The Company’s 2016 Equity Incentive Plan (the “2016 Plan”), became effective on September 15, 2016. The 2016 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights and performance share awards to employees, directors and consultants of the Company. The number of shares of common stock reserved for issuance under the 2016 Plan will automatically increase on January 1 of each year by 3% of the number of shares of the Company’s capital stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s board of directors.

The Company’s Employee Stock Purchase Plan (“2016 ESPP”) became effective on September 15, 2016. The number of shares reserved for issuance under the 2016 ESPP will automatically increase on January 1 of each year by the lesser of 200,000 shares of the Company’s common stock, 1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s board of directors.

The 2016 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. The 2016 ESPP provides for separate six-month offering periods beginning each March and September of each fiscal year.

On each purchase date, eligible employees will purchase the Company’s stock at a price per share equal to 85% of the lesser of (i) the fair market value of the Company’s common stock on the offering date or (ii) the fair market value of the Company’s common stock on the purchase date.

For the years ended December 31, 2020, 2019 and 2018, 49,319, 42,481, and 74,517 shares of common stock, respectively, were purchased under the 2016 ESPP. As of December 31, 2020, 2019 and 2018, total recognized compensation cost was $1.4 million, $0.9 million, and $0.7 million, respectively. As of December 31, 2020, unrecognized compensation cost related to the 2016 ESPP was $0.4 million which will be amortized over a weighted-average period of 0.20 years.

Stock option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant based on the closing market price of its common stock as reported on The Nasdaq Global Market. The option awards generally vest over four years and are exercisable any time after vesting. The stock options expire ten years after the date of grant.

The weighted-average grant-date fair value per share of stock options granted for the year ended December 31, 2018 was $35.00. There were no stock options granted during the years ended December 31, 2020 and 2019. The Company recorded stock-based compensation expense of $3.5 million, $5.7 million and $7.7 million for the years ended December 31, 2020, 2019 and 2018, respectively, attributed to stock options.

The total intrinsic value of options exercised in 2020, 2019 and 2018 was $30.6 million, $48.2 million and $25.7 million, respectively. This intrinsic value represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option. Based on the fair market value of the Company’s common stock at December 31, 2020, 2019 and 2018 the total intrinsic value of all outstanding options was $34.5 million, $37.3 million and $59.9 million, respectively.

There were no excess tax benefits realized for the tax deductions from stock options exercised during the years ended December 31, 2020, 2019 and 2018.

The fair value of stock option grants and shares issuable under the ESPP is determined using the Black-Scholes option pricing model with the following weighted-average assumptions:

	Year Ended December 31,
	2020		2019		2018
Employee Stock Options:
Fair value of common stock		—		—	$33.06 - $58.75
Expected term (in years) ⁽¹⁾		—		—		6.00
Expected volatility ⁽²⁾		—		—	45% - 50%
Risk-free interest rate ⁽³⁾		—		—	2.72% - 2.98%
Dividend rate ⁽⁴⁾		—		—	0%
Employee Stock Purchase Plan:
Expected term (in years) ⁽¹⁾		0.50		0.50		0.50
Expected volatility ⁽²⁾	55% - 65%		45%		40% - 60%
Risk-free interest rate ⁽³⁾	0.12% - 0.29%		1.93% - 2.52%		1.18% - 2.33%
Dividend rate ⁽⁴⁾	0%		0%		0%

Total unrecognized compensation cost related to nonvested stock options was approximately $1.4 million as of December 31, 2020 and is expected to be recognized over a weighted average period of 0.9 years. The amount of cash received from the exercise of stock options in 2020, 2019 and 2018 was $8.2 million, $17.4 million, and $10.2 million, respectively.

	Stock options outstanding			Weighted average exercise price
Outstanding at December 31, 2019		723,383		$	26.56
Exercised		(323,838	)		25.20
Forfeited		(120,524	)		32.57
Outstanding at December 31, 2020		279,021			25.55

Stock options outstanding, vested and expected to vest and exercisable are as follows:

	As of December 31, 2020
	Number of shares		Remaining contractual life (years)		Weighted- average exercise price
Outstanding		279,021		6.30	$	25.55
Vested and expected to vest		277,328		6.30		25.50
Exercisable		166,634		5.90		21.69

Vested

Nonvested

Options

outstanding

Weighted

average

exercise

price

Options

outstanding

Weighted

average

exercise

price

Outstanding at December 31, 2020

166,634

21.69

112,387

31.28

During the year ended December 31, 2020, the Company granted 346,912 RSUs to members of its senior management and certain other employees pursuant to the 2016 Plan. The Company accounts for RSUs issued to employees at fair value, based on the market price of the Company’s common stock on the date of grant. The weighted-average grant date fair values of RSUs granted during the years ended December 31, 2020, 2019 and 2018 were $122.82, $80.16 and $52.11 respectively. The fair values of RSUs that vested during the years ended December 31, 2020, 2019 and 2018, were $18.2 million, $11.9 million and $3.1 million, respectively. During the years ended December 31, 2020, 2019 and 2018, the Company recorded $20.1 million, $16.3 million, and $5.4 million respectively, of stock-based compensation related to the RSUs. There were 315,111 RSUs that vested during the year ended December 31, 2020.

As of December 31, 2020, there was $50.7 million of unrecognized compensation expense related to unvested RSUs which is expected to be recognized over a weighted-average period of approximately 2.4 years. For RSUs subject to graded vesting, the Company recognizes compensation cost on a straight-line basis over the service period for the entire award.

During the year ended December 31, 2020, the Company granted 302,050 PSUs to members of its management pursuant to the 2016 Plan. The PSUs generally vest based on the Company achieving certain revenue growth thresholds which range from 20% to 40% compounded annual growth over a measurement period of two years for the first 50% of PSUs and three years for the remaining PSUs. The vesting of the PSUs is subject to the employee’s continued employment with the Company through the date of achievement. During the year ended December 31, 2020, the share price of the Company’s common stock on the date of issuance of the PSUs ranged from $82.23 to $158.95 per share. The fair value is based on the value of the Company’s common stock at the date of issuance and the probability of achieving the performance metric. The Company has assessed the probability of achievement of the award at 100% based on past performance of achievement of the performance metric. Compensation cost is adjusted in future periods for subsequent changes in the expected outcome of the performance related conditions. The weighted-average grant date fair value of PSUs granted during the years ended December 31, 2020, 2019 and 2018 was $119.78, $80.87 and $55.99, respectively. 136,768 PSUs vested during the year ended December 31, 2020. No PSUs vested during the years ended December 31, 2019 and 2018. For the years ended December 31, 2020, 2019 and 2018, the Company recognized $21.8 million, $10.6 million and $1.5 million, respectively, of stock compensation expense in connection with the PSU awards.

As of December 31, 2020, there was $37.5 million of unrecognized compensation expense related to unvested PSUs which is expected to be recognized over a weighted-average period of approximately 1.8 years. Compensation cost is recognized under the accelerated method and is adjusted in future periods for subsequent changes in the expected outcome of the performance related conditions.

During the years ended December 31, 2020 and 2019, the Company granted no market-based RSUs pursuant to the 2016 Plan. The market-based RSUs granted prior to the year ended December 31, 2019 vested based on the Company achieving certain stock price thresholds, which ranged from $35 per share to $65 per share for 30 consecutive trading days as reported by The Nasdaq Stock Market, LLC, subject to the employee’s continued employment with the Company through the date of achievement. The share price of the Company’s common stock on the date of issuance of the market-based RSUs was between $33.06 and $45.17 per share. The fair value was based on values calculated under the Monte Carlo simulation model on the grant date. The key estimates used in the Monte-Carlo simulation were a risk-free rate of 2.26% to 2.90%, dividend yield of zero, expected term of 10 years and volatility of 50% to 60%. Compensation cost was not adjusted in future periods for subsequent changes in the expected outcome of market related conditions. During the years ended December 31, 2020 and 2019, the Company recognized no stock compensation expense in connection with these awards. During the year ended December 31, 2018, the Company recognized $10.5 million of stock compensation expense in connection with these awards.

As of December 31, 2020, there was no unrecognized compensation expense related to unvested market-based awards.

	Number of Shares
Outstanding at December 31, 2019		1,314,791
Granted		648,962
Vested		(451,879	)
Forfeited		(91,333	)
Outstanding at December 31, 2020		1,420,541

The Company recorded the total stock-based compensation expense as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Cost of revenue	$	2,954	$	1,966	$	2,306
Sales and marketing		15,946		9,983		9,282
Research and development		8,703		7,820		7,106
General and administrative		19,152		13,720		7,131
Total	$	46,755	$	33,489	$	25,825

Stock-based compensation expense is recognized over the award’s expected vesting schedule, which is reduced for forfeitures.