15.Stock-Based Compensation

 

The Company has stock options and restricted stock units outstanding under the 2004 Stock Incentive Plan (the “2004 Plan”), the 2010 Long-Term Incentive Plan (the “2010 Plan”) and the Envestnet, Inc. Management Incentive Plan for Envestnet | Tamarac Management Employees (the “2012 Plan”). On July 13, 2017, the shareholders approved the 2010 Long-Term Incentive Plan as Amended. The amendment increased the number of common shares of the Company reserved for delivery under the 2010 Plan by 3,525,000 shares.

 

In connection with the Yodlee merger, the Company adopted the 2015 Acquisition Equity Award Plan (the “2015 Plan”). The 2015 Plan provides for the grant of restricted common stock units for certain Envestnet | Yodlee employees. The maximum number of shares of stock which may be issued with respect to awards under the 2015 Plan is 1,052,000. These awards vest over a period of 43 months subsequent to the acquisition date of November 19, 2015. As of September 30, 2017, the remaining amount of unrecognized expense totaled $6,070.

 

As of September 30, 2017, the maximum number of common shares of the Company available for future issuance under the Company’s plans is 3,945,537.  

 

Stock-based compensation expense under the Company’s plans was as follows:

 

 

The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 37.5% for the three and nine months ended September 30, 2017. The tax effect on stock-based compensation expense above was calculated using a blended statutory rate of 40.0% for the three and nine months ended September 30, 2016.  However, due to the valuation allowance recorded on domestic deferreds, there was no tax effect related to stock-based compensation expense for the three and nine months ended September 30, 2017.

 

Stock Options

 

The following weighted average assumptions were used to value options granted during the periods indicated:

 

 

The following table summarizes option activity under the Company’s plans:

 

 

Exercise prices of stock options outstanding as of September 30, 2017 range from $0.11 to $55.29. At September 30, 2017, there was $2,414 of unrecognized stock-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted-average period of 1.8 years.

 

Restricted Stock Units and Restricted Stock Awards

 

Periodically, the Company grants restricted stock unit awards to employees. Beginning with grants issued in February 2016, restricted stock units awards vest one-third on the first anniversary of the grant date and quarterly thereafter. For grants issued prior to February 2016, restricted stock units awards would vest ratably in three annual tranches from the date of grant. The following is a summary of the activity for unvested restricted stock units and awards granted under the Company’s plans:

 

 

At September 30, 2017, there was $49,527 of unrecognized stock-based compensation expense related to unvested restricted stock units and awards, which the Company expects to recognize over a weighted-average period of 2.0 years.