STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

On February 18, 2015, the date of the completion of the Company’s IPO, the Company’s 2015 Omnibus Incentive Plan (the “2015 Plan”) became effective. The 2015 Plan provided for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to the Company’s employees and any parent and subsidiary employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSAs, RSUs, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to the Company’s employees, directors, and consultants and to employees, directors, and consultants of certain affiliated entities. At the Company’s annual meeting of stockholders held on June 5, 2019, the Company’s stockholders, upon the recommendation of the Board of Directors of the Company (the “Board”), approved the Amended and Restated 2015 Omnibus Incentive Plan (the “Amended Plan”), which was previously adopted by the Board on February 14, 2019, subject to the approval by the stockholders. The Amended Plan (i) increased the maximum number of shares of the Company’s Class A common stock available for issuance by 6,000,000 shares to a total of 13,335,430; (ii) removed the provisions regarding Section 162(m) of the Code that are no longer relevant due to recent changes to the Code pursuant to the Tax Cuts and Jobs Act of 2017, which eliminated the “performance-based compensation” exception to the deduction limitation under Section 162(m) of the Code; and (iii) extended the term of the Amended Plan until the tenth anniversary of the date of Board approval of the Amended Plan.

Restricted Stock Units

During 2015, the Company began granting RSUs to employees pursuant to the 2015 Plan. These awards vest ratably over five years on each anniversary of the grant date. Upon vesting, the Company will deliver to the holder shares of the Company’s Class A common stock under the 2015 Plan. In 2017, the Company began issuing RSUs to non-employee directors. These awards fully vest upon the one-year anniversary of the award grant date, subject to continued service as a director through the vesting date. Upon vesting, the Company will deliver to the holder shares of the Company’s Class A common stock unless a deferral election has been made under certain circumstances. Pursuant to the terms of the awards, any unvested shares terminate upon the RSU holders’ separation from the Company. The Company recognizes stock-based compensation expense ratably over the requisite service period and records adjustments related to forfeitures as they occur.

A summary of RSU activity is as follows:


	Number of RSUs	Weighted Average Fair Value Per Unit
RSUs granted and unvested at January 1, 2020	136,176	$	14.21
RSUs granted during 2020	64,155	19.10
RSUs vested during 2020	(136,176)	14.95
RSUs forfeited during 2020	(9,165)	19.10
RSUs granted and unvested at December 31, 2020	54,990	$	19.10

The weighted-average fair value of RSUs granted during the years ended December 31, 2020, 2019, and 2018 was $19.10, $13.88, and $10.35, respectively. During the years ended December 31, 2020 and 2019, and 2018, these awards had an aggregate grant date fair value of $1.2 million, $1.3 million, and $1.1 million, respectively. The total fair value of RSUs vested during the years ended December 31, 2020, 2019 and 2018 was $1.6 million, $2.3 million, and $1.1 million, respectively. As of December 31, 2020, there was a total of $0.5 million in unrecognized compensation cost related to unvested RSUs, which are expected to be recognized over a weighted-average period of approximately 0.5 years.

Restricted Stock Awards

During 2015, the Company began granting RSAs pursuant to the 2015 Plan. RSAs granted to employees vest over two to five years either ratably on each anniversary of the grant date or cliff vest at the end of the vest period. Upon vesting, the Company will deliver shares of the Company’s Class A common stock to the holders. Pursuant to the terms of the awards, any unvested shares terminate upon the RSA holders’ separation from the Company. The Company recognizes stock-based compensation expense for the RSAs following the straight-line method over the requisite service period. The Company records adjustments related to forfeitures as they occur.

In March 2017, the Company began issuing RSAs with performance conditions under the 2015 Plan. The awards have vesting conditions tied to the achievement of specified performance conditions, which have target performance levels that span from three to five years. Upon the conclusion of the performance period, the performance level achieved will be measured and the ultimate number of shares that vest will be determined. Stock-based compensation expense for these awards is recorded either ratably over the vesting period or based on a graded vest method, depending on the specific terms of the award and the probability of achievement of the specified performance conditions.

During 2020, the Company granted 1.5 million RSAs, of which 0.6 million had performance vesting conditions. A summary of RSA activity is as follows:


	Number of RSAs	Weighted Average Fair Value Per Unit
RSAs granted and unvested at January 1, 2020	6,009,255	$	13.51
RSAs granted during 2020	1,480,723	21.91
RSAs vested during 2020	(1,530,660)	13.59
RSAs forfeited during 2020	(756,356)	13.11
RSAs granted and unvested at December 31, 2020	5,202,962	$	15.93

The weighted-average fair value of an RSA granted during the years ended December 31, 2020, 2019, and 2018 was $21.91, $14.96, and $11.12, respectively. During the years ended December 31, 2020, 2019, and 2018, these awards had an aggregate grant date fair value of $32.4 million, $40.1 million, and $28.6 million, respectively. The total fair value of RSAs vested during the years ended December 31, 2020, 2019, and 2018 was $25.3 million, $15.9 million, and $8.6 million, respectively. As of December 31, 2020, there was a total of $62.4 million in unrecognized compensation cost related to unvested RSAs, which are expected to be recognized over a weighted-average period of approximately 3.1 years.

Stock Options

The Company did not grant any options during the years ended December 31, 2020, 2019, and 2018. The Company uses the Black-Scholes option-pricing model to determine the estimated fair value for previously granted stock option awards. The Black-Scholes option-pricing model requires the use of estimates, including the fair market value of the Company’s common stock prior to the Company’s IPO, expected stock price volatility, expected term, estimated forfeitures and the risk-free interest rate. The fair value of stock option awards is amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.

Stock option activity is as follows:


	Number of Shares Outstanding	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Balance at January 1, 2020	303,275	$	7.63	4.4	$	3,393

Stock options exercised during 2020	(25,287)	$	7.82
Stock options canceled during 2020	(14,745)	$	7.89
Balance at December 31, 2020	263,243	$	7.60	3.4	$	2,782
Exercisable at December 31, 2020	263,243	$	7.60	3.4	$	2,782
Vested and expected to vest at December 31, 2020	263,243	$	7.60	3.4	$	2,782

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair value of the Company’s common stock and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options. This amount is subject to change based on changes

to the fair market value of the Company’s common stock. The total intrinsic value of options exercised during the years ended December 31, 2020, 2019, and 2018 was $0.3 million, $4.6 million, and $1.2 million, respectively.

Employee Stock Purchase Plan

On February 18, 2015, the date of the completion of the Company’s IPO, the 2015 Employee Stock Purchase Plan (“2015 ESPP”) became effective. The 2015 ESPP provides (i) for six month purchase periods (commencing each March 1 and September 1) and (ii) that the purchase price for shares of Class A common stock purchased under the 2015 ESPP will be 85% of the fair market value of the Company’s Class A common stock on the last day of the applicable offering period. Eligible employees are able to select a rate of payroll deduction between 1% and 15% of their base cash compensation subject to a maximum payroll deduction per offering period of $7,500. The 2015 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Code. The Company reserved 1,833,857 shares of Class A common stock for issuance under the 2015 ESPP.

The following table summarizes the ESPP activity during the years shown:


	Year Ended December 31,
	2020		2019		2018
Shares purchased and issued	80,789		92,738		90,084
Weighted average discounted price per share	$	18.64	$	12.64	$	9.74
Stock-based compensation expense (in thousands)	$	390	$	234	$	141