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 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 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 vest 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. On June 14, 2019, the Company's stockholders approved an increase to the number of shares reserved for issuance by 2,595,751 shares.

A summary of the Company's equity incentive plan is as follows (in thousands):



		June 30, 2019
Common stock shares available for grant		3,642
Stock options outstanding		2,035
RSAs outstanding		80
RSUs outstanding		753

Time-Based Stock Options

The following summarizes activities for the time-based stock options for the six months ended June 30, 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	369		$	9.13
Exercised	(62	)	$	6.01
Cancelled or expired	(406	)	$	10.02
Outstanding as of June 30, 2019	1,763		$	9.36	2.10	$	88
Vested and expected to vest at June 30, 2019	1,763		$	9.36	2.10	$	88
Exercisable at June 30, 2019	1,324		$	9.46	0.68	$	29

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 June 30, 2019 and December 31, 2018, the Company had 272,081 market condition-based stock options outstanding. There were no market condition-based options activities during the six months ended June 30, 2019.

Restricted Stock Units

The following summarizes RSU activities for the six months ended June 30, 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	586		$	9.06
Released	(698	)	$	11.38
Forfeited	(226	)	$	9.73
Outstanding at June 30, 2019	753		$	9.48	1.57	$	5,729

Summary of Restricted Stock Awards

The following summarizes RSA activities for the six months ended June 30, 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	88		$	7.51
Released	(63	)	$	12.63
Forfeited	—		$	—
Outstanding at June 30, 2019	80		$	7.27	0.96

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 1.0 million shares of common stock has been reserved for issuance under the ESPP. During the six months ended June 30, 2019, 13,479 shares were purchased under the ESPP. As of June 30, 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 and six months ended June 30, 2019 and 2018 (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Stock options	$	122	$	356	$	316	$	674
RSUs and RSAs	938		2,149		2,826		3,028
Employee stock purchase plan	21		25		42		50
Total	$	1,081	$	2,530	$	3,184	$	3,752

Sales and marketing	$	173	$	366	$	493	$	299
Research and development	190		564		820		820
General and administrative	718		1,600		1,871		2,633
Total	$	1,081	$	2,530	$	3,184	$	3,752

As of June 30, 2019, there was $7.9 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 2.72 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.