EQUITY AWARD PLAN

Stock Option Plans—The Company has two equity incentive plans: the 2002 Stock Incentive Plan (the "2002 Plan") and the 2012 Plan. Effective January 31, 2012, the Company’s board of directors terminated the 2002 Plan. The 2012 Plan is the successor to and continuation of the 2002 Plan. The 2012 Plan was subsequently amended and restated in July 2012 and further amended in September 2012, and approved by the Company’s stockholders in October 2012.

The Company’s 2012 Plan provides for the granting of stock options, restricted stock awards, RSUs, stock appreciation rights, and performance shares to employees, directors, and consultants. Awards granted under the 2012 Plan vest over the periods determined by the board of directors, generally one to four years, beginning from the vesting commencement date, and expire no more than 10 years from the date of grant.

The maximum number of shares of common stock that may be issued under the Company’s 2012 Plan is 32,000,000, which includes shares reserved for issuance under the 2002 Stock Plan at the time the 2012 Plan became effective, and any shares granted under the 2002 Plan that would have otherwise returned to the 2002 Plan. Each year on January 1, starting in January 2013, the maximum number of shares that may be issued increases by the lesser of, 5% of the total number of shares of the Company's capital stock outstanding on December 31 of the preceding year, or a lesser number of shares as determined by the board of directors. As of December 31, 2014 and 2013, 29.3 million and 29.2 million shares were authorized for issuance under these plans.

Employee Stock Purchase Plan—The ESPP was adopted by the board of directors and approved by the stockholders on October 5, 2012 and was effective upon completion of the Company’s initial public offering.

Under the Company's ESPP, the Company can grant stock purchase rights to all eligible employees during a one year offering period with purchase dates at the end of each six-month purchase period. Each six month purchase period will begin on the first trading date on or after May 16 and November 16 of each year. Shares are purchased through the accumulation of employees' payroll deductions, up to a maximum of 15% of employees' compensation for each purchase period, at purchase prices equal to 85% of the lesser of the closing price of the Company’s common stock on the first trading day of the applicable offering period or the purchase date. No participant may purchase more than $25,000 worth of common stock or 2,000 shares of common stock in any one year offering period. The ESPP is compensatory and results in compensation expense.

At the time the ESPP became effective, a total of 1,500,000 shares of common stock were reserved for issuance. The number of shares of common stock reserved for issuance under the ESPP will increase automatically each year on January 1, starting in January 2013, continuing through and including January 1, 2022, by the lesser of (i) 2% of the total number of shares of the common stock outstanding on December 31 of the preceding calendar year; (ii) 3,000,000 shares of common stock; or (iii) such lesser number of shares as determined by the board of directors. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available. As of December 31, 2014 and 2013, approximately 3.8 million and 2.6 million shares were authorized for issuance under the ESPP. Employees purchased approximately 482,000 shares of common stock at an average exercise price of $8.91 during the year ended December 31, 2014.

Stock Option Activity

The following table summarizes the outstanding stock option activity (in thousands, except per share amounts and years):



	Options Outstanding
	Number of Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance, December 31, 2013	19,609	$	4.51	7.3	$	195,142
Options granted	1,585	13.00
Options exercised	(3,618)	2.11
Options forfeited	(534)	10.94
Balance, December 31, 2014	17,042	$	5.60	6.7	$	119,782
Options exercisable as of December 31, 2014	11,278	$	3.74	6.0	$	97,008
Options vested and expected to vest as of December 31, 2014	16,853	$	5.54	6.7	$	119,331

The weighted average grant date fair value of stock options was approximately $7.42, $10.33 and $3.91 for the years ended December 31, 2014, 2013 and 2012, respectively.

The total intrinsic value of options exercised was approximately $39.0 million, $74.1 million and $4.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.

RSU Activity

The following table summarizes the outstanding activity of RSUs (in thousands, except per share amounts and years):



	RSUs Outstanding
	Number of Shares		Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance, December 31, 2013	1,011		$	17.11	1.6	$	14,356
RSUs granted	2,289		12.70
RSUs vested	(319	)	17.53
RSUs forfeited	(156	)	14.27
Balance, December 31, 2014	2,825		$	13.65	1.7	$	33,955

The weighted average grant date fair value of RSUs was approximately $12.70 and $17.10 for the years ended December 31, 2014 and 2013, respectively. No RSUs were granted for the year ended December 31, 2012.

The aggregate fair value of RSUs vested as of the respective vesting dates, was approximately $4.2 million for the year ended December 31, 2014. No RSUs vested during the years ended December 31, 2013 and 2012.

Shares Available for Grant

The following table summarizes the stock activity and the total number of shares available for grant under the 2012 Plan as of December 31, 2014 (in thousands):



	Number of Shares
Balance, December 31, 2013	8,547
Additional shares reserved for issuance	4,035
Options granted	(1,585	)
Options forfeited	534
RSUs granted	(2,289	)
RSUs forfeited	156
Balance, December 31, 2014	9,398

Fair Value Disclosures

The Company measures compensation expense for all stock-based payment awards, including stock options and RSUs granted to employees and under the ESPP, based on the estimated fair values on the date of the grant. The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The fair value of each RSU granted represents the closing price of the Company’s common stock on the date of grant. The fair value of purchases under the Company’s ESPP is calculated based on the closing price of the Company’s stock on the date of grant and the value of put and call options estimated using the Black-Scholes option pricing model. Stock-based compensation is recognized on a straight-line basis over the requisite service period, net of estimated forfeitures. The forfeiture rate is based on an analysis of the Company’s actual historical forfeitures.

The Company accounts for stock options issued to non-employees based on the fair value of the awards determined using the Black-Scholes option pricing model. The fair value of stock options granted to non-employees is re-measured as the stock options vest, and the resulting change in fair value, if any, is recognized in the Company’s consolidated statement of operations during the period the related services are rendered.

The determination of the fair value of options using the Black-Scholes option pricing model is affected by the following assumptions:

Expected Term-The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was calculated as the average of the option vesting and contractual terms, based on the simplified method provided by the Securities and Exchange Commission’s Staff Accounting Bulletin No. 110. The simplified method is used due to the lack of historical exercise data. The expected term for the ESPP is based on the term of the purchase period.

Volatility-The Company determined the share price volatility factor based on historical volatility of its peer group due to the limited trading history of its common stock.

Risk-Free Interest Rate-The risk-free interest rate is based on the U.S. Treasury zero coupon issues with remaining terms similar to the expected term of the stock option grants.

Dividend Yield-The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future.

Employee Stock Options

The following table summarizes the weighted average assumptions relating to the Company’s stock options:



	Years Ended December 31,
	2014		2013		2012
Volatility	60.7	%	67.4	%	69.1	%
Expected term (years)	6.1		6.1		6.0
Risk-free interest rate	1.9	%	1.9	%	1.0	%
Dividend yield	—		—		—

Employee Stock Purchase Plan

The following table summarizes the weighted average assumptions relating to the Company’s ESPP:



	Years Ended December 31,
	2014		2013
Volatility	40.2	%	59.6	%
Expected term (years)	0.7		0.7
Risk-free interest rate	0.1	%	0.1	%
Dividend yield	—		—

Stock-based Compensation Expense

The following table summarizes the stock-based compensation expense recorded for stock awards issued to employees and non-employees (in thousands):



	Years Ended December 31,
	2014			2013			2012
Cost of revenue	$	1,092		$	818		$	243
Research and development	9,099			6,738			2,409
Sales and marketing	7,180			4,922			1,787
General and administrative	9,223			6,637			4,012
Total stock-based compensation	26,594			19,115			8,451
Tax benefit from stock-based compensation	(688		)	(1,535		)	(2,417		)
Total stock-based compensation, net of tax effect	$	25,906		$	17,580		$	6,034

At December 31, 2014, the total unrecognized stock-based compensation expense under the Company’s stock plans was $64.3 million, net of estimated forfeitures. The unamortized expense will be recognized over a weighted-average period of 2.2 years.

For the year ended December 31, 2013, the Company recognized $0.4 million in stock-based compensation related to the cash settlement of equity awards held by former YFind employees.