Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity [Abstract]

Stockholders' Equity

7. Stockholders' Equity

On February 23, 2012, the Company closed its IPO in which the Company sold and issued 5,750,000 shares of common stock, including 750,000 shares of common stock sold pursuant to the exercise of the underwriters' option to purchase additional shares, which were sold to the public at a price of $11.00 per share. The Company received aggregate proceeds of approximately $58.8 million from the IPO, including the exercise of the underwriters' overallotment option, net of underwriters' discounts and commissions, but before deducting offering expenses of approximately $4.3 million. Upon the closing of the IPO, all shares of the Company's outstanding redeemable convertible preferred stock automatically converted into 16,150,505 shares of common stock and all outstanding warrants to purchase redeemable convertible preferred stock automatically converted into warrants to purchase 46,713 shares of common stock at $3.21 per share.
 

Common Stock

Common stockholders are entitled to one vote per share. Holders of common stock are entitled to receive dividends, when and if declared by the Board.

Equity Incentive Plans 

At December 31, 2014, the Company had four stock-based compensation plans, the Amended and Restated 2004 Stock Option and Incentive Plan (the 2004 Plan), the 2012 Stock Incentive Plan (the 2012 Plan), the Brightcove Inc. 2012 RSU Inducement Plan (the RSU Plan), and the Brightcove Inc. 2014 Stock Option Inducement Plan (the 2014 Stock Inducement Plan). Additionally, during March 2009, Brightcove KK adopted the Brightcove KK Stock Option Plan (the Brightcove KK Plan). As discussed in Note 2, on January 8, 2013, in conjunction with the acquisition of the remaining 37% of Brightcove KK, the Brightcove KK Plan was terminated. The Brightcove KK Plan provided for the issuance of stock options to employees, officers, directors, and advisors of Brightcove KK and to employees of the Company. Stock options granted under the Brightcove KK Plan were not exchangeable for either options or shares of the Company. 

      The 2004 Plan provided for the issuance of incentive and non-qualified stock options, restricted stock, and other equity awards to the Company's employees, officers, directors, consultants and advisors, up to an aggregate of 7,397,843 shares of the Company's common stock. The Company also established a UK Sub-Plan of the 2004 Plan under which the Company was permitted to make grants of options to employees subject to tax in the United Kingdom. In conjunction with the effectiveness of the 2012 Plan, the Board voted that no further stock options or other equity-based awards may be granted under the 2004 Plan.

In 2012, the Board and stockholders adopted the 2012 Plan, which became effective on February 16, 2012. The 2012 Plan provides for the issuance of incentive and non-qualified stock options, restricted stock and other stock-based awards to the Company's officers, employees, non-employee directors and certain other key persons of the Company as are selected by the Board or the compensation committee thereof. In connection with the approval of the 2012 Plan, the Company reserved 1,700,000 shares of common stock for issuance under the 2012 Plan, and 124,703 shares were transferred from the 2004 Plan. The number of shares reserved and available for issuance under the 2012 Plan automatically increases each January 1, beginning in 2013, by 4% of the outstanding number of shares of the Company's common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company's compensation committee subject to an overall overhang limit of 30%. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company's capitalization. At December 31, 2014, 1,215,170 shares were available for issuance under all stock-based compensation plans.

In 2012, the Company adopted the RSU Plan and made awards of restricted stock units pursuant to the RSU Plan to 15 new employees in connection with the acquisition of Zencoder. The awards of restricted stock units cover an aggregate of 77,100 shares of the Company's common stock and were made as a material inducement to the employees entering into employment with the Company in connection with the acquisition of Zencoder. The restricted stock units will be settled in shares of the Company's common stock upon vesting.

In 2014, the Company adopted the 2014 Stock Inducement Plan and made awards of options pursuant to the 2014 Stock Inducement Plan to 61 new employees in connection with the Purchase Agreement. The awards of options cover an aggregate of 578,350 shares of the Company's common stock in the form of options to purchase shares of the Company's common stock as an inducement to the employees entering into employment with the Company in connection with the Purchase Agreement.

The following is a summary of the stock option activity for all stock options plans (excluding the Brightcove KK Plan) during the year ended December 31, 2014:

	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value(2)
Outstanding at December 31, 2013		3,060,583	$	6.76
Granted		2,080,148	$	8.07
Exercised		(210,735)	$	2.84			$	1,499
Canceled		(852,922)	$	9.67
Outstanding at December 31, 2014		4,077,074	$	7.02		6.98	$	8,259
Exercisable at December 31, 2014		2,001,911	$	5.50		5.14	$	6,630
Vested and expected to vest at December 31, 2014(1)		3,518,464	$	6.85		6.68	$	7,745

(1) This represents the number of vested options as of December 31, 2014 plus the number of unvested options expected to vest as of December 31, 2014, based on the unvested options outstanding at December 31, 2014 and adjusted for the estimated forfeiture rate.

(2) The aggregate intrinsic value was calculated based on the positive difference between the estimated fair value of the Company's common stock on December 31, 2014 of $7.78 per share, or the date of exercise, as appropriate, and the exercise price of the underlying options.

The aggregate intrinsic value for options exercised during the years ended December 31, 2013 and 2012 was $7,104 and $8,594, respectively.

The Company has entered into restricted stock unit (RSU) agreements with certain of its employees pursuant to the 2012 Plan and the RSU Plan. Vesting occurs periodically at specified time intervals, ranging from three months to four years, and in specified percentages. Upon vesting, the holder will receive one share of the Company's common stock for each unit vested.

The following table summarizes the RSU activity during the year ended December 31, 2014:

	Shares			Weighted Average Grant Date Fair Value
Unvested by December 31, 2013	1,177,716		$	10.26
Granted	346,000			6.05
Vested and issued	(328,353	)		8.01
Canceled	(279,905	)		9.89
Unvested by December 31, 2014	915,458		$	8.61

During the year ended December 31, 2010, the Company granted 156,292 shares of restricted common stock to an employee under the 2004 Plan. Under the terms of the agreement, the Company had a repurchase provision whereby the Company had the right to repurchase any unvested shares when/if the employee terminates, at a price equal to the original exercise price. Accordingly, the Company recorded the payment received for the purchase of the restricted shares as a liability at the time of purchase and subsequently, reclassified such amounts to additional paid-in capital upon vesting of the award. During the years ended December 31, 2013 and 2012, the Company reclassified $8 and $101, respectively, of this amount to additional-paid-in-capital upon vesting of a portion of this award. The award was fully vested as of December 31, 2014. The Company did not grant any shares of restricted common stock during the years ended December 31, 2014 or 2013.

Warrants 

In September 2006, the Company issued fully vested warrants to purchase an aggregate of 46,713 shares of Series B Preferred Stock, at a purchase price of $3.21 per share, to two lenders in connection with a line of credit agreement. The warrants are exercisable at any time up until the expiration date of August 31, 2016. The fair value of the warrants was recorded as a discount on the related debt, and was amortized to interest expense over the life of the debt. The debt was fully repaid in March 2007. The warrant liability was reported at fair value until completion of the Company's IPO in February 2012, whereupon the warrants automatically converted into warrants to purchase shares of the Company's common stock. At the time of conversion of the warrants in connection with the Company's IPO, the fair value of the warrants was $395, which was reclassified as a component of additional paid-in capital.

During 2012, 18,685 shares exercisable under the warrants were exercised pursuant to a net exercise provision, which resulted in the issuance of 15,781 common shares. There have been no additional exercises through December 31, 2014. For the year ended December 31, 2012, the Company recorded other expense of $28 in the accompanying consolidated statements of operations, related to the increase in the fair value of the warrants, which was determined utilizing the Black-Scholes option-pricing model.

Common Stock Reserved for Future Issuance

At December 31, 2014, the Company has reserved the following shares of common stock for future issuance:

	December 31, 2014
Common stock options outstanding		4,077,074
Restricted stock unit awards outstanding		915,458
Shares available for issuance under all stock-based compensation plans		1,215,170
Common Stock warrants		28,028
Total shares of authorized common stock reserved for future issuance		6,235,730