EQUITY INCENTIVE PLANS AND STOCK-BASED COMPENSATION

In May 2013, the Company's board of directors adopted, and the Company's stockholders approved, the 2013 Equity Incentive Plan, or the 2013 Plan, pursuant to which the Company initially reserved 1,250,000 shares of its common stock for issuance to its employees, directors and non-employee third parties. The 2013 Plan provides for the grant of incentive stock options to employees, and for the grant of nonqualified stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company's employees, directors, and non-employee third parties. The number of shares of common stock reserved for issuance under the 2013 Plan will automatically increase on January 1 each year, for a period of ten years, from January 1, 2014 through January 1, 2023, by 5% of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company's board of directors. Accordingly, on January 1, 2020 the number of shares reserved for issuance under the 2013 Plan increased by 1,403,873 shares. As of December 31, 2019, 2,608,909 shares remained available for future grant under the 2013 Plan. As a result of the adoption of the 2013 Plan, no further grants may be made under the former 2001 Stock Plan.

Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017 (in thousands):



	2019		2018		2017
Cost of revenue	$	995	$	911	$	951
Sales and marketing	2,385		3,144		3,827
Research and development	1,898		2,152		2,260
General and administrative	3,698		4,391		4,909
	$	8,976	$	10,598	$	11,947

Stock Option Awards

The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company's employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the "simplified method." Under the "simplified method," the expected life of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The Company used the "simplified method" due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Expected volatility is estimated based on the historical volatility of the Company's stock. Prior to the fourth quarter of 2017, expected volatility was estimated based on volatilities of publicly traded stock for comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because dividends are not expected to be paid in the near future, which is consistent with the Company's history of not paying dividends.

The following table summarizes the assumptions used for estimating the fair value of stock options granted for the years ended December 31, 2019, 2018 and 2017:



	2019	2018	2017
Risk-free interest rate	1.8% - 2.5%	2.7% - 2.9%	1.4% - 2.1%
Expected term (years)	6.25	6.25	6.25
Expected volatility	37% - 41%	43%	45% - 51%
Dividend yield	0%	0%	0%

The following is a summary of the option activity for the year ended December 31, 2019:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(in years)	(in thousands)
Outstanding balance at December 31, 2018	2,208,141		$	10.57
Granted	554,545		12.07
Exercised	(101,103	)	9.63
Forfeited	(363,401	)	12.74
Expired	(101,416	)	13.99
Outstanding balance at December 31, 2019	2,196,766		$	10.47	6.28	$	1,478
Exercisable at December 31, 2019	1,357,114		$	9.63	4.95	$	1,464
Vested and expected to vest at December 31, 2019	2,047,715		$	10.38	6.13	$	1,475

The weighted average grant date fair value for the Company's stock options granted during the years ended December 31, 2019, 2018, and 2017 was $4.51, $5.98 and $4.17 per share, respectively.

The total fair value of stock options vested during the years ended December 31, 2019, 2018 and 2017 was $1.8 million, $1.5 million and $1.2 million, respectively.

The total compensation cost related to nonvested stock options not yet recognized as of December 31, 2019 was $1.5 million and will be recognized over a weighted average period of approximately 1.8 years.

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2019, 2018, and 2017 was $0.2 million, $0.6 million and $0.5 million, respectively.

Restricted Stock Units

The following table summarizes the RSU activity for the year ended December 31, 2019:



	Number of RSUs		Weighted Average Grant-Date Fair Value
Unvested RSUs as of December 31, 2018	2,216,430		$	11.87
Granted	1,301,803		9.89
Vested	(920,627	)	11.11
Forfeited	(510,960	)	11.94
Unvested RSUs as of December 31, 2019	2,086,646		$	10.93

The total unrecognized compensation cost related to the unvested RSUs as of December 31, 2019 was $9.5 million and will be recognized over a weighted average period of approximately 1.9 years.