STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

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, 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 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):


			June 30, 2021
Common stock shares available for grant(1)			—
Stock options outstanding			375
PSUs outstanding			190
RSUs outstanding			364
RSAs outstanding			—

(1) We granted equity awards under the 2011 Equity Incentive Plan (the "2011 Plan") from July 2011 through April 2021. The 2011 Plan expired on April 5, 2021, and the remaining 3,708,238 authorized shares were cancelled on the 2011 Plan expiration date. We do not have an active equity incentive plan as of June 30, 2021.

Time-Based Stock Options

The following summarizes activities for the time-based stock options for the six months ended June 30, 2021 (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, 2020	828	$	8.16	4.36	$	2,628

Exercised	(326)	$	8.79
Canceled or expired	(127)	$	7.46
Outstanding at June 30, 2021	375	$	7.85	4.80	$	431
Vested and expected to vest at June 30, 2021	375	$	7.85	4.80	$	431
Exercisable at June 30, 2021	158	$	8.21	4.24	$	161

Aggregate intrinsic value is the difference between the closing price on the last trading day in June 2021 and the exercise price, multiplied by the number of in-the-money stock options.

Restricted Stock Units

The following summarizes RSU activities for the six months ended June 30, 2021 (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, 2020	802	$	6.98	1.00	$	9,057

Released	(310)	$	7.45
Forfeited	(128)	$	6.63
Outstanding at June 30, 2021	364	$	6.71	1.01	$	3,197

Restricted Stock Awards

The following summarizes RSA activities for the six months ended June 30, 2021 (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, 2020	130	$	6.53	0.45
Granted	—	$	—
Released	(130)	$	6.53
Forfeited	—	$	—
Outstanding at June 30, 2021	—	$	—	0.00

Market Condition-Based Restricted Stock Units

In the fourth quarter of 2020, we granted 250,000 shares of PSUs to our executives. Each PSU represents the right to one share of our common stock with vesting subject to: (a) the achievement of specified levels of the volume weighted average closing prices of our common stock during any one hundred (100) day-period between November 10, 2020 and November 10, 2025, subject to certification by the Compensation Committee (“Performance Milestones”); and (b) continued employment with us through the later of each achievement date or service vesting date, which occurs over a four (4) year-period commencing on November 10, 2020. The Performance Milestones of the PSUs were fully achieved, subject to final certification by the Compensation Committee.

The following summarizes PSU activities for the six months ended June 30, 2021 (in thousands except for weighted average grant date fair value and weighted average remaining recognition period):


	Number of Market Condition-Based Restricted Stock Units	Weighted Average Grant Date Fair Value		Weighted Average Remaining Recognition Period (Years)
Outstanding at December 31, 2020	250	$	6.20	2.08
Granted	—	$	—
Released	—	$	—
Forfeited	(60)	$	6.20
Outstanding at June 30, 2021	190	$	6.20	1.58

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 six months ended June 30, 2021, 15,543 shares were purchased under the ESPP. As of June 30, 2021, 215,338 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, 2021 and 2020 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Stock options	$	179	$	298	$	194	$	553
RSUs, RSAs and PSUs	852		1,056		1,349		1,518
Employee stock purchase plan	20		11		39		23
Total	$	1,051	$	1,365	$	1,582	$	2,094

Sales and marketing	$	313	$	343	$	537	$	388
Research and development	217		251		535		420
General and administrative	521		771		510		1,286
Total	$	1,051	$	1,365	$	1,582	$	2,094

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.

We did not grant stock options during the six months ended June 30, 2021.

As of June 30, 2021, there were $4.1 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 1.8 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.