Stock-Based Compensation

3 Months Ended

Mar. 31, 2013

Stock-Based Compensation

Stock-Based Compensation

4. Stock-Based Compensation

There were options outstanding to purchase an aggregate of 4,818,736 shares of common stock as of March 31, 2013 under the Company’s 2006 Equity Incentive Plan, as amended. In March 2012, the Company established the 2012 Equity Incentive Plan (the “2012 Plan”) pursuant to which the Company has reserved an additional 6,258,951 shares of its common stock for issuance to its employees, directors, and non-employee third parties. As of March 31, 2013, options to purchase 1,057,750 shares of common stock and 382,004 restricted stock units (“RSUs”) were outstanding under the 2012 Plan. Each RSU represents the contingent right to receive one share of common stock. Upon adoption of the 2012 Plan, no additional awards under the 2006 Equity Incentive Plan are available to be issued. As of March 31, 2013, 4,819,197 shares are available for future grant under the 2012 Plan.

Stock compensation expense recognized by the Company for the three months ended March 31, 2013 and 2012 is as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Stock option awards	$	490	$	713
Restricted stock awards	803		371
Restricted stock unit awards	364		—
Total recognized stock-based compensation expense	$	1,657	$	1,084

Stock Option Awards

The following summarizes the assumptions used for estimating the fair value of stock options granted to employees for the three months ended March 31, 2013 and 2012:

	Three Months Ended
	March 31,
	2013	2012
Risk-free interest rate	1.0% - 1.1%	1.1% - 1.3%
Expected life	6.0 years	5.7 — 6.1 years
Expected volatility	55%	53% - 54%
Dividend yield	0%	0%
Weighted-average grant date fair value	$4.74	$5.06

The following table summarizes by grant date the stock options granted from January 1, 2013 through March 31, 2013, as well as the associated per share exercise price, which was equal to the fair value of the Company’s common stock at the grant date.

Grant Date	Number of Shares Underlying Options Granted	Exercise Price per Share
January 31, 2013	19,000	$	11.54
February 26, 2013	510,500	9.11

The following is a summary of option activity for the three months ended March 31, 2013:

	Number		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(in thousands)
Options outstanding at January 1, 2013	5,600,021		$	2.55
Granted	529,500		9.20
Exercised	(216,034	)	0.93
Forfeited	(37,001	)	7.29
Options outstanding at March 31, 2013	5,876,486		$	3.18	6.99	$	19,205
Options exercisable at March 31, 2013	3,627,772		$	1.12	5.92	19,205
Options vested and expected to vest at March 31, 2013	5,834,444		$	3.14	6.98	23,546

The total compensation cost related to unvested awards not yet recognized as of March 31, 2013 totaled $6.7 million and will be recognized over a weighted-average period of approximately 3.2 years.

The aggregate intrinsic value of all options exercised during the three-month periods ended March 31, 2013 and 2012 was $2.0 million and $856,000, respectively. The total fair value of shares which vested during the three-month periods ended March 31, 2013 and 2012 was $606,000 and $420,000, respectively.

Restricted Common Stock

In connection with the acquisition of Condaptive, Inc. on May 6, 2011, the Company issued 1,448,080 shares of restricted common stock to the employee shareholders of Condaptive. Under the terms of the stock restriction agreements, a portion of the shares of common stock issued was released from restriction on May 6, 2012, the first anniversary of the issuance. Thereafter, shares of common stock will be released from restriction on a monthly basis over a period that expires between May 2013 and December 2014, depending on the individual award, so long as the shareholder remains an employee of the Company as of the date of each such release, until all of the common stock is released from restriction. If the shareholder’s employment terminates prior to the release of all shares from restriction, the shares not yet vested are subject to repurchase by the Company at the lower of $0.001 or the share’s then fair market value. As of March 31, 2013, a total of 1,094,701 shares had been released from restriction.

Stock-based compensation expense related to the restricted common stock is being recognized ratably over the restriction period based on the fair value of the individual awards. At March 31, 2013, unrecognized compensation expense relating to the restricted stock awards was $734,000 and the aggregate intrinsic value of the unvested restricted stock was $2.2 million. The unrecognized compensation expense will be amortized for the remaining vesting period based on the vesting schedules of the awards.

Restricted Stock Units (RSUs)

The following is a summary of RSU activity for the three months ended March 31, 2013:

	Number		Weighted-Average Grant Date Fair Value
RSUs outstanding at January 1, 2013	444,549		$	12.71
Granted	20,000		11.54
Vested	(82,545	)	13.48
Forfeited	—		—
RSUs outstanding at March 31, 2013	382,004		$	12.48

At March 31, 2013, unrecognized compensation expense related to the RSUs was $4.5 million. The unrecognized compensation expense will be amortized on a straight-line basis through August 2016.