Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

The Company has two stock incentive plans, as described below.

2013 Stock Incentive Plan

The Amended and Restated 2013 Stock Incentive Plan (the “2013 Plan”) of the Company became effective upon the closing of its initial public offering. The 2013 Plan provides for the grant of options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to employees, officers, directors, consultants and advisers of the Company. Under the 2013 Plan, the Company may issue up to 38,000,000 shares of the Company’s common stock. At March 31, 2020, there were 4,870,928 shares available for grant under the 2013 Plan.

2011 Stock Incentive Plan

As of February 9, 2016, the effective date of the acquisition of Constant Contact, the Company assumed and converted certain outstanding equity awards granted by Constant Contact under the Constant Contact 2011 Stock Incentive Plan (the “2011 Plan”) prior to the effective date of the acquisition (the “Assumed Awards”) into corresponding equity awards with respect to shares of the Company’s common stock. In addition, the Company assumed certain shares of Constant Contact common stock, par value $0.01 per share, available for issuance under the 2011 Plan (the “Available Shares”), which will be available for future issuance under the 2011 Plan in satisfaction of the vesting, exercise or other settlement of options and other equity awards that may be granted by the Company following the effective date of the acquisition of Constant Contact in reliance on the prior approval of the 2011 Plan by the stockholders of Constant Contact. The Assumed Awards were converted into 2,143,987 stock options and 2,202,846 restricted stock units with respect to the Company’s common stock and the Available Shares were converted into 10,000,000 shares of the Company’s common stock reserved for future awards under the 2011 Plan. At March 31, 2020, there were 8,913,315 shares available for grant under the 2011 Plan.

All Plans

The following table presents total stock-based compensation expense recorded in the consolidated statements of operations and comprehensive income (loss) for all awards granted under the Company’s 2013 Plan and 2011 Plan:



	Three Months Ended March 31,
	2019		2020
	(unaudited, in thousands)
Cost of revenue	$	915	$	739
Sales and marketing	1,754		1,938
Engineering and development	1,333		1,092
General and administrative	5,014		6,067
Total stock-based compensation expense	$	9,016	$	9,836

Under both the 2011 and 2013 Plans combined, as of March 31, 2020, the Company had approximately $4.2 million of unrecognized stock-based compensation expense related to option awards that will be recognized over 1.4 years and approximately $67.7 million of unrecognized stock-based compensation expense related to restricted stock awards and restricted stock units that will be recognized over 2.3 years.

2013 Stock Incentive Plan

The following table provides a summary of the Company’s stock options as of March 31, 2020 and the stock option activity for all stock options granted under the 2013 Plan during the three months ended March 31, 2020:



	Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(3) (in thousands)
	(unaudited)
Outstanding at December 31, 2019	5,276,679		$	10.57
Granted	—		$	—
Exercised	—		$	—
Forfeited	(674	)	$	11.10
Expired	(119,716	)	$	10.16
Outstanding at March 31, 2020	5,156,289		$	10.58	6.5	$	—
Exercisable at March 31, 2020	4,141,636		$	11.22	6.1	$	—
Expected to vest after March 31, 2020⁽¹⁾	1,014,653		$	7.97	8.4	$	—
Exercisable as of March 31, 2020 and expected to vest⁽²⁾	5,156,289		$	10.58	6.5	$	—


⁽¹⁾	This represents the number of unvested options outstanding as of March 31, 2020 that are expected to vest in the future.


⁽²⁾	This represents the number of vested options as of March 31, 2020 plus the number of unvested options outstanding as of March 31, 2020 that are expected to vest in the future.


⁽³⁾	The aggregate intrinsic value was calculated based on the positive difference, if any, between the estimated fair value of the Company’s common stock on March 31, 2020 of $1.93 per share, or the date of exercise, as appropriate, and the exercise price of the underlying options.

Restricted stock units granted under the 2013 Plan generally vest annually over a three-year period, unless otherwise determined by the Company’s board of directors. The following table provides a summary of the Company’s restricted stock unit activity for the 2013 Plan during the three months ended March 31, 2020:



	Restricted Stock Units		Weighted- Average Grant Date Fair Value
	(unaudited)
Non-vested at December 31, 2019	9,005,109		$	6.90
Granted	8,548,413		$	3.90
Vested	(1,295,109	)	$	7.92
Canceled	(337,795	)	$	6.55
Non-vested at March 31, 2020	15,920,618		$	5.22

Restricted stock awards granted under the 2013 Plan generally vest annually over a four-year period, unless otherwise determined by the Company’s board of directors. The following table provides a summary of the Company’s restricted stock award activity for the 2013 Plan during the three months ended March 31, 2020:



	Restricted Stock Awards		Weighted- Average Grant Date Fair Value
	(unaudited)
Non-vested at December 31, 2019	159,517		$	10.68
Granted	—		$	—
Vested	(5,675	)	$	8.15
Canceled	(1,466	)	$	11.10
Non-vested at March 31, 2020	152,376		$	10.77

2011 Stock Incentive Plan

The following table provides a summary of the Company’s stock options as of March 31, 2020 and the stock option activity for all stock options granted under the 2011 Plan during the three months ended March 31, 2020:



	Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value(3) (in thousands)
	(unaudited)
Outstanding at December 31, 2019	533,547		$	8.83
Granted	—		$	—
Exercised	(3,597	)	$	3.68
Forfeited	(1,277	)	$	9.43
Expired	(26,694	)	$	7.74
Outstanding at March 31, 2020	501,979		$	8.92	1.7	$	—
Exercisable at March 31, 2020	492,688		$	8.92	1.7	$	—
Expected to vest after March 31, 2020⁽¹⁾	9,291		$	9.09	3.5	$	—
Exercisable as of March 31, 2020 and expected to vest⁽²⁾	501,979		$	8.92	1.7	$	—


⁽¹⁾	This represents the number of unvested options outstanding as of March 31, 2020 that are expected to vest in the future.


⁽²⁾	This represents the number of vested options as of March 31, 2020 plus the number of unvested options outstanding as of March 31, 2020 that are expected to vest in the future.


⁽³⁾	The aggregate intrinsic value was calculated based on the positive difference, if any, between the estimated fair value of the Company’s common stock on March 31, 2020 of $1.93 per share, or the date of exercise, as appropriate, and the exercise price of the underlying options.

Unless otherwise determined by the Company’s board of directors, restricted stock units granted under the 2011 Plan generally vest annually over a three- or a four-year period. The following table provides a summary of the Company’s restricted stock unit activity for the 2011 Plan during the three months ended March 31, 2020:



	Restricted Stock Units		Weighted- Average Grant Date Fair Value
	(unaudited)
Non-vested at December 31, 2019	320,142		$	8.35
Granted	—		$	—
Vested	(5,823	)	$	7.44
Canceled	(27,855	)	$	8.66
Non-vested at March 31, 2020	286,464		$	8.34