Note 5. Equity Incentive Plans

2016 Equity Incentive Plan

The Company’s 2016 Equity Incentive Plan, or the 2016 Plan, became effective on September 21, 2016. The 2016 Plan provides for the grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees or any of the Company’s subsidiaries’ employees, and for the grant of nonstatutory stock options, or NSOs, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to employees, directors and consultants of the Company and the Company’s subsidiaries’ employees and consultants. As of June 30, 2017, the total number of shares available for issuance under the 2016 Plan was 4,577,709. These available shares will automatically increase each January 1, beginning on January 1, 2017, by the lesser of 5,500,000 shares of Class A common stock, by 5% of the outstanding shares of all classes of the Company’s common stock as of the last day of the Company’s immediately preceding fiscal year, or such other amount as the Company’s board of directors may determine on or before the last day of the Company’s immediately preceding fiscal year.

2016 Employee Stock Purchase Plan

The Company’s Employee Stock Purchase Plan, or 2016 ESPP, became effective on September 21, 2016. As of June 30, 2017, the total number of shares of Class A common stock available for issuance under the 2016 ESPP was 967,818. These available shares will automatically increase each January 1, beginning on January 1, 2017, by the lesser of 1,600,000 shares of Class A common stock, 1% of the number of shares of all classes of the Company’s common stock outstanding on the immediately preceding fiscal year, or such lesser number of shares as determined by the Company’s board of directors.

The 2016 ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. Except for the initial offering period, the 2016 ESPP provides for separate six-month offering periods beginning November 30 and May 31 of each fiscal year. The initial offering period ran from September 23, 2016 through May 31, 2017. The initial offering period included the employee enrollment period, which ran from September 23, 2016 to November 10, 2016, at which time employee deductions commenced.

On each purchase date, eligible employees will purchase the Company’s Class A common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, which for the initial offering period is the initial price to public in the IPO, and (2) the fair market value of the Company’s common stock on the purchase date.

During the three and six months ended June 30, 2017, 165,559 shares of Class A common stock were purchased under the 2016 ESPP.

Stock Options

Stock option activity during the six months ended June 30, 2017 was as follows (in thousands, except per share and contractual life data):

						Weighted-
				Weighted-		Average
				Average		Remaining		Total
	Options			Exercise Price		Contractual		Intrinsic
	Outstanding			per Share		Life (years)		Value
Outstanding at December 31, 2016		11,203		$	9.49
Options granted		291			14.08
Options exercised		(1,402	)		3.95
Options forfeited or canceled		(616	)		13.86
Outstanding at June 30, 2017		9,476		$	10.16		6.72	$	68,169
Vested and expected to vest at June 30, 2017		9,393		$	10.12		6.66	$	67,963
Exercisable at June 30, 2017		6,061		$	8.01		5.64	$	56,624

As of June 30, 2017, there was a total of $19.5 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock-based compensation arrangements associated with options granted. That cost is expected to be recognized over a weighted-average remaining expected term of 2.5 years.

RSUs

RSU activity under the 2016 Plan during the six months ended June 30, 2017 was as follows (in thousands, except per share data):

				Weighted-Average
	RSUs			Grant Date Fair Value
	Outstanding			per Share
Non-Vested outstanding at December 31, 2016		628		$	16.43
Granted		1,237			14.04
Vested		—			—
Forfeited or canceled		(95	)		15.61
Non-Vested outstanding at June 30, 2017		1,770		$	14.80

As of June 30, 2017, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was approximately $24.2 million and the weighted-average remaining vesting period was 3.7 years.

Stock-based compensation expense recognized in the Company’s statement of comprehensive loss was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Cost of revenue
Subscription	$	240	$	191		597	$	332
Professional services		230		213		548		367
Operating expenses
Research and development		1,112		714		2,153		1,267
Sales and marketing		1,077		806		2,077		1,441
General and administrative		1,026		586		1,935		1,008

Total stock-based compensation	$	3,685	$	2,510	$	7,310	$	4,415