Stock-Based Compensation | Stock-Based CompensationIn May 2019, the Company’s stockholders approved the amendment and restatement of the Company’s 2015 Equity Incentive Plan (as so amended and restated, the “Amended 2015 Plan”), primarily to increase the number of shares available under the plan. The Company registered with the SEC an additional 2,542,664 shares of common stock made available for issuance pursuant to the Amended 2015 Plan, bringing the total to 30,944,912 shares registered. Through December 31, 2020, the remaining aggregate number of shares of the Company's common stock available for future grants under the Amended 2015 plan was 11,883,391. The Amended 2015 Plan provides for the grant of stock-based awards, including nonqualified stock options, incentive stock options, restricted stock, RSUs, stock appreciation rights and other equity securities as incentives and rewards for employees, consultants and non-employee directors of the Company and its affiliated entities. The number of shares of common stock available for issuance under the Amended 2015 Plan is reduced by (i) one share for each share of common stock issued pursuant to an appreciation award, such as a stock option or stock appreciation right with an exercise or strike price of at least 100% of the fair market value of the underlying common stock on the date of grant, and (ii) 1.8 shares for each share of common stock issued pursuant to any stock award that is not an appreciation award, also known as a “full value award.” The Amended 2015 Plan allows the Company to utilize a broad array of equity incentives and performance cash incentives in order to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the interests of the Company’s stockholders. The Company accounts for stock-based compensation at fair value. Stock Option Awards The stock option awards granted to employees generally (i) have a term of ten years, (ii) vest over a four Fair Value Determination The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of its stock option awards on the date of grant. The Company will reconsider the use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model. The Black-Scholes-Merton option pricing model incorporates the following assumptions: • Volatility - The expected volatility of the options granted was estimated based upon historical volatility of the Company's share price of its common stock through daily observations of its trading history. • Expected life of options - The expected life of options granted to employees was determined from the simplified method. • Risk-free interest rate - The yield on zero-coupon U.S. Treasury strips was used to extrapolate a forward-yield curve. This “term structure” of future interest rates was then input into a numeric model to provide the equivalent risk-free rate to be used in the Black-Scholes-Merton model based on the expected term of the underlying grants. • Dividend yield - The Black-Scholes-Merton valuation model requires an expected dividend yield as an input. The Company does not anticipate paying dividends during the expected term of the grants; therefore, the dividend rate is assumed to be zero. The Company has historically granted stock options to newly hired and promoted employees. During 2019 and 2018, the Company granted approximately 139,000 and 364,000 stock options, respectively, with an estimated aggregate grant date fair value of $1.3 million and $2.4 million, respectively. The Company did not grant any stock options during the year ended December 31, 2020. The following table summarizes weighted-average assumptions used in the Company's calculations of fair value during the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Expected volatility 40.78% 39.53% Expected term (years) 6.11 6.11 Expected dividends —% —% Risk free interest rate 2.59% 2.68% A summary of the activity of the Company’s stock options is as follows: Shares Weighted- Weighted- Aggregate (In thousands, except years and per share data) Options outstanding at December 31, 2017 6,856 $ 7.94 Granted 364 15.56 Cancelled or expired (1) 8.59 Exercised (1,477) 8.42 $ 16,614 Forfeited (39) 9.97 Options outstanding at December 31, 2018 5,703 $ 8.29 4.38 $ 57,956 Granted 139 21.12 Cancelled or expired (1) 11.80 Exercised (1,670) 8.11 $ 29,584 Forfeited (18) 11.74 Options outstanding at December 31, 2019 4,153 $ 8.78 4.03 $ 65,887 Cancelled or expired (5) 20.17 Exercised (1,581) 8.14 $ 33,836 Forfeited (13) 18.17 Options outstanding at December 31, 2020 2,554 $ 9.10 3.94 $ 77,182 Options exercisable at December 31, 2020 2,330 $ 8.31 3.59 $ 72,266 Options exercisable and expected to vest at December 31, 2020 2,550 $ 9.09 3.93 $ 77,107 The Company recognized $1.1 million, $1.4 million and $1.5 million of stock-based compensation expense related to stock options in the years ended December 31, 2020, 2019 and 2018, respectively. The weighted-average grant date fair value of options granted during the years ended December 31, 2019 and 2018 was $9.18 and $6.63 per share, respectively. The total fair value of the shares vested during the years ended December 31, 2020, 2019 and 2018 was $1.4 million for each period. As of December 31, 2020, the total unrecognized cost related to non-vested options was approximately $1.5 million. This cost is expected to be recognized over a weighted-average period of 1.5 years. Restricted Stock Units The RSUs granted to newly hired and promoted employees, as well as to employees for on-going service, vest over a four-year period, with 25% vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. The RSUs granted to non-employee directors generally vest in full on the first anniversary of the grant date. The RSUs granted to non-employee consultants generally vest 50% on the first anniversary of the grant date and ratably on a quarterly basis through the second anniversary of the grant date. Some RSUs granted to employees for performance vest upon the completion of defined performance goals, subject to continued employment. The Company’s RSUs are generally classified as equity awards because the RSUs will be paid in the Company's common stock upon vesting. The related compensation expense is recognized over the service period and is based on the grant date fair value of the Company's common stock and the number of shares expected to vest. The fair value of the awards is not remeasured at the end of each reporting period. The awards do not carry voting rights until they are vested and released in accordance with the terms of the award. Service-Based Awards The majority of the annual compensation the Company provides to members of its board of directors is paid in the form of RSUs. In addition, members of the Company’s board of directors can elect to receive the remainder of their annual compensation, or a portion thereof, in the form of RSUs. An aggregate amount of approximately 58,000, 76,000 and 110,000 service-based RSUs were granted to the Company's directors as a result of these elections during the years ended December 31, 2020, 2019 and 2018, respectively, with an estimated grant date fair value of $1.4 million, $1.4 million and $1.3 million, respectively. During the years ended December 31, 2020, 2019 and 2018, the Company granted approximately 713,000, 740,000 and 900,000 service-based RSUs, respectively, to its employees, with an estimated grant date fair value of $19.1 million, $16.9 million and $10.7 million, respectively. During the years ended December 31, 2020, 2019 and 2018, the Company granted approximately 10,000, 11,000 and 14,000 service-based RSUs, respectively, to non-employee consultants, with an estimated grant date fair value of $0.2 million for each period. Performance-Based Awards In March 2020, 2019 and 2018, the Company awarded approximately 115,000, 125,000 and 474,000 performance-based RSUs, respectively, to the Company’s executives and employees (the “Bonus RSUs”), with an estimated grant date fair value of $3.1 million, $2.9 million and $5.6 million, respectively. Vesting of the Bonus RSUs is and was dependent upon the Company’s achievement of defined performance goals over the respective fiscal year. The Company records stock-based compensation expense related to performance-based RSUs when it is considered probable that the performance conditions will be met. Management believes it is probable that substantially all of the 2020 Bonus RSUs will vest. The level of achievement, if any, of performance goals will be determined by the compensation committee of the Company’s board of directors and, if such goals are achieved, the 2020 Bonus RSUs will vest, subject to continued employment, in March 2021. A portion of the March 2019 Bonus RSUs vested in March 2020 upon the determination of the level of achievement of the performance goals. Additionally, during 2020, 2019 and 2018, the Company awarded approximately 144,000, 96,000 and 134,000 performance-based RSUs, respectively, to the Company’s executives (the “Executive RSUs”). The estimated aggregate grant date fair values of the Executive RSUs granted in 2020, 2019 and 2018 was $3.9 million, $2.2 million and $1.6 million, respectively. Vesting of the Executive RSUs is and was dependent upon the Company’s achievement of defined performance goals over a two-year period. The vesting of Executive RSUs will ultimately range from 0% to 150% of the number of shares underlying the Executive RSU grant based on the level of achievement of the performance goals. If the Company achieves the performance goals, 50% of the Executive RSUs will vest on the second anniversary of the grant date and the remaining 50% will vest on the third anniversary of the grant date, in each case, subject to the executive's continued service as of the vesting date. During 2020, 2019 and 2018, the Company awarded additional shares underlying performance-based RSUs to the Company's executives for over-achievement of performance goal targets related to the Executive RSU grants originally awarded in 2018, 2017 and 2016 in the amounts of 20,000 shares, 11,000 shares and 1,000 shares, respectively. Award Summary A summary of the Company’s activity for outstanding RSUs is as follows: RSUs Weighted- (In thousands) Outstanding at December 31, 2017 3,548 $ 8.50 Granted 1,632 11.87 Forfeited (163) 9.69 Released (1,940) 8.64 Outstanding at December 31, 2018 3,077 $ 10.13 Granted 1,058 22.50 Forfeited (102) 14.86 Released (1,331) 10.52 Outstanding at December 31, 2019 2,702 $ 14.62 Granted 1,061 26.73 Forfeited (92) 17.72 Released (1,007) 15.63 Outstanding at December 31, 2020 2,664 $ 18.96 Vested and unreleased at December 31, 2020 (1) 802 (1) These RSUs were granted to the Company's board of directors as a part of their compensation for board and committee service and had vested but had not yet been issued and released. As of December 31, 2020, the total unrecognized cost related to non-vested RSUs was approximately $17.8 million. This cost is expected to be recognized over a weighted-average period of 1.31 years. The Company recognized $17.2 million, $15.2 million and $15.2 million of stock-based compensation expense related to RSUs in the years ended December 31, 2020, 2019 and 2018, respectively. |