STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

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 equity 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. Stock options generally vest over four years and expire seven years from the grant date. 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):


			September 30, 2020
Common stock shares available for grant			2,814
Stock options outstanding			1,367
RSAs outstanding			130
RSUs outstanding			1,067

Time-Based Stock Options

The following summarizes activities for the time-based stock options for the nine months ended September 30, 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	(2)	$	8.13
Canceled or expired	(54)	$	9.71
Outstanding at September 30, 2020	1,367	$	8.18	5.59	$	—
Vested and expected to vest at September 30, 2020	1,192	$	8.23	5.53	$	—
Exercisable at September 30, 2020	393	$	8.82	4.61	$	—

Aggregate intrinsic value is the difference between the closing price on the last trading day in September 30, 2020 and the exercise price, multiplied by the number of in-the-money stock options.

Restricted Stock Units

The following summarizes RSU activities for the nine months ended September 30, 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	515	$	5.95
Released	(337)	$	8.99
Forfeited	(56)	$	8.31
Outstanding at September 30, 2020	1,067	$	7.39	1.20	$	7,524

Restricted Stock Awards

The following summarizes RSA activities for the nine months ended September 30, 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	142	$	6.43
Released	(71)	$	7.18
Forfeited	(32)	$	7.27
Outstanding at September 30, 2020	130	$	6.53	0.70

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 nine months ended September 30, 2020, 22,556 shares were purchased under the ESPP. As of September 30, 2020, 230,881 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, 2020 and 2019 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Stock options	$	259	$	200	$	812	$	516
RSUs and RSAs	1,065		971		2,583		3,798
Employee stock purchase plan	15		16		38		57
Total	$	1,339	$	1,187	$	3,433	$	4,371

Sales and marketing	$	205	$	207	$	593	$	700
Research and development	233		234		653		1,054
General and administrative	901		746		2,187		2,617
Total	$	1,339	$	1,187	$	3,433	$	4,371

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 September 30,			Nine Months Ended September 30,
	2020 (1)	2019		2020		2019
Expected life (in years)	N/A	4.3		4.2		4.3
Volatility	N/A	53	%	52	%	53	%
Interest rate	N/A	1.8	%	1.0	%	1.7	%
Dividend yield	N/A	—	%	—	%	—	%

(1) There were no stock option grants in the three months ended September 30, 2020.

As of September 30, 2020, there were $7.5 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 2.1 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.