STOCK-BASED COMPENSATION

Apr. 05, 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):


			September 30, 2021
Common stock shares available for grant(1)			—
Stock options outstanding			296
PSUs outstanding			90
RSUs outstanding			247
RSAs outstanding			—

(1) We granted equity awards under the 2011 Equity Incentive Plan (the "2011 Plan") from July 2011 through November 2020. 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 September 30, 2021.

Time-Based Stock Options

The following summarizes activities for the time-based stock options for the nine months ended September 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	(206)	$	7.46
Outstanding at September 30, 2021	296	$	7.96	3.85	$	171
Vested and expected to vest at September 30, 2021	272	$	7.99	3.74	$	171
Exercisable at September 30, 2021	170	$	8.20	2.95	$	171

Aggregate intrinsic value is the difference between the closing price on the last trading day in September 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 nine months ended September 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	(319)	$	7.45
Forfeited	(236)	$	6.67
Outstanding at September 30, 2021	247	$	6.67	0.79	$	1,690

Restricted Stock Awards

The following summarizes RSA activities for the nine months ended September 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 September 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 nine months ended September 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


Forfeited	(160)	$	6.20
Outstanding at September 30, 2021	90	$	6.20	1.33

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, 2021, 25,033 shares were purchased under the ESPP. As of September 30, 2021, 205,848 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, 2021 and 2020 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Stock options	$	123	$	259	$	317	$	812
RSUs, RSAs and PSUs	286		1,065		1,635		2,583
Employee stock purchase plan	6		15		45		38
Total	$	415	$	1,339	$	1,997	$	3,433

Sales and marketing	$	141	$	205	$	678	$	593
Research and development	118		233		653		653
General and administrative	156		901		666		2,187
Total	$	415	$	1,339	$	1,997	$	3,433

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 nine months ended September 30, 2021.

As of September 30, 2021, there were $3.2 million of unrecognized compensation costs, adjusted for estimated forfeitures, related to non-vested stock options, RSAs, RSUs and PSUs. This unrecognized compensation cost will be recognized over an estimated weighted-average period of approximately 1.4 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.