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Table of Contents
83
2013 Employee Stock Purchase
On June 6, 2013, our board of directors adopted our 2013 Employee Stock Purchase Plan (the 2013 ESPP) and our
stockholders subsequently approved the 2013 ESPP Plan on August 29, 2013 in order to enable eligible employees to purchase
shares of our common stock at a discount following the date of our IPO. The 2013 ESPP permits eligible employees to acquire
shares of our common stock by accumulating funds through periodic payroll deductions of up to 15% of base salary. Our 2013
ESPP is intended to qualify as an ESPP under Section 423 of the Code and employees will receive a 15% discount to the lesser
of the fair market value of our common stock on (i) the first trading day of the applicable offering period or (ii) the last day of
each purchase period in the applicable offering period. Each offering period may run for no more than six months. We have
reserved 4,000,000 shares of our common stock under our 2013 ESPP. The aggregate number of shares issued over the term of
our 2013 ESPP will not exceed 20,000,000 shares of our common stock. As of December 31, 2015, there were 4,897,408 shares
of common stock available for future issuance under the 2013 ESPP
Note 14. Stockholders' Equity
Share-based Compensation
Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands):
Year Ended
December 31,
2015 2014 2013
Cost of revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 262 $ 617 $ 1,185
Technology and development . . . . . . . . . . . . . . . . . . . . . . . . . 11,992 10,451 9,414
Sales and marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,901 11,300 7,107
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,620 14,520 19,252
Total share-based compensation expense . . . . . . . . . . . . . . . . $ 38,775 $ 36,888 $ 36,958
Fair Value of Stock Options
We estimate the fair value of each stock option award using the Black-Scholes-Merton option-pricing model, which
utilizes the fair value of our common stock based on active market and requires input on the following subjective
assumptions:
Expected Term. The expected term for options granted to employees, officers, and directors is calculated as the
midpoint between the vesting date and the end of the contractual term of the options. The expected term for options
granted to consultants is determined using the remaining contractual life.
Expected Volatility. The expected volatility was historically based on the average volatility of public companies
within our peer group as our common stock had previously not been publicly trading for a long enough period to
rely on our own expected volatility. Beginning with stock options granted during the fourth quarter of 2015, we
have based the expected volatility on the average volatility of our stock price as we now have over two years of
trading history.
Expected Dividends. The dividend assumption is based on our historical experience. To date we have not paid any
dividends on our common stock.
Risk-Free Interest Rate. The risk-free interest rate used in the valuation method is the implied yield currently
available on the United States treasury zero-coupon issues, with a remaining term equal to the expected life term of
our options.