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 stock 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 whereby the closing price of the Company common stock must exceed a certain level for a number of trading days within a specified time frame or the options will be canceled before the expiration of the options. RSAs generally vest over one year. RSUs generally vest over three years. Awards granted other than a stock 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 common stock shares reserved for issuance by 2,595,751 shares.

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



		September 30, 2019
Common stock shares available for grant		3,172
Standard and market condition-based stock options outstanding		2,011
RSAs outstanding		91
RSUs outstanding		949

Time-Based Stock Options

The following summarizes activities for the time-based stock options for the nine months ended September 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 at December 31, 2018	1,862		$	9.44	2.85	$	751
Granted	783		$	8.25
Exercised	(173	)	$	7.16
Canceled or expired	(733	)	$	9.78
Outstanding as of September 30, 2019	1,739		$	8.98	3.35	$	128
Vested and expected to vest at September, 2019	1,739		$	8.98	3.35	$	128
Exercisable at September 30, 2019	927		$	9.57	0.52	$	10

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 stock 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 stock options will be canceled before the expiration of the stock options. As of September 30, 2019 and December 31, 2018, the Company had 272,081 market condition-based stock options outstanding. There were no market condition-based stock options granted, exercised or canceled during the nine months ended September 30, 2019.

Restricted Stock Units

The following summarizes RSU activities for the nine months ended September 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 Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018	1,091		$	10.97	0.67	$	9,773
Granted	864		$	8.57
Released	(709	)	$	11.32
Forfeited	(297	)	$	9.84
Outstanding at September 30, 2019	949		$	8.88	1.47	$	7,259

Restricted Stock Awards

The following summarizes RSA activities for the nine months ended September 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 at December 31, 2018	55		$	13.02	0.46
Granted	114		$	7.06
Released	(62	)	$	12.63
Forfeited	(16	)	$	7.27
Outstanding at September 30, 2019	91		$	7.45	0.70

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 nine months ended September 30, 2019, 21,741 shares were purchased under the ESPP. As of September 30, 2019, 253,437 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 nine months ended September 30, 2019 and 2018 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Stock options	$	200	$	286	$	516	$	960
RSUs and RSAs	971		2,206		3,798		5,234
Employee stock purchase plan	16		22		57		72
Total	$	1,187	$	2,514	$	4,371	$	6,266

Sales and marketing	$	207	$	377	$	700	$	675
Research and development	234		561		1,054		1,382
General and administrative	746		1,576		2,617		4,209
Total	$	1,187	$	2,514	$	4,371	$	6,266

As of September 30, 2019, there was $9.3 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options, RSAs and RSUs. This unrecognized compensation cost will be recognized over an estimated weighted-average period of approximately 2.78 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.