STOCK-BASED COMPENSATION

Stock Options and Awards

The Company’s equity incentive program is a long-term retention program that is intended to attract, retain, and provide incentives for talented employees, consultants, officers, and directors and to align stockholder and employee interests. The Company may grant time-based options, market condition-based options, stock appreciation rights, restricted stock ("RSA"), restricted stock units (“RSUs”), performance shares, performance units, and other stock-based or cash-based awards to employees, officers, directors, and consultants. Under this program, stock options may be granted at prices not less than the fair market value on the date of grant for stock options. These options generally vest over four years and expire from seven to ten years from the grant date. In addition to time-based vesting, market condition-based options are subject to a market condition where the closing price of the Company stock must exceed a certain level for a number of trading days within a specified timeframe or the options will be canceled before the expiration of the options. RSAs generally vests over one year. RSUs generally vest over 3 years. Awards granted other than an option or stock appreciation right shall reduce the common stock shares available for grant by 1.75 shares for every share issued. A summary of the Company's equity incentive plan is as follows (in thousands):



		March 31, 2019
Common stock shares available for grant		917
Stock options outstanding		2,268
RSAs outstanding		63
RSUs outstanding		801

Time-Based Stock Options

The following summarizes activities for the time-based stock options for the three months ended March 31, 2019 (in thousands except for weighted average exercise per share and weighted average remaining contractual life data):



	Number of Shares Underlying Stock Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2018	1,862		$	9.44	2.85	$	751
Granted	269		$	9.82
Exercises	(12	)	$	6.02
Cancelled or expired	(122	)	$	9.92
Outstanding as of March 31, 2019	1,996		$	9.48	2.77	$	361
Vested and expected to vest at March 31, 2019	1,996		$	9.48	2.77	$	348
Exercisable at March 31, 2019	1,466		$	9.29	1.56	$	283

Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the exercise price of the Company’s common stock for the options that were in-the-money.

Market Condition-Based Stock Options

In 2014, the Company began to grant market condition-based stock options. These options will vest if the closing price of the Company stock exceeds a certain level for a number of trading days within a specified time frame or the options will be cancelled before the expiration of the options. As of March 31, 2019 and December 31, 2018, the Company had 272,081 market condition-based stock options outstanding. There were no activities during the three months ended March 31, 2019.

Restricted Stock Units

The following summarizes RSU activities for the three months ended March 31, 2019 (in thousands except for weighted average exercise per share and weighted average remaining contractual life data):



	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value		Weighted Average Remaining Service (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2018	1,091		$	10.97	0.67	$	9,773
Granted	458		$	9.50
Released	(698	)	$	11.38
Forfeited	(50	)	$	9.89
Outstanding at March 31, 2019	801		$	9.84	1.71	$	6,754

Summary of Restricted Stock Awards

The following summarizes RSA activities for the three months ended March 31, 2019 (in thousands except for weighted average exercise per share and weighted average remaining contractual life data):



	Number of Restricted Stock Awards	Weighted Average Grant Date Fair Value		Weighted Average Remaining Recognition Period (Years)
Outstanding as of December 31, 2018	55	$	13.02	0.46
Granted	8	$	9.94
Released	—	$	—
Forfeited	—	$	—
Outstanding at March 31, 2019	63	$	12.63	0.23

Employee Stock Purchase Plan

Under the Company's 1999 Employee Stock Purchase Plan ("ESPP"), eligible employees may purchase common stock through payroll deductions at a purchase price of 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or the purchase date. Participants may not purchase more than 2,000 shares in a six months offering period or purchase stock having a value greater than $25,000 in any calendar year as measured at the beginning of the offering period. A total of 1,000,000 shares of common stock has been reserved for issuance under the ESPP. During the three months ended March 31, 2019, 13,479 shares were purchased under the ESPP. As of March 31, 2019, 261,699 shares were available for future purchase under the ESPP.

Stock-based Compensation Expense

The following table summarizes stock-based compensation expenses recognized for the three months ended March 31, 2019 and 2018 (in thousands):



	Three Months Ended March 31,
	2019		2018
Stock options	$	194	$	318
RSUs and RSAs	1,888		879
Employee stock purchases	21		25
Total	$	2,103	$	1,222

Sales and marketing	$	320	$	(67	)
Research and development	630		256
General and administrative	1,153		1,033
Total	$	2,103	$	1,222

As of March 31, 2019, there was $7.6 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options, RSAs and RSUs. This cost will be recognized over an estimated weighted-average period of approximately 2.86 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.