Annual report pursuant to Section 13 and 15(d)

Stock Incentive Plan

v3.6.0.2
Stock Incentive Plan
 12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Incentive Plan
STOCK INCENTIVE PLAN
In 2000, the Company’s Board of Directors approved the Company’s 2000 Stock Incentive Plan (the “2000 Plan”) and between 2000 and 2010 authorized the Company to reserve a total of 28,500,000 shares of its then authorized common stock, par value $0.0001 per share (”Common Stock”) for issuance under the 2000 Plan. The 2000 Plan provided for the issuance of restricted stock grants, incentive stock options and nonqualified stock options. The Company will grant no further stock options or restricted awards under the 2000 Plan.
The Company’s 2010 Stock Incentive Plan (the “2010 Plan”), was adopted by the Company’s Board of Directors in May 2010 and approved by its stockholders in June 2010. The 2010 Plan provides for the grant of incentive stock options, non-statutory stock options, performance-based stock options, restricted stock awards and other stock-based awards. Upon its effectiveness, 10,000,000 shares of the Company’s Class A common stock were reserved for issuance under the 2010 Plan. As of December 31, 2016, the Company had granted options to purchase 3,119,604 shares of Class A common stock under the 2010 Plan.
Stock Option Grants 
The Company has granted stock options to certain employees and directors, including its principal and controlling stockholder, under the 2000 Plan. The Company has also granted stock options to certain employees and directors under the 2010 Plan. At December 31, 2016, 7,409,802 shares were available for grant under the 2010 Plan.
The following table summarizes the collective activity under the 2000 Plan and the 2010 Plan:
 
Number of Options
 
Weighted-Average Exercise Price
 
Weighted-Average Remaining Contractual Term
 
Aggregate Intrinsic Value
Outstanding at December 31, 2013
4,573,378

 
$
7.528

 
 
 
 
Granted(1)
145,000

 
7.578

 
 
 
 
Exercised
(482,475
)
 
2.999

 
 
 
 
Forfeited
(324,330
)
 
12.226

 
 
 
 
Expired
(18,000
)
 
2.750

 
 
 
 
Outstanding at December 31, 2014
3,893,573

 
7.721

 
 
 
 
Granted(1)
747,100

 
6.404

 
 
 
 
Exercised
(332,600
)
 
3.467

 
 
 
 
Forfeited
(168,633
)
 
9.409

 
 
 
 
Outstanding at December 31, 2015
4,139,440

 
7.740

 
 
 
 
Granted(1)
665,000

 
4.703

 
 
 
 
Exercised
(320,892
)
 
3.286

 
 
 
 
Forfeited
(194,562
)
 
8.154

 
 
 
 
Expired
(317,604
)
 
11.293

 
 
 
 
Outstanding at December 31, 2016
3,971,382

 
$
7.300

 
5.50
 
$
1,143

Options exercisable at December 31, 2016
2,664,405

 
$
7.850

 
4.05
 
$
626

Expected to vest at December 31, 2016
1,306,977

 
6.179

 
8.46
 
$
517

 
(1) Grants are related to the 2010 Plan.
The aggregate intrinsic value of stock options exercised during the years ended December 31, 2016, 2015 and 2014 was $575, $1,024 and $2,030, respectively.
 
During the year ended December 31, 2016, a total of 320,892 shares were issued upon the exercise of options under the 2000 Plan at an average price of $3.286 per share. Cash received from option exercises under all stock-based payment arrangements, net, for the years ended December 31, 2016, 2015 and 2014 was $1,054, $1,153 and $1,447, respectively.
Stock options issued under our 2000 Plan generally expire if not exercised within ten years after the grant date. Under the terms of our 2010 stock incentive plan, all options expire if not exercised within ten years after the grant date. Historically, options generally provided for vesting over five years, with 20% vesting on the first anniversary of the grant date and 5% vesting every three months thereafter. During 2011, the Company began awarding options generally providing for vesting over five years, with 20% vesting on each of the first five anniversaries of the grant date. From time to time, the Company awards options providing for vesting over three years, with one-third vesting on each of the first three anniversaries of the grant date. During the year ending December 31, 2016, the Company also awarded options that vest based upon the achievement of specific performance goals. If the employee ceases to be employed by the Company for any reason before vested options have been exercised, the employee has 90 days to exercise options that have vested as of the date of such employee’s termination or they are forfeited.

The Company uses the Black-Scholes option pricing model to determine the weighted-average fair value of options granted. The Company will recognize the compensation cost of stock-based awards on a straight-line basis over the vesting period of the award.
The determination of the fair value of stock-based payment awards utilizing the Black-Scholes model is affected by the stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The following table sets forth the significant assumptions used in the model during 2016, 2015 and 2014:
 
 
Year Ended December 31,
 
2016
 
2015
 
2014
Expected dividend yield
—%
 
—%
 
—%
Risk-free interest rate
1.16%-1.77%
 
1.53%-2.01%
 
1.93%-2.01%
Expected volatility
46%-49%
 
44%-49%
 
50%-52%
Expected life
6.5-10 years
 
5.0-6.5 years
 
6.5 years

 
The Company will continue to use judgment in evaluating the expected term, volatility and forfeiture rate related to the stock-based compensation on a prospective basis, and incorporating these factors into the Black-Scholes pricing model. Higher volatility and longer expected lives result in an increase to stock-based compensation expense determined at the date of grant. In addition, any changes in the estimated forfeiture rate can have a significant effect on reported stock-based compensation expense, as the cumulative effect of adjusting the rate for all expense amortization is recognized in the period that the forfeiture estimate is changed. If a revised forfeiture rate is higher than the previously estimated forfeiture rate, an adjustment is made that will result in a decrease to the stock-based compensation expense recognized in the accompanying consolidated financial statements. If a revised forfeiture rate is lower than the previously estimated rate, an adjustment is made that will result in an increase to the stock-based compensation expense recognized in the accompanying consolidated financial statements. These expenses will affect the cost of revenues, salaries and benefits and project development costs expenses. 
The weighted-average fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014, under the Black-Scholes option pricing model was $2.60, $3.03 and $3.97, respectively, per share. For the years ended December 31, 2016, 2015 and 2014, the Company recorded stock-based compensation expense of approximately $1,462, $1,769, and $2,493, respectively, in connection with stock-based payment awards. The compensation expense is allocated between cost of revenues and selling, general and administrative expenses in the accompanying consolidated statements of income (loss) based on the salaries and work assignments of the employees holding the options. As of December 31, 2016, there was approximately $2,990 of unrecognized compensation expense related to non-vested stock option awards that is expected to be recognized over a weighted-average period of 2.7 years.