Stock-Based Compensation

In connection with its IPO, the Company implemented its 2014 Equity Incentive Plan, or the 2014 Plan, which governs equity awards made to employees and directors of the Company since the IPO. In connection with the acquisition of iSocket, the Company assumed the iSocket 2009 Equity Incentive Plan, or the iSocket Plan, which governs stock options issued to former iSocket employees and assumed by the Company. In November 2014, the Company approved the 2014 Inducement Grant Equity Incentive Plan, or the Inducement Plan, which governs certain equity awards made to certain employees in connection with commencement of employment. In connection with the acquisition of Chango, the Company assumed Chango's 2009 Stock Option Plan, or the Chango plan, which governs stock options issued to former Chango employees and assumed by the Company. All compensatory equity awards outstanding at December 31, 2015 were issued pursuant to the 2014 Plan, the iSocket Plan, the Chango Plan, the Inducement Plan, or the 2007 Stock Incentive Plan, or the 2007 Plan, which governs equity awards made to employees and contractors of the Company prior to the IPO. The Company’s board of directors administers all of these plans. Options outstanding vest based upon continued service at varying rates, but generally over four years from issuance with 25% vesting after one year of service and the remainder vesting monthly thereafter. Restricted stock and restricted stock units vest at varying rates. Options, restricted stock, and restricted stock units granted under the plans accelerate under certain circumstances on a change in control, as defined therein. No further awards were made under the iSocket Plan, the Chango Plan, or the 2007 Plan; available shares under the iSocket Plan and the Chango Plan were rolled into the available share pool under the 2014 Plan at the time of acquisition of each company, and available shares under the 2007 Plan were rolled into the available share pool under the 2014 Plan at the time of the IPO. An aggregate of 1,408,750 shares remained available for issuance at December 31, 2015 under the 2014 Plan and the Inducement Plan. The 2014 Plan has an evergreen provision pursuant to which the share reserve will automatically increase on January 1^st of each year in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31^st of the preceding calendar year, although the Company’s board of directors may provide for a lesser increase, or no increase, in any year. The Inducement Plan has a provision pursuant to which the share reserve may be increased at the discretion of the Company's board of directors.

Stock Options

A summary of stock option activity for the year ended December 31, 2015 is as follows:



	Shares Under Option		Weighted- Average Exercise Price		Weighted- Average Contractual Life	Aggregate Intrinsic Value
	(in thousands)					(in thousands)
Outstanding at December 31, 2014	8,113		$	8.05
Granted	874		$	16.59
Options assumed in acquisitions	428		$	4.43
Exercised	(2,562	)	$	5.35
Canceled	(650	)	$	11.56
Outstanding at December 31, 2015	6,203		$	9.76	7.40 years	$	41,871
Vested and expected to vest at December 31, 2015	6,126		$	9.71	7.38 years	$	41,635
Exercisable at December 31, 2015	3,502		$	7.77	6.75 years	$	30,393

The total intrinsic value of options exercised during the years ended December 31, 2015, 2014, and 2013 were $28.3 million, $18.5 million, and $4.6 million, respectively.

At December 31, 2015, the Company had unrecognized employee stock-based compensation expense relating to stock options of approximately $14.8 million, which is expected to be recognized over a weighted-average period of 2.1 years.

The weighted-average grant date per share fair value of stock options granted for the years ended December 31, 2015, 2014, and 2013 were $9.25, $7.41, and $5.12, respectively.

The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The weighted-average input assumptions used by the Company were as follows:



	Year Ended
	December 31, 2015		December 31, 2014		December 31, 2013
Expected term (in years)	4.5		5.7		6.0
Risk-free interest rate	1.30	%	1.75	%	1.28	%
Expected volatility	47	%	51	%	58	%
Dividend yield	—	%	—	%	—	%

At December 31, 2015 and 2014, there were options to purchase 45,375 and 346,986 shares of common stock outstanding, respectively, awarded to non-employees at a weighted-average exercise price of $2.79 and $4.42 per share, respectively. These awards generally vest over four years and expire through 2024. The Company recorded stock-based compensation of $0.4 million for the year ended December 31, 2015, $0.8 million for the year ended December 31, 2014 and $0.1 million for the year ended 2013, relating to these awards.

During the years ended December 31, 2015, 2014, and 2013, the Company modified the terms of existing stock options granted to certain employees and non-employees, to among other things, extend the exercise period and/or accelerate the vesting of options upon termination of employment. In connection with these modifications, the Company recorded stock-based compensation of $0.1 million, $0.2 million and $0.6 million, in the years ended December 31, 2015, 2014, and 2013, respectively.

Restricted Stock

A summary of restricted stock activity for the year ended December 31, 2015 is as follows:



	Number of Shares
	(in thousands)
Nonvested shares of restricted stock outstanding at December 31, 2014	1,750
Granted	552
Canceled	(73	)
Vested	(750	)
Nonvested shares subject to restricted stock outstanding at December 31, 2015	1,479

At December 31, 2015, the Company had unrecognized employee stock-based compensation expense for restricted stock with service conditions of approximately $12.0 million, which is expected to be recognized over a weighted-average period of 2.6 years. At December 31, 2015, the Company had unrecognized employee stock-based compensation expense for restricted stock with market conditions granted in a prior year of approximately $1.2 million, which is expected to be recognized over a weighted-average period of 5.4 years.

The weighted-average grant date per share fair value of restricted stock with service conditions granted for the years ended December 31, 2015 and 2014 was $16.75 and $16.22, respectively.

In May 2015, the Company granted certain executives shares of restricted stock that vest based on certain stock price performance metrics. The grant date fair value per share of restricted stock was $13.81, which was estimated using a Monte-Carlo lattice model. At December 31, 2015, the Company had unrecognized employee stock-based compensation expense of approximately $3.1 million, which is expected to be recognized over a weighted-average period of 2.3 years. The compensation expense will not be reversed if the performance metrics are not met.

At December 31, 2015, there were 12,500 shares of restricted stock outstanding for non-employees. The Company recorded stock-based compensation of $0.6 million for the year ended December 31, 2015 relating to these awards.

Restricted Stock Units

A summary of restricted stock unit activity for the year ended December 31, 2015 is as follows:



	Number of Shares
	(in thousands)
Nonvested shares of restricted stock units outstanding at December 31, 2014	845
Granted	2,356
Canceled	(325	)
Vested	(229	)
Nonvested shares subject to restricted stock units outstanding at December 31, 2015	2,647

At December 31, 2015, the Company had unrecognized employee stock-based compensation expense relating to restricted stock units of approximately $33.3 million, which is expected to be recognized over a weighted-average period of 3.3 years.

The weighted-average grant date fair value per share of restricted stock units granted for the years ended December 31, 2015 and 2014 was $16.45 and $13.22, respectively.

Employee Stock Purchase Plan

In November 2013, the Company's board of directors adopted the Company's 2014 Employee Stock Purchase Plan, or ESPP. The ESPP is designed to enable eligible employees to periodically purchase shares of the Company's common stock at a discount through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. At the end of each six month offering period, employees are able to purchase shares at a price per share equal to 85% of the lower of the fair market value of the Company's common stock on the first trading day of the offering period or on the last trading day of the offering period. Offering periods generally commence and end in May and November of each year.

As of December 31, 2015, the Company has reserved 727,565 shares of its common stock for issuance under the ESPP and shares reserved for issuance will increase on January 1^st of each year by the lesser of (i) a number of shares equal to 1% of the total number of outstanding shares of common stock on the December 31^st immediately prior to the date of increase or (ii) such number of shares as may be determined by the board of directors. In 2015, a total of 169,362 shares of common stock were purchased under the ESPP. The Company estimated the total grant date fair value of the ESPP awards for the offering period ending in May 2016 of $0.5 million using a Black-Scholes model with the following assumptions: term of six months corresponding with the offering period; volatility of 48% based on the Company's historical volatility for a six-month period; no dividend yield; and risk-free interest rate of 0.33%. Compensation costs are recognized on a straight-line basis over the offering period.

Stock-Based Compensation Expense

Total stock-based compensation expense recorded in the consolidated statements of operations was as follows:



	Year Ended
	December 31, 2015		December 31, 2014		December 31, 2013

	(in thousands)
Cost of revenue	$	240	$	166	$	87
Sales and marketing	7,415		3,217		1,105
Technology and development	4,963		2,228		1,645
General and administrative	17,966		18,235		3,515
Total stock-based compensation expense	$	30,584	$	23,846	$	6,352