Stock-Based Compensation and Employee Benefit Plans

Equity incentives are currently issued to employees and directors in the form of stock options and RSUs under our 2014 Equity Incentive Plan. Our 2007 Stock Option Plan was terminated in connection with our Initial Public Offering (IPO). Accordingly, no additional equity incentives are issuable under this plan although it continues to govern outstanding awards granted thereunder. Additionally, we offer an Employee Stock Purchase Plan through the 2014 Employee Stock Purchase Plan and a 401(k) plan to employees.

Options

The following table summarizes the assumptions used for estimating the fair value of stock options granted under our equity plans for the years ended December 31:



	2018	2017	2016
Risk-free interest rate	2.82% - 3.13 %	2.32% - 2.42 %	1.40% - 2.54 %
Expected term (years)	5.3	5	5.0 - 6.0
Expected volatility	35% - 37%	42% - 44%	46% - 54%
Dividend yield	—%	—%	—%
Weighted-average grant date fair value per share	$2.12	$1.66	$2.65

The following is a summary of option activity for the year ended December 31, 2018:



	Number of Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2018	7,918,853		$	5.75	—	—
Granted	1,171,180		$	5.69	—	—
Exercised	(559,664	)	$	0.96	—	—
Forfeited	(375,187	)	$	7.37	—	—
Expired	(222,400	)	$	10.80	—	—
Outstanding at December 31, 2018	7,932,782		$	5.86	5.4	$	16,097
Exercisable at December 31, 2018	6,418,213		$	5.82	4.7	$	15,467
Vested or expected to vest as of December 31, 2018	7,847,599		$	5.86	5.4	$	16,057

Total compensation cost related to nonvested option awards not yet recognized as of December 31, 2018 was $2.8 million and will be recognized over a weighted-average period of approximately 2.2 years. The aggregate intrinsic value of employee options exercised during the years ended December 31, 2018, 2017 and 2016 was $3.1 million, $5.3 million and $3.0 million, respectively.

Restricted Stock Units

The following table summarizes our activities of RSUs and PRSUs during the year ended December 31, 2018:



	Number of RSUs		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2018	3,342,640		$	6.18
RSUs and PRSUs granted	1,671,806		$	6.02
RSUs and PRSUs vested	(1,012,569	)	$	6.58
RSUs and PRSUs forfeited/expired	(694,316	)	$	6.06
Unvested at December 31, 2018	3,307,561		$	6.00
Expected to vest after December 31, 2018	2,666,471		$	6.03

During the year ended December 31, 2016, in addition to granting RSUs, we also granted 194,207 PRSUs. For each of the three annual performance periods, one-third (1/3) of the total PRSUs may vest depending upon achievement of performance-based targets. Participants have the ability to earn up to 150% of the baseline award based on certain levels of achievement in excess of the relevant target performance level or could earn less than the baseline award, or nothing at all, based on certain levels of achievement below the relevant target performance level. Measurement of performance is based on a 12-month period ending June 30 of each year. The first tranche did not vest due to the performance-based targets not being achieved. The second tranche was granted with a grant date fair value of $4.67 during the year ended December 31, 2017. In October 2018, a total of 37,143 shares were awarded based on our performance metrics for the second tranche, which paid out 136% of the baseline award. Performance goals were established for the third tranche of the plan during the year ended December 31, 2018, and was granted with a grant date fair value of $6.71. The tranche has a performance period that lasts through June 2019.

During the year ended December 31, 2018 we granted a second, separate, performance plan. The new plan runs over three annual performance periods, also with one-third (1/3) of the total PRSUs vesting depending upon achievement of performance-based targets. In total 138,953 shares were granted, with a grant date fair value of $5.19 for the first tranche granted in 2018. Measurement of performance is based on a 12-month period ending December 31 of each year.

During the year ended December 31, 2018 we granted a third, separate, performance plan. The new plan runs over three performance periods. The first performance period runs from July 1, 2018 through December 31, 2018. The last two performance periods last one calendar year each. In total 60,684 shares were granted, with a grant date fair value of $5.35 for the first tranche granted in 2018.

As of December 31, 2018, there was $12 million of unrecognized compensation cost related to unvested RSUs and PRSUs, which is expected to be recognized over a weighted-average period of 2.6 years.

Employee Stock Purchase Plan

As of December 31, 2018, there was $0.2 million of unrecognized compensation expense related to the Employee Stock Purchase Plan ("ESPP").

The assumptions used to calculate our Black-Scholes-Merton Option Pricing Model for each stock purchase right granted under the ESPP were as follows for the year ended December 31:



	2018		2017		2016
Risk-free interest rate	2.10	%	1.17	%	0.39	%
Expected term (years)	0.50		0.50		0.50
Expected volatility	47	%	37	%	52	%
Dividend yield	—	%	—	%	—	%

Stock-based compensation expense related to stock options, RSUs, PRSUs and the ESPP are included in the following line items in our accompanying consolidated statements of operations for the year ended December 31 (in thousands):



	2018		2017		2016
Sales and marketing	$	2,012	$	2,429	$	4,002
Technology and analytics	2,647		2,300		3,422
Processing and servicing	385		483		869
General and administrative	6,775		7,303		7,622
Total	$	11,819	$	12,515	$	15,915

401(k) Plan

We maintain a 401(k) defined contribution plan that covers substantially all of our employees. Participants may elect to contribute their annual compensation up to the maximum limit imposed by federal tax law. During the years ended December 31, 2018, 2017 and 2016 we had $1.2 million, $1.2 million, and $1.4 million, respectively, in employer related match expense.