NOTE 10. STOCK PLANS

Stock-Based Compensation

During the three months ended March 31, 2019, the Company granted options to purchase an aggregate of 432,400 share of its common stock that are subject to time-based vesting conditions (“Time-Based Options”), and options to purchase an aggregate of 1,449,102 shares of its common stock that are subject to performance-based vesting conditions (“Performance Options”).

All Time-Based Options granted during the three months ended March 31, 2019 will vest over a period of four years. All Performance Options granted during the three months ended March 31, 2019 will become exercisable in three equal tranches based on the achievement of market price goals for the Company’s common stock of $49.15 per share, $98.31 per share and $196.62 per share, respectively. For each tranche to become exercisable, the closing price per share of the Company’s common stock must meet or exceed the applicable stock price goal for a period of 30 consecutive trading days.

The Company valued the Time-Based Options using the Black-Scholes Merton option pricing model.  The following assumptions were used to compute the grant date fair values of the Time-Based Options granted during the three months ended March 31, 2019:

The Company valued the Performance Options using a Monte Carlo simulation model. The following assumptions were used in the Monte Carlo simulation model for computing the grant date fair values of the Performance Options granted during the three months ended March 31, 2019:

The fair value per share was determined for each of the three tranches of each Performance Option. The weighted average grant date fair value of the Performance Options granted during the three months ended March 31, 2019 was $2.54 per share. The total fair value of such Performance Options is $3,674 and is being recorded as stock-based compensation expense over an average derived service period of 6.4 years.

The assumptions used in calculating the fair values of purchase rights granted under the ESPP during the three months ended March 31, 2019 are set forth in the table below:

The Company’s stock-based compensation expense recognized for the periods presented was as follows:

Equity Award Activity

Restricted Stock Awards

The Company’s restricted stock award activity for the three months ended March 31, 2019 was as follows:

At March 31, 2019, total unrecognized compensation cost related to restricted stock was $240, which is expected to be recognized over a weighted average period of 1.8 years.

Restricted Stock Units

The Company’s restricted stock unit activity for the three months ended March 31, 2019 was as follows:

At March 31, 2019, total unrecognized compensation cost related to restricted stock units was $450, which is expected to be recognized over a weighted average period of 0.6 years.

Performance-Based Stock Options

The activity during the three months ended March 31, 2019 related to stock options that are subject to performance-based vesting conditions tied to the future achievement of stock price goals by the Company was as follows:

The weighted average grant date fair value of performance-based stock options granted during the three months ended March 31, 2019 was $2.54 per share. No performance-based stock options vested during the three months ended March 31, 2019. At March 31, 2019, total unrecognized compensation expense related to performance-based stock options was $28,247 and is expected to be recognized over a weighted average period of 3.9 years.

Stock Options

The activity during the three months ended March 31, 2019 related to all other stock options was as follows:

The aggregate intrinsic values in the table above represents the difference between the fair market value of the Company’s common stock and the average option exercise price of in-the-money options, multiplied by the number of such options. The weighted average grant date fair value of stock options granted during the three months ended March 31, 2019 and 2018 was $3.55 and $7.91 per share, respectively. The aggregate intrinsic value of the options exercised during the three months ended March 31, 2019 and 2018 was $74 and $692, respectively. The total grant date fair value of stock options vested during the three months ended March 31, 2019 and 2018 was $2,718 and $1,761, respectively. At March 31, 2019, total unrecognized compensation expense related to stock options was $16,883 and is expected to be recognized over a weighted average period of 2.2 years.

Employee Stock Purchase Plan

On January 31, 2019, a total of 64,967 shares of common stock were purchased under the Company’s ESPP. As of March 31, 2019, accrued employee contributions for future purchases under the ESPP totaled $141.