XML 41 R12.htm IDEA: XBRL DOCUMENT v3.20.4
STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 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, market condition-based performance restricted stock units (“PSUs”), 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 stock awards 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 awards will be canceled before expiration. RSAs generally vests over one year. RSUs generally vest over three years. Awards granted other than a stock option or a 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):
 December 31, 2020
Common stock shares available for grant3,254 
Stock options outstanding 828 
RSAs outstanding130 
RSUs outstanding802 
PSUs outstanding250 

Time-Based Stock Options
The following summarizes activities for the time-based stock options for the year ended December 31, 2020:
Number of Shares
Underlying Stock Options
(in thousands)		Weighted Average
Exercise Price
Per Share		Weighted Average
Remaining Contractual Life
(Years)		Aggregate
Intrinsic Value
Outstanding at December 31, 2019967 $8.55 5.63$16 
Granted456 7.58 
Exercised(76)7.62 
Canceled or expired(519)8.46 
Outstanding as of December 31, 2020828 $8.16 4.36$2,628 
Vested and expected to vest at December 31, 2020734 $8.24 4.20$2,273 
Exercisable at December 31, 2020362 $8.26 2.71$887 

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.
For the year ended December 31, 2020 and 2019, the weighted average grant date fair value was $2.21 and $3.69, respectively. For the years ended December 31, 2020 and 2019, the aggregate intrinsic value of stock options exercised was $0.1 million and $0.2 million, respectively.
Restricted Stock Units
The following summarizes RSUs activities for the year ended December 31, 2020:
Number of Restricted Stock UnisWeighted Average Grant Date Fair Value
Weighted Average
Remaining Contractual Life
(Years)
Aggregate
Intrinsic Value
Outstanding at December 31, 2019945 $8.81 1.25$7,020 
Granted515 5.95 
Released(367)9.01 
Forfeited(291)8.53 
Outstanding at December 31, 2020802 $6.98 1.00$9,057 
The aggregate intrinsic value is calculated as the market value as of the end of the reporting period.

Restricted Stock Awards
The following summarizes RSA activities for the year ended December 31, 2020:
Number of Restricted Stock Awards
(in thousands)
Weighted Average Grant Date Fair ValueWeighted Average Remaining Recognition Period
(Years)
Outstanding at December 31, 201991 $7.45 0.45
Granted142 6.43 
Released(71)7.18 
Forfeited(32)7.27 
Outstanding at December 31, 2020130 $6.53 0.45

Market Condition-Based Restricted Stock Units
In 2020, we granted 250,000 shares of PSUs to our executives. Each PSU represents the right to one share of our common stock. These equity awards will vest if the volume-weighted closing price of our common stock exceeds certain levels for a number of trading days within a specified time frame. These awards vest over four years, with 25% eligible for vesting on the first anniversary of the grant date and remaining shares vesting on quarterly basis over the following three years. We have 250,000 shares of PSUs outstanding as of December 31, 2020.

Employee Stock Purchase Plan
Under the 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-month 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 year ended December 31, 2020, 22,556 shares were purchased under the ESPP with average purchase price of $5.96. As of December 31, 2020, 230,881 shares were available for future purchase under the ESPP.
Stock-based Compensation Expense
Valuation and amortization methods
Stock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. Estimated forfeitures are based on historical experience at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation related to all of our stock-based awards and ESPP for the years ended December 31, 2020 and 2019 is as follows (in thousands):

 For the Years Ended
December 31,
 20202019
Stock options$1,062 $701 
RSUs, RSAs and PSUs3,638 4,692 
ESPP56 71 
Total$4,756 $5,464 
Sales and marketing$846 $947 
Research and development870 1,304 
General and administrative3,040 3,213 
Total$4,756 $5,464 

We use the Black-Scholes-Merton option pricing model to determine the fair value of our time-based options and ESPP shares. 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.
We use the Monte Carlo Simulation model to value the stock options and restricted stock units with a market condition. Valuation techniques such as a Monte Carlo Simulation model have been developed to value path-dependent awards. The Monte Carlo Simulation model is a generally accepted statistical technique used, in this instance, to simulate a range of our future stock prices.
Expected term — We estimate the expected term of options granted by calculating the average term from our historical stock option exercise experience. The expected term of ESPP shares is the length of the offering period.
Expected volatility — We estimate the volatility of our common stock taking into consideration our historical stock price movement and our expected future stock price trends based on known or anticipated events.
Risk-free interest rate — We base the risk-free interest rate that is used in the option pricing model on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options.
Expected dividend — We do not anticipate paying any cash dividends in the foreseeable future and therefore use an expected dividend yield of zero in the option-pricing model.
Forfeitures — We are required to estimate future forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting option and RSU forfeitures and record stock-based compensation expense only for those awards that are expected to vest.
The assumptions used to value options granted under our equity incentive program are as follows:
Time-based stock options:
For the Year Ended
December 31,
 20202019
Expected life (in years)4.24.4
Volatility52%55%
Interest rate1.0%2.0%
Dividend yield——
Market condition based restricted stock units:
 For the Year Ended
December 31,
 2020
2019 1
Expected life (in years)1.2N/A
Volatility52%N/A
Interest rate1.0%N/A
Dividend yield—N/A
(1) No market condition based restricted stock units were granted during the year ended December 31, 2019.
As of December 31, 2020, there was $6.6 million of unrecognized compensation cost adjusted for estimated forfeitures related to non-vested stock options, RSUs, RSAs and PSUs granted to our employees and directors. This unrecognized compensation cost will be recognized over an estimated weighted-average period of approximately 1.9 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.