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STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2020

7. STOCK-BASED COMPENSATION

Equity Incentive Plans

In May 2012, we adopted the 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan provides for the grant of incentive stock options, nonstatutory stock options, RSAs, RSUs and Stock Appreciation Rights to employees, non-employee directors and consultants. As of December 31, 2020, total shares remaining available for issuance under the 2012 Plan were 4,851,655.

Employee Stock Purchase Plan

Under the 2004 Employee Stock Purchase Plan (the “ESPP”), our employees may purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock at the beginning of the offering period or at the end of each applicable purchase period. The ESPP provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. ESPP contributions are limited to a maximum of 15% of an employee’s eligible compensation. The maximum number of shares that an employee may purchase in any purchase period is 2,500. An employee may not purchase shares with a value greater than $25,000 in any calendar year.

As of December 31, 2020, total shares remaining available for issuance under the ESPP were 181,699.

Director Compensation Program

Our non-employee directors receive compensation for services provided as a director. Each member of our Board of Directors who is not an employee receives both cash and equity compensation for services as a director, member of a committee of the Board of Directors, lead independent director and chairman, as applicable.

Each of our independent directors receives periodic automatic grants of equity awards under a program implemented under the 2012 Plan. These grants are non-discretionary. Only our independent directors or affiliates of such directors are eligible to receive automatic grants under the 2012 Plan. Under the program, each individual who first became a non-employee director will, on the date such individual joins the Board of Directors, automatically be granted a one-time grant of RSUs covering a number of shares of our common stock calculated as $125,000 ($250,000 prior to the October 2017 Amendments) divided by our common stock closing share price on the date of grant as reported on The Nasdaq Global Select Market, rounded down to the nearest whole share (the “Initial RSUs”), plus a one-time grant of RSUs covering a number of shares of our common stock calculated as $225,000 ($250,000 prior to the October 2017 Amendments) divided by our common stock closing share price on the date of grant as reported on The Nasdaq Global Select Market, which would be pro-rated for the number of whole months remaining until the anniversary of the prior year’s stockholders’ meeting, rounded down to the nearest whole share (the “Pro Rata RSUs”). The Initial RSUs vest in two equal annual installments, while Pro Rata RSUs vest in a single installment at the sooner of the next annual stockholder meeting or the one-year grant anniversary, in each case subject to the non-employee director’s continuous service through the applicable vesting date.

Annually, upon his or her re-election to the Board of Directors at the Annual Meeting of Stockholders, each non-employee director is automatically granted an RSU covering a number of shares of our common stock calculated as $225,000 ($250,000 prior to the October 2017 Amendments) divided by our common stock closing share price on the date of grant as reported on The Nasdaq Global Select Market, rounded down to the nearest whole share. These RSUs will vest at the sooner of the next annual stockholder meeting or the one-year anniversary of grant, subject to the non-employee director’s continuous service through the applicable vesting date. Following the amendment to our non-employee director compensation program, both the annual RSUs and Initial RSUs described above remained unchanged with the exception that the number of shares of our common stock subject to each award has been reduced.

These RSUs will vest in full upon the director’s death, the occurrence of a change in control or, with respect to awards made after the October 2017 Amendments, the director’s disability before the director’s service terminates. Director RSUs carry dividend equivalent rights to be credited with an amount equal to all cash dividends paid on the underlying shares of common stock while unvested. Dividend equivalents are subject to the same terms and conditions, including vesting, as the RSUs to which they attach and are paid in cash upon vesting.

Stock-Based Compensation Expense

Stock-based compensation expense is included in the consolidated statements of income as follows:


	Year Ended December 31,
(In thousands)	2020		2019		2018
General and administrative	$	1,698	$	2,056	$	3,233

Stock-based compensation expense included in the consolidated statements of income by award type is as follows:


	Year Ended December 31,
(In thousands)	2020		2019		2018
Stock options	$	242	$	—	$	305
RSUs		1,149		1,431		1,650
RSAs		273		615		1,920
Market-based RSUs (PSUs)		—		—		(224)
Market-based RSAs (PSAs)		—		—		(464)
ESPP		34		10		46
Total stock-based compensation expense	$	1,698	$	2,056	$	3,233

For the year ended December 31, 2018, $1.7 million of stock-based compensation was reversed for the forfeited market-based awards due to the separation of senior management members.

As of December 31, 2020, the unrecognized stock-based compensation cost and the estimated weighted-average amortization period were as follows:


	Unrecognized		Weighted-Average
	Compensation		Amortization
(In thousands)	Cost		Period (Years)
Stock options	$	1,328	3.4
RSUs		351	0.3
RSAs		369	2.4
Total unrecognized compensation cost	$	2,048

Compensation Awards

The following table summarizes equity award activity under the 2012 Plan and prior plans and related information:


		Weighted-
		Average			Weighted-			Weighted-
		Exercise			Average			Average
	Number of	Price of		Number of	Fair Value		Number of	Fair Value
	outstanding	Outstanding		outstanding	per Share		outstanding	per Share
(In thousands, except per share data)	options	Options		RSUs	at Grant		RSAs	at Grant
Balance as of December 31, 2019	1,087	$	24.18	94	$	13.94	78	$	14.46
Granted	250		14.10	85		13.30	31		14.30
Exercised	(30)		12.30	—		—	—		—
Released RSUs/RSAs	—		—	(94)		13.94	(28)		13.92
Forfeited	(152)		24.43	—		—	(51)		14.56
Balance as of December 31, 2020	1,155		22.28	85		13.30	30		14.61

As of December 31, 2020, the aggregate intrinsic value of the options outstanding and options exercisable was nil. All outstanding options were exercisable. The weighted average remaining contractual term was 3.69 years.

The total intrinsic value of the options exercised was $0.1 million, $0.2 million, and $0.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The total estimated fair value of options vested was not material for the year ended December 31, 2020 and 2019, and $0.8 million for the year ended December 31, 2018, respectively.

The total estimated fair value of RSUs vested was $1.3 million, $1.4 million, and $2.6 million in the years ended December 31, 2020, 2019 and 2018, respectively.

The total estimated fair value of RSAs vested was $0.6 million, $0.9 million, and $7.6 million in the years ended December 31, 2020, 2019 and 2018, respectively.

Valuation Assumptions

The weighted-average assumptions used in calculating the estimated value of our stock options on the date of grant as follows:


	Year Ended
	December 31, 2020
Risk-free interest rate		0.4	%
Expected term (in years)		6.11
Volatility		46.9	%
Dividend yield		0	%
Weighted-average estimated fair value of stock options granted	$	6.28

There were no grants of stock options during the years ended December 31, 2019 and 2018.