Stockholders' Equity
 12 Months Ended
Dec. 31, 2016
Equity [Abstract]  
Stockholders' Equity
Stockholders’ Equity
Stock repurchase program
In April 2016, our Board of Directors approved the extension of our existing stock repurchase program that authorized the purchase of up to 20% of the outstanding shares of our common stock or an aggregate of 3.5 million shares of our common stock. Under the stock repurchase program, any stock repurchase could be made through open market and privately negotiated transactions, or as otherwise determined by management, at times and in such amounts as management deemed appropriate and could be made pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The timing and amount of stock repurchased under the program depended on a variety of factors including stock price, market conditions, corporate and regulatory requirements (including applicable securities laws and regulations and the rules of the NASDAQ Stock Market), any additional constraints related to material inside information the Company may have possessed and capital availability. In February 2017, our Board of Directors terminated the stock repurchase program.
During 2016, we repurchased 315,503 shares of our common stock at an average cost of $3.22 per share for a total cost of $1.0 million.
During 2015, we repurchased 931,664 shares of our common stock at an average cost of $4.48 per share for a total cost of $4.2 million
Stock option plan
The Company adopted stock option plans in 1999, 2004 and 2012 under which 4,842,616 options have been authorized but not issued as of December 31, 2016. The total remaining available to be granted as of December 31, 2016 is 2,255,692 shares.
The plans are administered by the Board of Directors, which identifies optionees and determines the terms of options granted, including exercise price, number of shares subject to the option and exercisability thereof, except in the case of options granted to officers, directors and consultants under the 1999 Plan which options shall become exercisable at a rate of no less than 20% per year. The 1999 Plan provides for incentive stock options and stock appreciation rights to be issued to employees of the Company and non-statutory stock options, stock bonuses, and rights to purchase restricted stock to be issued to employees, directors, and consultants of the Company. The 2004 Plan provides for incentive stock options to be issued to employees of the Company and nonqualified stock options to be issued to employees, consultants, and outside directors of the Company. The 2012 Stock Plan provides for the granting of stock options, restricted stock, stock units and stock appreciation rights.
Exercise prices for incentive stock options shall be no less than 100% of the fair market value of the common stock on the grant date. Exercise prices for non-statutory and nonqualified stock options may not be less than 85% of the fair market value of the common stock on the date of grant and are determined by the Board of Directors. Stock option awards generally vest with respect to 25% of the shares one year after the options' vesting commencement date, and the remainder ratably on a monthly basis over the following three years.
Employee Stock Purchase Plan
In August 2011, the Company’s Board of Directors approved the reservation for future issuance under the Company’s Employee Stock Purchase Plan, or the ESPP, of a total of 250,000 shares of common stock. The ESPP became effective immediately prior to the completion of the IPO. The price of stock purchased under the ESPP shall not be lower than 85% of the fair market value per share of the Company’s common stock on either the last trading day preceding the applicable offering period or on the last day of the purchase period, whichever is less. There have been no purchases under the ESPP in 2016 or 2015.
Stock option activity
The following table summarizes stock option activity related to shares of common stock (in thousands, except weighted average exercise price):

 
Number of
stock options
outstanding
 
Weighted-
average
exercise
price
 
Weighted-
average
remaining
contractual
life (years)
 
Aggregate
intrinsic
value
Outstanding—December 31, 2015
2,168

 
$
6.48

 
5.20
 
$
118

Granted
1,010

 
3.47

 
 
 
 
Exercised
(2
)
 
3.20

 
 
 
 
Forfeited
(1,029
)
 
7.07

 
 
 
 
Outstanding—December 31, 2016
2,147

 
$
4.79

 
6.35
 
$
8

Options vested and expected to vest—December 31, 2016
1,418

 
$
5.32

 
5.32
 
$
7

Options exercisable—December 31, 2016
773

 
$
6.39

 
3.44
 
$
4


The total intrinsic value of options exercised during the years ended December 31, 2016 and 2015 was $0.0 million and $0.1 million, respectively.
The following table summarizes information regarding stock options outstanding at December 31, 2016:

 
Options outstanding
 
Options vested and exercisable
Exercise prices
Number of
stock options
outstanding
 
Weighted
average
remaining
contractual life
(years)
 
Weighted
average
exercise price
per share
 
Shares subject
to stock options
 
Weighted
average
exercise price
per share
 
(in thousands)
 
 
 
 
 
(in thousands)
 
 
$2.12-$3.09
216

 
9.53
 
$
3.04

 
5

 
$
2.12

$3.25-$3.27
280

 
9.30
 
$
3.26

 
—

 
$
—

$3.74-$3.74
350

 
9.25
 
$
3.74

 
—

 
$
—

$4.14-$4.14
147

 
8.38
 
$
4.14

 
58

 
$
4.14

$4.30-$4.30
308

 
4.80
 
$
4.30

 
143

 
$
4.30

$4.42-$4.66
179

 
6.61
 
$
4.60

 
60

 
$
4.58

$5.07-$5.07
294

 
3.90
 
$
5.07

 
191

 
$
5.07

$5.58-$5.84
226

 
2.30
 
$
5.66

 
172

 
$
5.66

$6.01-$17.94
128

 
1.20
 
$
11.92

 
125

 
$
12.02

$18.80-$18.80
19

 
0.68
 
$
18.80

 
19

 
$
18.80

$2.12-$18.80
2,147

 
6.35
 
$
4.79

 
773

 
$
6.39


Included in the stock options outstanding as of December 31, 2016 are 519,000 non-statutory stock options that have both three-year service criteria and vesting contingent on financial performance measures at the end of a three year performance period ending December 31, 2018. The performance criteria for these awards consist of the following financial measures during the performance period: (i) revenue during each period, (ii) cumulative Adjusted EBITDA; and (iii) cumulative free cash flow. Compensation cost associated with these performance-based stock options is recognized using an attribution model and ultimately based on whether or not satisfaction of the performance criteria is probable. The total compensation cost we recognize under these option awards will be based upon the results of the financial measures. As of December 31, 2016, we have estimated that it is not probable that the performance criteria will be met and, accordingly, no stock compensation expense for the performance shares has been recorded. At December 31, 2016, we had $1.0 million of unrecognized compensation expense related to these performance awards.
Restricted stock unit activity
We may grant restricted stock units, or RSUs, to our employees, consultants or outside directors under the provisions of the 2012 Stock Plan. The cost of RSUs is determined using the fair value of our common stock on the date of grant. RSUs typically vest 25% one year after the RSUs' vesting commencement date, and the remainder ratably on a quarterly basis over the following three years. Compensation cost is amortized on a straight-line basis over the requisite service period.
Restricted stock award and restricted stock unit activity is summarized as follows (unit numbers in thousands):

 
Number of
units
outstanding
 
Weighted
average grant
date fair value
per unit
Awarded and unvested at December 31, 2015
329

 
$
4.40

Granted
543

 
3.52

Vested
(190
)
 
4.05

Forfeited and canceled
(242
)
 
4.01

Awarded and unvested at December 31, 2016
440

 
$
3.69


Stock-based compensation expense
The fair value of the option awards was calculated using the Black-Scholes option valuation model with the following assumptions:

 
Year Ended December 31,
 
2016
 
2015
 
Expected term (in years)
6.0

 
4.9

 
Risk-free interest rate
1.40
%
 
1.37
%
 
Expected volatility
57
%
 
47
%
 
Expected dividend rate
0
%
 
0
%
 

For 2016, since we now have enough history, the expected term of all options granted now gives consideration to historical exercises, post-vesting cancellations and the options' contractual terms. In 2015, the expected term was calculated using the simplified method. The risk-free rate is based on the rates in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to each grant’s expected life. Beginning in 2016, the expected volatility is based on our historical stock price. Prior to 2016, the expected volatility was based upon the volatility of a group of publicly traded industry peer companies. A dividend yield of zero is applied since the Company has not historically paid dividends and has no intention to pay dividends in the near future.
The weighted-average fair value of options granted was $1.86 and $1.79 for the years ended December 31, 2016 and 2015, respectively.
Employee stock-based compensation expense recorded is calculated and recorded based on awards ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Cost of net revenues and operating expenses include stock-based compensation as follows (in thousands):

 
Year Ended December 31,
 
2016
 
2015
 
Cost of net revenue
$
49

 
$
163

 
Sales and marketing
269

 
300

 
Technology and development
81

 
180

 
General and administrative
1,208

 
1,063

 
Total stock-based compensation expense
$
1,607

 
$
1,706

 

Capitalizable stock-based compensation relating to inventory or deferred cost of revenues was not significant for any period presented. We capitalized $24,000 and $15,000 of stock-based compensation relating to software developed for internal use, including website development costs during the years ended December 31, 2016 and 2015, respectively.
At December 31, 2016, we had $2.6 million of total unrecognized compensation expense, net of estimated forfeitures, related to stock option and restricted stock plans that will be recognized over a weighted-average period of approximately two years.