Note 13. Share-Based Compensation

Equity Plans

The Company’s board of directors and stockholders approved the following equity plans:

the 1998 Share Incentive Plan

the 2000 Share Incentive Plan

the 2004 Share Incentive Plan

the 2006 Share Incentive Plan

the 2013 Equity Incentive Plan (“2013 Plan”)

The Company issued stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) to employees, consultants and non-employee directors. Stock option awards generally vest over a four year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options, RSAs and RSUs may be granted from these plans. Prior to the Company’s initial public offering in September 2013, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third party valuation specialists.

Stock Options

Options have been granted to the Company’s employees under the five incentive plans and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and 12.5% on a semi-annual basis thereafter. All options expire ten years after the date of grant.

The following is a summary of option activity (in thousands, except per share data):



				Weighted				Weighted
		Weighted		Average				Average
		Average		Share Price		Weighted		Remaining	Aggregate
	Number of	Exercise		on Date of		Average		Contractual	Intrinsic
	shares	Price		Exercise		Fair Value		Life	Value
	(in thousands, except price data)
Outstanding, January 1, 2018	536	$	10.04			$	5.19		$	14,888
Exercised	(122)		9.79	$	36.18		5.00			3,223
Forfeited	(127)		9.92				5.10			1,886
Outstanding, September 30, 2018	287	$	10.19			$	5.31	4.86	$	4,153
Exercisable, September 30, 2018	287	$	10.19					4.86	$	4,153
Vested and expected to vest	287	$	10.19					4.86	$	4,153

As of September 30, 2018, there was no unrecognized stock option expense.

Restricted Stock Units/Awards

The following is a summary of RSU/RSA activity (in thousands, except per share data):


		Weighted
		Average Share		Weighted		Aggregate
	Number of	Price on Date		Average Fair		Intrinsic
	shares	of Release		Value		Value
	(in thousands, except price data)
Outstanding at January 1, 2018	707			$	29.23	$	26,732
Granted	523				33.83		17,704
Released	(279)	$	37.66		28.92		10,519
Cancelled/Forfeited	(34)				32.58		844
Outstanding, September 30, 2018	917			$	31.82	$	22,605
Vested and expected to vest	917					$	22,605

As of September 30, 2018, there was $27.1 million of unrecognized compensation expense related to these RSUs and RSAs. This expense is expected to be recognized over 2.7 years.

Share-Based Compensation

Employee share-based compensation expenses recognized for the periods indicated (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Share-based compensation - by expense type
Cost of goods sold	$	205	$	124	$	593	$	336
Research and development		624		400		1,876		1,106
Sales and marketing		181		118		669		367
General and administrative		1,884		1,439		5,224		4,040
Total share-based compensation expense	$	2,894	$	2,081	$	8,362	$	5,849


	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Share-based compensation - by award type
Employee stock options	$	12	$	263	$	12	$	810
Restricted stock units		2,882		1,818		8,350		5,039
Total share-based compensation expense	$	2,894	$	2,081	$	8,362	$	5,849