Our Board of Directors is authorized, subject to any limitations prescribed by law, without stockholder approval, to issue up to an aggregate of 10,000,000 shares of preferred stock at $0.001 par value in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences. The rights of the holders of common stock will be subject to the rights of holders of any preferred stock that may be issued in the future. As of December 31, 2019 and 2018, we had no outstanding shares of preferred stock.

On August 9, 2018, we announced a program to repurchase up to $100 million of our common stock (the “Stock Repurchase Program”). The terms of this program did not require us to acquire any shares and allowed for repurchases by a variety of methods, including in the open market, in block trades, through privately negotiated transactions, accelerated share repurchase transactions or any combination of such methods. The Stock Repurchase Program expired on June 30, 2019.

During the year ended December 31, 2019, we repurchased 2.8 million shares of common stock under the Stock Repurchase Program in open market transactions at a cost of $31.0 million (average price of $11.14 per share). In total, we repurchased 4.6 million shares under the Stock Repurchase Program at a cost of $54.6 million (an average price of $11.91 per share). We recorded repurchased shares as treasury stock on our consolidated balance sheet, at cost. We have not decided whether repurchased shares will be retired or sold.

During the year ended December 31, 2019, we issued 1.2 million shares as part of net-share settlements of cashless option exercises, of which 0.6 million shares were tendered to satisfy the related cost and statutory withholding requirements. We had no such transactions during the years ended December 31, 2018 and 2017.

On February 7, 2020, our Board of Directors authorized an additional increase of 4.6 million shares in the number of shares available under the 2012 Equity Incentive Plan (the 2012 Plan), which was equivalent to 4% of the shares of our common stock outstanding at December 31, 2019.

In 2004, our board of directors and stockholders approved the 2004 Plan, which became effective upon the completion of our initial public offering (IPO). Under the 2004 Plan, options, stock purchase and stock appreciation rights and restricted stock awards can be issued to our employees, officers, directors and consultants. The 2004 Plan provided that the exercise price for incentive stock options will be no less than 100% of the fair value of the Company’s common stock, as of the date of grant. Options granted under the 2004 Plan vest over periods ranging from one year to five years. The vesting period of the options is generally equivalent to the requisite service period.

In 2012, our board of directors and stockholders approved the 2012 Plan. As of the effective date of the 2012 Plan, 5.3 million shares that remained available for issuance of new grants under the 2004 Plan were transferred to the 2012 Plan. After that date, no additional options were or will be issued under the 2004 Plan. Vested options under the 2004 Plan that are not exercised within the remaining contractual life and any options under the 2004 Plan that do not vest because of terminations after the effective date of the 2012 Plan will be added to the pool of shares available for future grants under the 2012 Plan.

Under the 2012 Plan, we can issue options, stock purchase and stock appreciation rights and restricted stock awards to our employees, officers, directors and consultants. The 2012 Plan provides that the exercise price for incentive stock options will be no less than 100 percent of the fair value of our common stock as of the date of grant. Options granted under the 2012 Plan are expected to vest over periods ranging from one to four years. We assume the vesting period of the options that we grant under the 2012 Plan to be equal to the option grantee’s period of service.



			Outstanding Options
	Shares Available For Future Grant		Options Shares Subject to Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)		(in thousands)				(in years)	(in thousands)
Balance at December 31, 2016	7,920		17,663		$	3.63
Increase in shares authorized for grant	4,508		—
Shares granted	(5,282	)	5,282		$	9.90
Shares exercised	—		(2,007	)	$	3.60
Shares canceled and forfeited	484		(484	)	$	5.04
Balance at December 31, 2017	7,630		20,454		$	5.22
Increase in shares authorized for grant	4,589		—
Shares granted	(5,599	)	5,599		$	16.27
Shares exercised	—		(2,121	)	$	4.40
Shares canceled and forfeited	1,106		(1,106	)	$	11.08
Balance at December 31, 2018	7,726		22,826		$	7.72
Increase in shares authorized for grant	4,601
Shares granted	(4,976	)	4,976		$	11.52
Shares exercised	—		(2,929	)	$	3.57
Shares canceled and forfeited	1,273		(1,273	)	$	12.68
Balance at December 31, 2019	8,624		23,600		$	8.77	6.51	$	100,062

Options exercisable at December 31, 2019			15,398		$	6.80	5.45	$	91,283

Options fully vested and expected to vest at December 31, 2019			22,847		$	8.63	6.44	$	99,582

The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was $26.6 million, $26.6 million and $22.4 million, respectively, based on the difference between the closing price of our common stock on the date of exercise of the options and the exercise price.



Options Outstanding											Options Exercisable
Exercise Prices of Options					Number of Shares	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Aggregate Intrinsic Value		Number of Shares	Weighted- Average Exercise Price		Aggregate Intrinsic Value
					(in thousands)	(in years)			(in thousands)		(in thousands)			(in thousands)
$	1.48	—	$	4.00	6,950	4.2	$	3.02	$	63,079	6,874	$	3.11	$	62,446
$	4.01	—	$	7.00	3,233	4.3	$	5.32	21,974		2,949	$	5.22	20,296
$	7.01	—	$	15.00	9,353	8.3	$	10.73	15,009		3,714	$	9.99	8,541
$	15.01	—	$	24.29	4,064	8.1	$	16.85	—		1,861	$	16.89	—
					23,600	6.5	$	8.77	$	100,062	15,398	$	6.80	$	91,283

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that option holders would have received had all option holders exercised their options on December 31, 2019. The aggregate intrinsic value is the difference between our closing stock price on December 31, 2019 and the exercise price, multiplied by the number of options with exercise prices less than the closing stock price on that date.



	Year Ended December 31,
	2019	2018	2017
Weighted-average assumptions for stock options granted:
Risk-free interest rate	2.34%	2.68%	1.99%
Expected term	6.0 years	5.9 years	6.1 years
Expected volatility of stock price	67.4%	67.9%	68.1%
Dividend rate	0%	0%	0%
Weighted-average grant date fair value-based measurement	$7.09	$10.11	$6.14

The expected term of options reflected in the table above has been based on a formula that considers the expected service period and expected post-vesting termination behavior depending on whether the option holder is an employee, officer or director.

The expected volatility of our stock used in determining the fair value-based measurement of option grants to employees, officers and directors is based on the volatility of our stock price. The volatility is based on historical data of the price for our common stock for periods of time equal to the expected term of these grants.

We calculate employee stock-based compensation expense using the number of options we expect to vest, based on our estimate of the option grantees’ average length of employment, and reduced by our estimate of option forfeitures. ASC 718 requires us to estimate forfeitures at the time of option grant and revise this estimate in subsequent periods if actual forfeitures differ from our estimates.

We expense stock-based compensation related to service-based option grants to non-employees on a straight-line basis over the vesting period of the options, which approximates the period over which the related services are rendered, based on the options’ value as calculated by the Black-Scholes option pricing model. In performing this calculation we use the same assumptions as when determining the value of options granted to employees and directors, except that we use the remaining contractual term of the non-employee’s service as the options’ expected term and we recalculate the options’ value each quarter, based on the then current price of our common stock.



	Year Ended December 31,
	2019		2018		2017
	(in thousands)
Stock-based compensation capitalized in inventory	$	120	$	87	$	—
Cost of sales	144		259		—
Research and development	9,541		7,012		3,743
Selling, general and administrative	19,628		16,476		9,618
Total stock-based compensation	$	29,433	$	23,834	$	13,361