8. Stock Based Compensation

In January 2013, our Board of Directors adopted our 2013 Equity Incentive Plan, or the 2013 Plan, which became effective upon of the closing of our initial public offering in May 2013. On January 1, 2015, the number of shares available for issuance under the 2013 Plan automatically increased by a number of shares equal to 5% of the total common stock outstanding at December 31, 2014. As of June 30, 2015 there were 9,445,589 shares reserved under the 2013 Plan for the future issuance of equity awards.

The following table summarizes option activity under our 2013 Equity Incentive Plan and related information during the six months ended June 30, 2015:

	Shares
	Subject to			Weighted-
	Outstanding			Average Exercise
	Options			Price Per Share
Balance at December 31, 2014		4,249,168		$	14.77
Options granted		1,392,841		$	35.41
Options exercised		(736,163	)	$	9.51
Options canceled		(108,928	)	$	25.95
Balance at June 30, 2015		4,796,918		$	21.21

The estimated grant date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	Three Month Ended June 30,						Six Month Ended June 30,
	2015			2014			2015			2014
Risk-free interest rate		1.85	%		1.89	%		1.70	%		1.89	%
Expected life	6.0 years			5.8 years			6.0 years			5.9 years
Expected volatility		64	%		80	%		65	%		80	%
Dividend yield	—			—			—			—

The following table summarizes restricted stock units (RSUs) activity under our 2013 Equity Incentive Plan and related information during the six months ended June 30, 2015:

	Shares
	Subject to			Weighted-
	Outstanding			Average grant date
	RSUs			fair value per share
Balance at December 31, 2014		—		$	—
RSUs granted		182,825		$	30.22
RSUs exercised		—		$	—
RSUs canceled		(9,250	)	$	29.72
Balance at June 30, 2015		173,575		$	30.24

During the first quarter of 2015, we granted restricted stock units (RSUs) to certain employees of the Company. RSUs are share awards that entitle the holder to receive freely tradable shares of our common stock upon vesting. The RSUs cannot be transferred, and until they vest, the shares are subject to forfeiture if employment terminates prior to the release of the vesting restrictions. The RSUs, generally vest equal amounts on each of the first three year anniversaries of the grant date, provided the employee remains continuously employed with us. The fair value of the RSUs is equal to the closing price of our Common Stock on the grant date.

In January and June 2015, we granted market-based performance stock unit (PSU) awards to our executive officers. Each PSU represents a contingent right to receive one share of the Company’s Common Stock upon achievement of a market-based performance measurement and subject to the recipients continued employment. At any time during the four years following the date of the grant, a portion of the PSUs will vest one year after the date the average closing price of Portola’s stock on the NASDAQ Global Select Market is above $50.00 per share for 45 consecutive trading days, and the remaining portion of the grant will vest one year after the date the average closing price of Portola’s stock is above $60.00 per share for 45 consecutive trading days. The weighted-average fair value of the PSUs was determined using the Monte Carlo simulation models incorporating the following weighted average assumptions:

	Six Month Ended June 30, 2015
	PSUs
Number of PSUs granted		165,000
Weighted-average grant date stock price	$	31.95
Weighted-average risk-free interest rate		1.13	%
Weighted-average volatility		62	%
Dividend yield	—
Weighted- average fair value per share of PSUs granted ($50 Vesting Hurdle)	$	25.65
Weighted- average fair value per share of PSUs granted ($60 Vesting Hurdle)	$	23.24

The estimated PSU expense is being recognized, on an accelerated basis over the estimated requisite service period, with no adjustments in the future periods based upon the Company’s actual stock price over the performance period.

In June 2015, the Compensation Committee of our Board of Directors approved a program to award up to 69,625 performance-based RSUs to certain employees based on the achievement of goals related to the development of Andexanet alfa and Betrixaban. Each award represents a contingent right to receive one share of the Company’s Common Stock upon the achievement of certain performance conditions by pre-specified dates and the award recipients continued employment. At June 30, 2015 certain performance conditions related to these awards had not yet been finalized or objectively defined. Therefore, the fair value of these awards is being re-measured using the Company’s stock price at each reporting period until the time at which the performance conditions are completed or sufficiently defined. The estimated expense associated with these awards is also being recognized, on an accelerated basis, over the estimated requisite service period.

The table below sets forth the functional classification of stock-based compensation expense, net of estimated forfeitures, for the periods presented (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Research and development	$	2,542	$	1,283	$	4,751	$	2,330
Selling, general and administrative		2,216		1,140		5,180		2,396
Total stock-based compensation	$	4,758	$	2,423	$	9,931	$	4,726