Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

In May 2013, the Company’s stockholders approved a new stock incentive plan authorizing an additional 1.6 million shares, plus remaining available shares under a prior plan for issuance under the new plan. Combined with the legacy stock incentive plans, there are approximately 1.3 million shares available for grant as of June 30, 2015.

Performance-based stock awards

The Company has issued performance-based stock options and performance-based restricted stock units ("RSUs"), the vesting of which is contingent upon the achievement of certain performance criteria related to the operating performance of the Company, as well as successful and timely development and market acceptance of future product introductions. In addition, certain of the performance RSUs have additional service requirements subsequent to the achievement of the performance criteria. Compensation expense is recognized over the implicit service period (the longer of the period the performance condition is expected to be achieved or the required service period) based on management’s estimate of the probability of the performance criteria being satisfied, adjusted at each balance sheet date.

Restricted Stock Units

The following table summarizes RSU activity for the six months ended June 30, 2015 (number of units and aggregate intrinsic value in thousands):

	Number of Units		Weighted Average Grant-Date Fair Value		Aggregate Intrinsic Value
Units outstanding, beginning of year	1,226		$	13.23
Granted	368		27.44
Released	(364	)	11.14
Forfeited	(47	)	15.70
Units outstanding, end of period	1,183		18.18		$	39,411

Aggregate intrinsic value represents the Company’s closing stock price on the last trading day of the period, which was $33.31 per share, multiplied by the number of RSUs outstanding. As of June 30, 2015, there was $17.5 million in unrecognized compensation costs related to RSUs under the Company's stock plans. The Company expects to recognize the cost related to the RSUs over a weighted average period of 2.85 years. RSUs are released when vesting requirements are met.

During the six months ended June 30, 2015, the Company granted approximately 36,101 performance-based RSUs, which are included in the table above. As of June 30, 2015, the performance criteria had not been met for any of the 0.1 million performance-based RSUs outstanding. Certain of the performance-based RSUs granted in 2015 and 2014 contain provisions whereby the amount of RSUs that ultimately vest is dependent upon the level of achievement of performance metrics. The amount of RSUs included in the table above related to such grants is the target level, which is the Company's best estimate of the amount of RSUs that will vest. The maximum additional number of performance-based RSUs that could be earned is 0.1 million, which are not included in the table above.

Certain RSUs that vested in the six months ended June 30, 2015 were net-share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. Total shares withheld were approximately 25,000 and had a value of approximately $0.6 million on their respective vesting dates as determined by the Company’s closing stock price. Payments for the employees’ tax obligations are reflected as a financing activity within the statement of cash flows. These net-share settlements had the effect of share repurchases by the Company as they reduced the amount of shares that would have otherwise been issued as a result of the vesting.

Stock Option Activity

The following table summarizes stock option activity for the six months ended June 30, 2015 (number of units and aggregate intrinsic value in thousands):

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
Options outstanding, beginning of year	1,641		$	5.26
Granted	—		—
Exercised	(500	)	4.96
Expired / terminated	(8	)	8.71
Options outstanding, end of period	1,133		5.35		3.87	$	31,685
Options exercisable, end of period	1,101		5.37		3.88	30,772
Options expected to vest, end of period	26		4.75		3.61	750

Aggregate intrinsic value represents the difference between the exercise price of the underlying stock option awards and the closing market price of the Company's common stock of $33.31 on June 30, 2015. The intrinsic value of options exercised for the six months ended June 30, 2015 and 2014 was $13.2 million and $12.6 million, respectively. Options expected to vest are presented net of forfeitures. As of June 30, 2015, total options outstanding includes approximately 0.2 million performance-based stock options, of which approximately 30,600 were unvested and 25,000 expected to vest.

Stock-based Compensation Expense

The estimated fair value of stock-based awards is amortized to expense on a straight-line basis over the service periods. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company’s forfeiture rate was calculated based on its historical experience of awards which ultimately vested.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Cost of products sold and services delivered	$	89	$	65	$	159	$	88
Sales, general and administrative expenses	925		948		1,858		1,658
Research and development expenses	665		494		1,206		938
Total stock-based compensation	$	1,679	$	1,507	$	3,223	$	2,684

Stock Repurchase Plan

In May 2014, the Company announced that TASER’s Board of Directors authorized a stock repurchase program to acquire up to $30.0 million of the Company’s outstanding common stock subject to stock market conditions and corporate considerations. There were no stock repurchase transactions during the six months ended June 30, 2015. During the three months ended June 30, 2014, the Company purchased 1.5 million common shares under this program for a total cost of approximately $19.6 million, or a weighted average cost of $13.16 per share. The weighted average cost includes the average price paid per share of $13.13, plus any applicable administrative costs for the transaction.  As of June 30, 2015, $7.6 million remains available under the plan for future purchases.