11.

Stock Option Plan

The Company adopted the 2012 Equity Incentive Plan, or the 2012 Plan, in May 2012, under which the Company initially reserved for the issuance of 4,000,000 shares of its common stock. The 2012 Plan was approved by the Company’s stockholders on June 20, 2012. On June 18, 2014, the date of the Company’s annual stockholders meeting, the Company’s stockholders approved an amendment to the 2012 Plan increasing the total shares reserved by 5,000,000 shares, for a total of 9,000,000 shares.

As of December 31, 2017, the Company had outstanding options issued to its employees to purchase up to 3,214,635 shares of the Company’s common stock, to its directors to purchase up to 627,500 shares of the Company’s common stock, as well as options to consultants in connection with services rendered to purchase up to 10,000 shares of the Company’s common stock.

Stock options to employees generally vest ratably in annual installments over three years, commencing on the first anniversary of the grant date and have contractual terms of ten years. Stock options to directors generally vest ratably over one or three years and have contractual terms of ten years. Stock options are valued using the Black-Scholes option pricing model and compensation is recognized based on such fair value over the period of vesting on a straight-line basis. The Company has also reserved an aggregate of 526,364 additional shares for issuance under options granted outside of the 2003 and 2012 Plans.

Proceeds from the option exercises during the years ended December 31, 2017, 2016, and 2015 amounted to $0.1 million, $0.7 million and $4.6 million respectively. The intrinsic value of these options amounted to $0.3 million, $1.5 million and $23.8 million for years ended December 31, 2017, 2016 and 2015, respectively.

Transactions under the 2012 Plan for the years ending December 31, 2017, 2016, and 2015 were as follows:


(in thousands, except share and per share data)	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2014		6,505,663		$	4.07
Granted		427,800			10.47
Exercised		(3,249,160	)		3.95
Cancelled		(202,835	)		4.36

Outstanding, December 31, 2015		3,481,468			4.96
Granted		362,800			6.40
Exercised		(234,833	)		4.57
Cancelled		(144,100	)		6.43

Outstanding, December 31, 2016		3,465,335			5.07
Granted		688,800			5.27
Exercised		(180,000	)		3.67
Cancelled		(122,000	)		6.64

Outstanding, December 31, 2017		3,852,135		$	5.12		6.47	$	1,152

Options exercisable, December 31, 2017		2,925,502		$	5.12		5.58	$	1,152

Options exercisable, December 31, 2016		2,671,835		$	4.40		5.88	$	3,383

Options available for future grant at December 31, 2017		303,928

In September 2017, the Company granted an option for 500,000 shares of its common stock, with an exercise price of $6.16 per share, which vests ratably in annual installments over three years, commencing on the first anniversary of the grant date and have contractual terms of ten years. This option was granted outside of the 2012 plan and therefore, is not included in the table above. The grant date fair value was $2.2 million. As of December 31, 2017, all 500,000 options are outstanding.

At December 31, 2017, total unrecognized compensation costs related to non-vested stock options outstanding amounted to $5.1 million. The cost is expected to be recognized over a weighted-average period of 1.73 years.

Restricted Stock

In December 2017, the Company issued 838,000 shares of restricted stock to its employees, which vest ratably in annual installments over three years, commencing on the first anniversary of the grant date. In December 2017, the Company issued 69,032 shares of restricted stock to its non-employee directors, which vest in their entirety on the one-year anniversary of the grant date. In December 2016, the Company issued 625,750 shares of restricted stock to its employees, which vest ratably in annual installments over three years, commencing on the first anniversary of the grant date. In December 2016, the Company issued 86,020 shares of restricted stock to its non-employee directors, which vest in their entirety on the one-year anniversary of the grant date. In May, June and December 2015, the Company issued 1,000,000, 50,000 and 403,083 shares of restricted stock to its employees, respectively, which vest ratably in annual installments over three years, commencing on the first anniversary of the grant date. In September and December 2015, the Company issued 4,186 and 133,305 shares of restricted stock to its non-employee directors, which vested in their entirety at December 31, 2015 and on the one-year anniversary of the grant date respectively.

In May, June and December 2017, the Company repurchased 132,000, 16,666 and 245,602 shares at average prices of $7.12, $6.11 and $4.14, respectively to cover payroll taxes. In May, June and December 2016, the Company repurchased 116,667, 6,667 and 119,873 shares at average prices of $6.86, $7.74 and $5.35, respectively to cover payroll taxes. In September and December 2015, the Company repurchased 7,669 and 16,709 shares at average prices of $11.57 and $8.31, respectively to cover payroll taxes. A summary of the status of non-vested restricted stock as of December 31, 2017, 2016 and 2015 is as follows:


	Number of Shares			Weighted-Average Grant Date Fair Value
Non-vested, December 31, 2014		144,508		$	4.70
Granted		1,590,574			9.01
Vested		(148,694	)		4.88
Cancelled		—			—

Non-vested, December 31, 2015		1,586,388			9.00
Granted		711,770			5.35
Vested		(617,666	)		8.90
Cancelled		—			—

Non-vested, December 31, 2016		1,680,492			7.49
Granted		907,032			4.14
Vested		(778,965	)		7.66
Cancelled		—			—

Non-vested, December 31, 2017		1,808,559		$	5.74

As of December 31, 2017, there was $8.2 million of total unrecognized stock-based compensation expense related to non-vested restricted stock arrangements. The expense is expected to be recognized over a weighted-average period of 1.59 years.