STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Stock Options and Awards

Our 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. We may grant time-based options, market condition-based options, stock appreciation rights, restricted stock ("RSAs"), 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 our 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.

A summary of our equity incentive program is as follows (in thousands):

	March 31, 2020
Common stock shares available for grant	3,080
Stock options outstanding	1,370
RSAs outstanding	71
RSUs outstanding	1,192

Time-Based Stock Options

The following summarizes activities for the time-based stock options for the three months ended March 31, 2020 (in thousands except for weighted average exercise price 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, 2019	967		$	8.55	5.63	$	16
Granted	456		$	7.58
Exercised	—		$	—
Canceled or expired	(53	)	$	9.74
Outstanding as of March 31, 2020	1,370		$	8.18	6.10	$	—
Vested and expected to vest at March 31, 2020	1,130		$	8.24	6.02	$	—
Exercisable at March 31, 2020	192		$	9.80	4.11	$	—

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

Restricted Stock Units

The following summarizes RSU activities for the three months ended March 31, 2020 (in thousands except for weighted average grant date fair value 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, 2019	945		$	8.81	1.25	$	7,020
Granted	458		$	5.92
Released	(190	)	$	9.67
Forfeited	(21	)	$	7.93
Outstanding at March 31, 2020	1,192		$	7.57	1.49	$	6,389

Restricted Stock Awards

The following summarizes RSA activities for the three months ended March 31, 2020 (in thousands except for weighted average grant date fair value and weighted average remaining recognition period):

	Number of Restricted Stock Awards		Weighted Average Grant Date Fair Value		Weighted Average Remaining Recognition Period (Years)
Outstanding at December 31, 2019	91		$	7.45	0.45
Granted	12		$	5.43
Released	—		$	—
Forfeited	(32	)	$	7.27
Outstanding at March 31, 2020	71		$	7.18	0.21

Employee Stock Purchase Plan

Under our 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 our 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 three months ended March 31, 2020, 10,162 shares were purchased under the ESPP. As of March 31, 2020, 243,275 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, 2020 and 2019 (in thousands):

	Three Months Ended March 31,
	2020		2019
Stock options	$	255	$	194
RSUs and RSAs	462		1,888
Employee stock purchase plan	12		21
Total	$	729	$	2,103
Sales and marketing	$	45	$	320
Research and development	168		630
General and administrative	516		1,153
Total	$	729	$	2,103

We use the Black-Scholes-Merton option pricing model for our time-based options, single-option approach to determine the fair value of standard stock options. All share-based payment awards are amortized on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods.

The determination of the fair value of share-based awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include actual and projected employee stock option exercise behaviors that impact the expected term, our expected stock price volatility over the term of the awards, risk-free interest rate, and expected dividend.

The assumptions used to value options granted under our equity incentive program are as follows:

	Three Months Ended March 31,
	2020		2019
Expected life (in years)	4.2		4.5
Volatility	52	%	53	%
Interest rate	1.0	%	2.5	%
Dividend yield	N/A		N/A

As of March 31, 2020, there were $9.6 million of unrecognized compensation costs, 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 2.59 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.