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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
Equity Award Plans
1995 Stock Plan
The 1995 Stock Plan provides for the grant of incentive stock options, non-statutory stock options and restricted stock units (“RSUs”). Incentive stock options may be granted only to employees. All other awards may be granted to employees and non-employees. Under the terms of the 1995 Stock Plan, no incentive stock option or non-statutory stock option may be granted in the ordinary course of business with a per share exercise price that is less than 100% of the fair value of the Company’s common stock on the date of grant. RSUs have no exercise price. Both options and RSUs vest over a period of time as determined by the Company’s Board of Directors (the “Board”), generally two to four years, and options expire seven years from the date of grant. Some of the RSUs granted by the Company have performance-based vesting terms, where vesting is dependent on achievement of certain financial and non-financial operating goals of the Company (performance-based RSUs, or “PRSUs”), or where vesting is dependent on performance of the Company’s total shareholder return (“TSR”) relative to the TSR of the NASDAQ Telecommunication Index (market-based RSUs, or “MRSUs”). The Company’s stockholders approved an amendment to the 1995 Stock Plan at the 2022 annual meeting of stockholders (the “2022 Annual Meeting”) to increase the number of shares of common stock reserved for issuance thereunder by 7,000,000 shares. As of December 31, 2022, an aggregate of 10,984,093 shares of common stock were reserved for issuance under the 1995 Stock Plan, of which 7,667,045 shares remained available for future grants.
2002 Director Plan
The 2002 Director Plan provides for the grant of non-statutory stock options and RSUs to non-employee directors of the Company. Under the terms of the 2002 Director Plan, no non-statutory stock option may be granted with a per share exercise price that is less than 100% of the fair value of the Company’s common stock on the date of grant. RSUs have no exercise price. Both options and RSUs vest over a period of time as determined by the Board, generally one year for RSUs and three years for options, and options expire seven years from the date of grant. As of December 31, 2022, an aggregate of 706,377 shares of common stock were reserved for issuance under the 2002 Director Plan, of which 524,199 shares remained available for future grants.
Employee Stock Purchase Plan
The 2002 Employee Stock Purchase Plan (“ESPP”) provides for the issuance of share purchase rights to employees of the Company. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. The ESPP enables employees to purchase shares at 85% of the fair market value of the Common Stock at the beginning or end of the offering period, whichever is lower. Offering periods generally begin on the first trading day on or after January 1 and July 1 of each year. Employees may participate through payroll deductions of 1% to 10% of their earnings. In the event that there are insufficient shares in the plan to fully fund the issuance, the available shares will be allocated across all participants based on their contributions relative to the total contributions received for the offering period. The Company’s stockholders approved an amendment to the ESPP Plan at the 2022 Annual Meeting to increase the number of shares of common stock reserved for issuance thereunder by 1,000,000 shares. As of December 31, 2022, 1,366,962 shares were reserved for future purchases by eligible employees. Under the ESPP, 817,243, 1,024,244 and 1,036,543 shares were issued during fiscal 2022, 2021 and 2020, respectively, representing $5.9 million, $5.1 million and $4.5 million in contributions.
Stock Options
(in thousands, except per share amounts)Number
of
Shares		Weighted-Average
Exercise Price
(per share)
Balance at December 31, 2021388 $3.15 
Exercised(388)3.15 
Canceled— — 
Balance at December 31, 2022— $— 
All stock options are fully vested and exercised as of December 31, 2022. Aggregate intrinsic value represents the difference between the exercise price of the stock options and the fair value of the Company’s common stock as of December 31, 2022. The intrinsic value of stock options exercised during the years ended December 31, 2022, 2021 and 2020 was $3.9 million, $2.1 million and $0.2 million, respectively.
No stock options were granted nor vested during the years ended December 31, 2022, 2021 and 2020.
The Company realized income tax benefit of $0.3 million from stock option exercises for the year ended December 31, 2022. The Company realized no income tax benefit from stock option exercises for the years ended December 31, 2021 and 2020 due to recurring tax losses and valuation allowances.
Restricted Stock Units
(in thousands, except per share amounts)Number
of
Shares		Weighted Average
Grant-Date Fair Value
Per Share
Balance at December 31, 20213,878 $7.31 
Granted2,767 9.47 
Vested(2,990)7.50 
Forfeited(156)8.27 
Balance at December 31, 2022
3,499 $8.93 
The fair value of RSUs vested during the years ended December 31, 2022, 2021 and 2020 was $22.4 million, $18.3 million and $15.5 million, respectively.
Share-based Compensation Cost
The following table sets forth the detailed allocation of the share-based compensation expense which was included in the Company’s Consolidated Statements of Operations:
 Year ended December 31,
(in thousands)202220212020
Share-based compensation expense included in:
Cost of revenue$2,233 $2,345 $1,712 
Research and development expense7,519 7,164 4,850 
Selling, general and administrative expense15,460 14,547 11,478 
Total$25,212 $24,056 $18,040 
Share-based compensation expense by type of award:
RSUs17,786 14,573 11,522 
PRSUs3,865 6,231 4,022 
MRSUs1,558 1,304 711 
Employee stock purchase rights under ESPP2,003 1,948 1,785 
Total$25,212 $24,056 $18,040 
As of December 31, 2022, total unrecognized share-based compensation cost related to unvested RSUs was $19.7 million and is expected to be recognized over a weighted-average period of approximately 1.4 years.
French Pension Plan
Under French law, the Company’s subsidiaries in France are obligated to make certain payments to their employees upon their retirement from the Company. These payments are based on the retiring employee’s salary for a number of months that varies according to the employee’s period of service and position. Salary used in the calculation is the employee’s average monthly salary for the twelve months prior to retirement. The payments are made in one lump-sum at the time of retirement. The French pension plan is unfunded and there are no contributions to the plan required by related laws or funding regulations. No required contributions are expected in fiscal 2023, but the Company, at its discretion, may make contributions to the defined benefit plan.
The Company’s defined benefit pension obligations are measured annually as of December 31. The present value of these lump-sum payments is determined on an actuarial basis and the actuarial valuation considers the employees’ age and period of service with the Company, projected mortality rates, mobility rates, increases in salaries and a discount rate.
The Company’s pension obligations as of December 31, 2022 and 2021, and the changes to the Company’s pension obligations for each of those years, were as follows:
(in thousands)20222021
Projected benefit obligation:
Balance at January 1$6,003 $6,057 
Service cost259 272 
Interest cost50 20 
Actuarial (gains) losses (626)233 
Benefits paid(107)(94)
Foreign currency translation adjustment(296)(485)
Balance at December 31$5,283 $6,003 
Presented on the Consolidated Balance Sheets as:
Current portion (included in “Accrued and other current liabilities”)$242 $32 
Long-term portion (included in “Other non-current liabilities”)$5,041 $5,971 
The table below presents the components of net periodic benefit costs:
Year ended December 31,
(in thousands)202220212020
Service cost$259 $272 $227 
Interest cost50 20 78 
Net periodic benefit cost included in result of operations$309 $292 $305 
The following assumptions were used in determining the Company’s pension obligation:
As of December 31,
20222021
Discount rate3.3 %0.9 %
Mobility rate 6.6 %4.7 %
Salary progression rate 3.0 %2.5 %
The Company evaluates the discount rate assumption annually. The discount rate is determined using the average yields on high-quality fixed-income securities that have maturities consistent with the timing of benefit payments.
The Company also evaluates other assumptions related to demographic factors, such as retirement age, mortality rates and turnover periodically, updating them to reflect experience and expectations for the future. The mortality assumption related to the Company’s defined benefit pension plan used the most current mortality tables published by the French National Institute of Statistics and Economic Studies.
As of December 31, 2022, future benefits expected to be paid in each of the next five years, and in the aggregate for the five-year period thereafter are as follows (in thousands):
Year ending December 31,
2023$242 
2024255 
2025395 
2026683 
2027534 
2028 – 20323,436 
Total$5,545 
Valuation Assumptions
The Company estimates the fair value of stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. At the date of grant, the Company estimated the fair value of each stock purchase right granted under the ESPP using the following weighted average assumptions:
 Year ended December 31,
 202220212020
Expected term (in years)0.500.500.50
Volatility47 %45 %56 %
Risk-free interest rate1.4 %0.1 %0.9 %
Expected dividends0.0 %0.0 %0.0 %
The expected term of the stock purchase right under ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term to estimate the expected volatility. The risk-free interest rate that the Company uses in the Black-Scholes option valuation model is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future.
The estimated weighted-average fair value per share of stock purchase rights under the ESPP, granted for the years ended December 31, 2022, 2021 and 2020 was $2.91, $2.24 and $1.80, respectively.