|9 Months Ended|
Sep. 30, 2019
|Share-based Payment Arrangement [Abstract]|
|Stock-based Expense||Stock-based Expense
Restricted Stock Awards
During the three and nine months ended September 30, 2019, we made the following grants of time-based restricted stock:
Market-based Restricted Stock Awards
During the three and nine months ended September 30, 2019, we made the following grants of restricted stock that become eligible to vest based on the achievement of certain market-based conditions, as described below:
Shares that become eligible to vest, if any, become Eligible Shares. These awards vest ratably over four calendar quarters beginning on the first day of the next calendar quarter immediately following the date on which they become Eligible Shares. Vesting is conditional upon the recipient remaining a service provider, as defined in the plan document, to the Company through each applicable vesting date.
Performance-based Restricted Stock Awards
We granted performance-based restricted stock awards related to our acquisitions of Hipercept and Simple Bills. These awards are classified as liabilities and become eligible to vest if specified performance targets are achieved prior to the performance deadline. The performance-based restricted stock awards are forfeited if the performance targets are not achieved prior to the performance deadline. Compensation expense for performance-based restricted stock awards is recognized on a straight-line basis over the requisite service period, which includes both the performance period and any subsequent time-based
vesting period. Expense is only recognized if it is determined that achievement of the performance condition is probable. The fair value of performance-based restricted stock awards is based on the expected achievement of the performance target at the end of each reporting period.
The purchase agreement for Simple Bills provides for up to $10.0 million of restricted stock awards contingent upon the achievement of performance targets during 2020 and 2021. Subsequent to achievement of the respective performance targets, the Simple Bill awards vest quarterly over a one-year service period beginning on July 1, 2021 and July 1, 2022, respectively. As of September 30, 2019, the achievement of the respective performance targets for 2020 and 2021 are probable, and expense is recognized for each vesting tranche using the graded-vesting attribution method.
The purchase agreement for Hipercept provides for up to $2.7 million of restricted stock awards contingent upon the achievement of performance targets for the six-month period ended June 30, 2022. Subsequent to achievement of the performance target, the Hipercept awards will vest immediately during the second half of 2022. As of September 30, 2019, we are recognizing $0.8 million of compensation cost over the requisite service period based on expected achievement of the performance target.
Grants of restricted stock may be fulfilled through the issuance of previously authorized but unissued common stock shares, or the reissuance of shares held in treasury. All awards were granted under the Amended and Restated 2010 Equity Incentive Plan.We capitalized stock-based expense for software development costs of $0.4 million and $1.1 million for the three and nine months ended September 30, 2019, respectively.
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef