Capital Stock (Tables)

12 Months Ended

Dec. 31, 2014

The Company had reserved shares of common stock, on an as if converted basis, for issuance as follows:


	As of December 31,
	2014		2013
Issuance in connection with outstanding stock options		2,244,363		1,675,506
Issuance in connection with restricted stock units outstanding		2,279,081		1,044,651
Reserved for future stock option and restricted stock unit grants		1,166,742		1,847,752
Reserved for future issuance under the employee stock purchase plan		895,268		831,271

		6,585,454		5,399,180

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 Term (in years)		Aggregate Intrinsic Value (in thousands) (1)
	Number of Shares			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands) (1)
Outstanding—December 31, 2011		2,871,005		$	4.15		7.86	$	88,012
Granted		698,240		$	31.80
Exercised or released		(1,272,941	)	$	2.41
Cancelled or forfeited		(307,067	)	$	9.98

Outstanding—December 31, 2012		1,989,237		$	14.08		8.09	$	35,513
Granted		631,775		$	36.55
Exercised or released		(687,719	)	$	6.94
Cancelled or forfeited		(257,787	)	$	25.11

Balances—December 31, 2013		1,675,506		$	23.78		8.01	$	40,813
Granted		1,256,559		$	41.39
Options assumed in acquisitions		72,607		$	13.30
Exercised or released		(496,297	)	$	14.85
Cancelled or forfeited		(264,012	)	$	35.85

Balances—December 31, 2014		2,244,363		$	33.83		8.27	$	38,457

Vested and expected to vest— December 31, 2014		2,006,285		$	33.07		8.20	$	35,688

Exercisable—December 31, 2014		590,308		$	21.66		6.56	$	16,425

(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $49.43 of the Company’s common stock on December 31, 2014

Additional Information Regarding Company's Stock Options Outstanding and Exercisable

Additional information regarding the Company’s stock options outstanding and exercisable as of December 31, 2014 is summarized below:


	Options Outstanding						Options Exercisable
Exercise Prices	Number of Stock Options Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price per Share		Shares Subject to Stock Options		Weighted Average Exercise Price per Share
$0.02 to $10.70		300,189		5.48	$	5.35		248,116	$	5.06
$10.71 to $29.10		398,274		8.54	$	24.96		72,112	$	26.78
$29.11 to $32.54		332,275		9.37	$	29.58		15,128	$	31.43
$32.55 to $34.55		453,985		8.03	$	33.80		174,008	$	33.77
$34.56 to $54.48		258,030		8.44	$	43.12		78,060	$	39.42
$54.49 to $65.00		501,610		9.10	$	55.99		2,884	$	60.06

		2,244,363		8.27	$	33.83		590,308	$	21.66

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

A summary of RSU activity for the year ended December 31, 2014, is as follows:


	Number of Restricted Stock Units Outstanding			Weighted- Average Grant Date Fair Value
Unvested—December 31, 2012		446,915		$	31
Granted		577,528		$	36.94
Granted, performance RSUs		264,878		$	20.76
Released		(149,531	)	$	30.64
Cancelled or expired		(95,139	)	$	34.30

Unvested—December 31, 2013		1,044,651		$	31.64
Granted		1,368,761		$	41.66
Granted, performance RSUs		131,143		$	31.42
PRSUs assumed in acquisitions		198,825		$	61.14
Released		(238,446	)	$	34.84
Cancelled or expired		(225,853	)	$	39.83

Unvested—December 31, 2014		2,279,081		$	39.07

Stock-Based Compensation Expense

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


	Years Ended December 31,
	2014		2013		2012
Cost of revenue	$	2,058	$	1,440	$	469
Research and development		8,799		3,660		1,227
Sales and marketing		13,558		8,537		2,543
General and administrative		12,858		8,857		1,729

Total stock-based compensation expense	$	37,273	$	22,494	$	5,968

Weighted Average Assumptions for Fair Value of Stock Options Granted to Employees

A summary of the weighted-average assumptions is as follows:


	Years Ended December 31
	2014			2013			2012
Stock option grants:
Dividend rate		0	%		0	%		0	%
Risk-free interest rate		1.8	%		1.2	%		1.0	%
Expected term (in years)		6.1			6.1			6.0
Expected volatility		46	%		46	%		48	%

ESPP grants:
Dividend rate		0	%		0	%		0	%
Risk-free interest rate		0.1	%		0.1	%		0.1	%
Expected term (in years)		0.5			0.5			0.5
Expected volatility		45	%		27	%		39	%

Incapsula Plan [Member]

Summary of Option Activity under Plans and Related Information

The following table summarizes option activity under the Incapsula Plan and related:


	Shares Available for Grant			Number of Performance- based Restricted Stock Units Outstanding			Number of Stock Options Outstanding			Weighted Average Exercise Price of Stock Options Outstanding
Outstanding—December 31, 2011		2,921,833			—			1,774,000		$	0.08
Granted		(232,500	)		—			232,500		$	0.25
Exercised		—			—			(105,625	)	$	0.15
Forfeited		64,375			—			(64,375	)	$	0.18

Outstanding—December 31, 2012		2,753,708			—			1,836,500		$	0.10
Additional shares authorized		5,529,878			—			—		$	—
Granted, performance RSUs		(7,095,461	)		7,095,461			—		$	—
Granted, stock options		(1,240,000	)		—			1,240,000		$	0.58
Exercised/Released		—			—			(1,128,438	)	$	0.02
Forfeited		141,562			—			(141,562	)	$	0.22

Outstanding—December 31, 2013		89,687			7,095,461			1,806,500		$	0.47
Granted		(95,000	)		—			95,000		$	1.25
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—December 31, 2014		—			—			—		$	—