related to stock options is included in the following line items in the condensed consolidated statements of operations for the three and six months ended June 30 (in thousands):
The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company’s employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. The Company uses the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumes no dividend yield, which is consistent with the Company’s history of not paying dividends. The following table summarizes the assumptions used for estimating the fair value of stock options granted to employees for the three and six months ended June 30:
The following table summarizes the Company’s stock option activity for the six months ended June 30, 2015:
The weighted-average grant date fair value for the Company’s stock options granted was $6.90 and $4.37 per share during the three months ended June 30, 2014 and 2015, respectively. The weighted-average grant date fair value for the Company’s stock options granted was $6.55 and $5.58 per share during the six months ended June 30, 2014 and 2015, respectively. The total compensation cost related to unvested stock options not yet recognized as of June 30, 2015 was $9.7 million and will be recognized over a weighted-average period of approximately 2.16 years. The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2014 and 2015 was $0.5 million and $1.1 million, respectively. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2014 and 2015 was $1.5 million and $3.5 million, respectively. During the year ended December 31, 2014, the number of stock options granted by the Company exceeded the number of shares authorized for issuance and not already committed for other purposes, such as convertible preferred stock, warrants and previously granted stock option awards. As a result, those options granted during the year ended December 31, 2014 that exceeded the authorized limit were accounted for as liability-based awards and recorded in other long-term liabilities on the condensed consolidated balance sheets as of December 31, 2014. During the year ended December 31, 2014, the Company granted 610,675 options, cumulatively, in excess of its common shares authorized. Of these, 597,425 were outstanding as of December 31, 2014. The Company recorded a liability of $0.5 million on its condensed consolidated balance sheets as of December 31, 2014 related to these liability-based equity awards. The fair value of the liability-based awards was estimated each reporting period, and the estimate of fair value was reflected in the amount of stock-based compensation expense recorded during the period. Changes in fair value are recorded in stock-based compensation expense for the period. As described in Note 1, on February 10, 2015, the Company increased its number of authorized common shares by 3,000,000 shares. As the number of shares authorized was in excess of those committed for other purposes as of that date, the liability-based awards described above were reclassified to equity-based awards at fair value and reclassified to additional paid-in capital. The favorable fair value adjustment for liability-based awards for the six months ended June 30, 2015 was $0.2 million. The reclassification from other long-term liabilities to additional paid-in capital on the condensed consolidated balance sheets was $0.3 million as of February 10, 2015. See Note 2 for the assumptions used in determining the fair value adjustment related to these liability-based awards. Employee Stock Purchase Plan In January 2015, the Company’s board of directors adopted the 2015 Employee Stock Purchase Plan (the “2015 ESPP”), which was subsequently ratified by its stockholders in February 2015. The 2015 ESPP began as of the Effective Date. The 2015 ESPP allows eligible employees to purchase shares of common stock through payroll deductions of up to 15% of their eligible compensation, subject to a total maximum share number of 1,500 per offering period and maximum share value of $25,000 per calendar year. The price at which common stock is purchased under the 2015 ESPP is equal to 85% of the fair market value of the common stock on the first day of an offering period or on the purchase date, whichever is lower. The current offering period commenced on March 5, 2015 and will allow eligible participants to purchase each share of common stock at the lower of 85% of $11.50, or 85% of the fair market value of the common stock on the purchase date. The Company has accumulated employee withholdings of $0.6 million as of June 30, 2015 associated with the next purchase date. Stock-based compensation expense related to the 2015 ESPP is included in the following line items in the condensed consolidated statements of operations for the three and six months ended June 30 (in thousands):
All Company employees are eligible to participate if they are employed for more than 20 hours per week and for more than five months per year. Eligible employees may begin participating in the 2015 ESPP at the start of any offering period. Each offering period will last a number of months determined by the compensation committee of the board of directors, not to exceed 27 months. A new offering period will begin periodically, as determined by the compensation committee. Offering periods may overlap or may be consecutive. Unless otherwise determined by the compensation committee, two offering periods of six months’ duration will begin in each year on May 1 and November 1. However, the first offering period started on the Effective Date and ends on October 31, 2015, with the first purchase date occurring on or about October 31, 2015. The Company has reserved 375,000 shares of its common stock for issuance under the 2015 ESPP. The number of shares reserved for issuance under the 2015 ESPP will automatically be increased on the first business day of each of the Company’s fiscal years, commencing in 2016, by a number equal to the least of: (1) 250,000 shares, (2) 1% of the shares of common stock outstanding on the last business day of the prior fiscal year, or (3) the number of shares determined by the Company’s board of directors. The compensation committee of the Company’s board of directors will administer the 2015 ESPP. The board of directors or the compensation committee may amend or terminate the 2015 ESPP at any time. The following table summarizes the assumptions used in the Black-Scholes option pricing model for estimating the fair value of shares to be granted under the 2015 ESPP for the three and six months ended June 30:
As of June 30, 2015, the total unrecognized stock-based compensation cost related to the 2015 ESPP was $0.3 million and will be recognized over a period of approximately 0.3 years. |
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