Stock Plans (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Option and Performance-Based Restricted Share Unit Activity Under Incapsula Plan

The following table summarizes option activity under the Incapsula Plan and related information for the nine months ended September 30, 2014:

	Shares Available for Grant			Number of Performance- based Restricted Share Units Outstanding			Number of Stock Options Outstanding			Weighted Average Exercise Price
Outstanding - January 1, 2014		89,687			7,095,461			1,806,500		$	0.47
Granted		(95,000	)		—			95,000			1.25
Exercised		0			—			—			—
Forfeited		15,213			(12,713	)		(2,500	)		1.25
Transferred to Imperva 2011 stock option plan		(9,900	)		(7,082,748	)		(1,899,000	)		0.16
Outstanding - September 30, 2014		—			—			—		$	—

Stock-Based Compensation Expense

The Company recognized stock-based compensation expense under the 2011 Stock Option and Incentive Plan, 2003 Stock Plan, 2011 Employee Stock Purchase Plan, the Incapsula 2010 Share Incentive Plan, and the Skyfence 2013 Share Incentive Plan (collectively “the Plans”) in the condensed consolidated statements of operations as follows (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,
	2014		2013		2014		2013
Cost of revenues	$	569	$	254	$	1,472	$	722
Research and development		2,353		747		6,335		2,133
Sales and marketing		3,730		1,620		9,369		4,596
General and administrative		4,123		792		8,930		2,407
Total stock-based compensation expense	$	10,775	$	3,413	$	26,106	$	9,858

Weighted Average Assumptions for Fair Value of Stock Options Grants

The fair value of stock option grants for the three months and nine months ended September 30, 2014 and 2013 was estimated using the following weighted average assumptions:

	For the three months ended September 30,						For the nine months ended September 30,
	2014			2013			2014			2013
Stock option grants:
Dividend rate		0	%		0	%		0	%		0	%
Risk-free interest rate		2.0	%		1.8	%		1.9	%		1.2	%
Expected term (in years)		6.1			6.1			6.1			6.1
Expected volatility		51	%		47	%		45	%		46	%
ESPP grants:
Dividend rate		—			—			0	%		0	%
Risk-free interest rate		—			—			0.1	%		0.1	%
Expected term (in years)		—			—			0.5			0.5
Expected volatility		—			—			57	%		31	%

Summary of Option Activity under Plans and Related Information

The following table summarizes option activity under the Plans and related information:

	Options Outstanding					Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
	Number of Shares			Weighted Average Exercise Price
Balances - January 1, 2014		1,675,506		$	23.78		8.01	$	40,813
Granted		1,076,327			42.37
Exercised or released		(311,650	)		10.60
Cancelled or forfeited		(213,947	)		34.81
Options assumed in acquisitions		72,607			14.14
Balances - September 30, 2014		2,298,843		$	32.89		8.27	$	11,299
Options exercisable		672,910		$	21.19		6.75	$	6,887

Summary of RSU Activity Outstanding and Weighted Average Grant Date Fair Value

A summary of RSU activity under the Plans for the nine months ended September 30, 2014, is as follows:

	Number of Restricted Stock Units Outstanding			Weighted- Average Grant Date Fair Value
Unvested - January 1, 2014		1,044,651		$	31.64
Granted		1,186,560			42.58
Granted, performance RSUs		96,446			32.07
Released		(187,595	)		34.73
Cancelled or expired		(197,992	)		39.38
RSUs assumed in acquisitions		204,466			61.40
Unvested - September 30, 2014		2,146,536		$	39.56