Stockholders’ Equity and Employee Stock Plans (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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
	Number of Shares			Weighted Average Exercise Price		Contractual Term (in years)		Aggregate Intrinsic Value (in thousands) (1)
Balances - January 1, 2018		997,674		$	41.87		5.72	$	5,689
Exercised		(205,563	)	$	31.88
Cancelled or forfeited		(154,028	)	$	52.14
Balances - June 30, 2018		638,083		$	42.62		5.36	$	6,284
Vested and expected to vest - June 30, 2018		638,083		$	42.62		5.18	$	6,284
Exercisable - June 30, 2018		573,632		$	41.58		5.18	$	6,068

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $48.25 of the Company’s common stock on June 30, 2018.

The aggregate intrinsic value of options exercised under the Plans was $3.1 million for the six months ended June 30, 2018. The aggregate intrinsic value is calculated as the difference between the fair market value of the Company’s common stock on the date of the exercise and the exercise price of each option multiplied by the number of options exercised.

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

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

	Number of Restricted Stock Units Outstanding			Weighted- Average Grant Date Fair Value
Unvested - January 1, 2018		2,353,315		$	47.42
Granted		983,345		$	44.30
Granted, performance RSUs		438,980		$	44.48
Released		(417,779	)	$	42.44
Cancelled or forfeited		(646,181	)	$	43.90
Unvested - June 30, 2018		2,711,680		$	47.70

Stock-Based Compensation Expense

The Company recognized stock-based compensation expense under the 2003 Plan, 2011 Plan, ESPP, Inducement Option and RSU Plans, the Incapsula 2010 Share Incentive Plan and the 2015 Plan in the condensed consolidated statements of operations as follows (in thousands):

	For the three months ended June 30				For the six months ended June 30
	2018		2017		2018		2017
Cost of revenue	$	1,396	$	1,403	$	2,715	$	2,672
Research and development		2,501		2,560		4,946		7,328
Sales and marketing		3,731		3,700		7,046		7,166
General and administrative		3,686		3,844		11,243		7,276
Restructuring charges		-		-		-		675
Total stock-based compensation expense	$	11,314	$	11,507	$	25,950	$	25,117

Weighted Average Assumptions for Fair Value of Stock Options Grants and ESPP Grants

The fair value of ESPP grants for the three and six months ended June 30, 2018 and 2017 was estimated using the following weighted average assumptions:

	For the three months ended June 30						For the six months ended June 30
	2018			2017			2018			2017
ESPP grants:
Dividend rate		0	%		0	%		0	%		0	%
Risk-free interest rate		2.1	%		1.1	%		2.1	%		1.1	%
Expected term (in years)		0.50			0.50			0.50			0.50
Expected Volatility		37	%		52	%		37	%		52	%