Enom 2014 Annual Report Download - page 90

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F-26
Restricted stock units
Weighted
average
grant date
Shares
fair value
Unvested at December 31, 2013 .............................................................................. 1,091 $ 42.55
Spin Adjustment ....................................................................................................... (201 ) $ 14.54
Granted ..................................................................................................................... 1,110 $ 11.69
Vested ...................................................................................................................... (681 ) $ 26.87
Forfeited ................................................................................................................... (462 ) $ 29.05
Unvested at December 31, 2014 .............................................................................. 857 $ 10.28
As of December 31, 2014, there was approximately $10.2 million of unrecognized compensation cost related to non-vested
RSUs and restricted shares. The amount is expected to be recognized over a weighted average period of 2.6 years. To the extent that
the forfeiture rate is different from that anticipated, stock-based compensation expense related to these awards will be different.
In March 2015, the company issued 0.5 million RSUs 0.3 million options as part of its annual employee compensation grant.
Employee Stock Purchase Plan
In May 2011, we commenced our first offering under the Demand Media, Inc. 2010 Employee Stock Purchase Plan (the
“ESPP”), which allows eligible employees to purchase, through payroll deductions, a limited amount of our common stock at a 15%
discount to the lower of market price as of the beginning or ending of each six-month purchase period. Participants can authorize
payroll deductions for amounts up to the lesser of 15% of their qualifying wages or the statutory limit under the U.S. Internal Revenue
Code. The ESPP provides up to a 24-month offering period which is comprised of four consecutive six-month purchase periods
commencing May and November, with the most recent offering period commencing in November 2014. A maximum of seven
hundred fifty shares of common stock may be purchased by each participant at six-month intervals during the offering period. The fair
value of the ESPP options granted is determined using a Black-Scholes-Merton model and is amortized over the remaining life of the
24-month offering period of the ESPP. The Black-Scholes-Merton model included an assumption for expected volatility of between
58% and 60% for each of the four purchase periods. During the years ended December 31, 2014, 2013 and 2012, we recognized an
immaterial, $1.8 million and $1.9 million of expense, respectively, in relation to the ESPP and there were 1.8 million shares of
common stock remaining authorized for issuance under the ESPP at December 31, 2014.
Stock-based Compensation Expense
Stock-based compensation expense related to all employee and non-employee stock-based awards was as follows (in
thousands):
Year ended December 31,
2014 2013 2012
Service costs ............................................................................... $ 1,422 $ 2,420 $ 2,424
Sales and marketing ................................................................... 683 3,823 5,114
Product development .................................................................. 4,745 3,835 4,942
General and administrative ........................................................ 12,016 12,525 14,709
Discontinued operations ............................................................. 2,949 4,781 4,179
Total stock-based compensation included in net income
(loss) ........................................................................................ 21,815 27,384 31,368
Income tax benefit related to stock-based compensation
included in net income (loss) ..................................................... (706) (782 ) (758)
$ 21,109 $ 26,602 $ 30,610
During the years ended December 31, 2014, 2013 and 2012, $1.0 million, $2.0 million and $1.7 million respectively, of stock-
based compensation expense related to stock options was capitalized, primarily as part of internally developed software projects.
During the fourth quarter we modified the equity for 3 employees, where we accelerated certain RSU’s resulting in the
recognition of $3.5 million of expense.