8. Stock Based Compensation

In January 2013, our Board of Directors adopted our 2013 Equity Incentive Plan (the “2013 Plan”), which became effective upon of the closing of our initial public offering in May 2013. On January 1, 2016, 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, 2015. As of June 30, 2016 there were 12,205,425 shares reserved under the 2013 Plan for the future issuance of equity awards.

Stock Options

The following table summarizes stock option activity under our 2013 Plan and related information during the six months ended June 30, 2016:

	Shares
	Subject to			Weighted-
	Outstanding			Average Exercise
	Options			Price Per Share
Balance at December 31, 2015		4,731,483		$	24.19
Options granted		1,465,086		$	29.82
Options exercised		(16,330	)	$	14.23
Options canceled		(210,869	)	$	28.59
Balance at June 30, 2016		5,969,370		$	25.44

Performance stock options (“PSOs”)

In May 2016, the Compensation Committee of our Board of Directors approved the commencement of granting performance stock option awards to our executive and senior officers. PSOs represent a contingent right to purchase our Common Stock upon achievement of specified conditions. The PSOs granted in May 2016 will vest upon the achievement of certain regulatory and manufacturing goals related to our lead programs. As of June 30, 2016, there was $3.1 million of unrecognized compensation costs related to these PSOs, which is expected to be recognized over an estimated weighted-average period of 1.7 years.

The following table summarizes PSO activity under our 2013 Plan and related information during the six months ended June 30, 2016:

	Shares
	Subject to		Weighted-
	Outstanding		Average Exercise
	Options		Price Per Share
Balance at December 31, 2015		—	$	—
Options granted		271,122	$	23.76
Options exercised		—	$	—
Options canceled		—	$	—
Balance at June 30, 2016		271,122	$	23.76

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 Months Ended June 30,			Six Months Ended June 30,
	2016	2015		2016	2015
Risk-free interest rate
Stock options	1.01% - 1.53%		1.85%	1.01% - 1.67%		1.70%
Performance stock options	1.34% - 1.50%	—		1.34% - 1.50%	—
Expected life
Stock options	5.0 years - 6.1 years	6.0 years		5.0 years - 7.0 years	6.0 years
Performance stock options	5.4 years - 6.4 years	—		5.4 years - 6.4 years	—
Expected volatility
Stock options	64% to 66%		64%	62% - 67%		65%
Performance stock options	65% to 66%	—		65% to 66%	—
Dividend yield
Stock options	—	—		—	—
Performance stock options	—	—		—	—

Restricted stock units (“RSUs”)

In January 2015, the Compensation Committee of our Board of Directors approved the commencement of granting restricted stock units, to our employees. RSUs are share awards that entitle the holder to receive freely tradable shares of our Common Stock upon vesting.

The following table summarizes RSU activity, under our 2013 Plan and related information:

	Shares
	Subject to			Weighted-
	Outstanding			Average grant date
	RSUs			fair value per share
Balance at December 31, 2015		167,750		$	30.86
RSUs granted		495,806		$	28.01
RSUs released		(55,195	)	$	30.88
RSUs canceled		(22,372	)	$	30.62
Balance at June 30, 2016		585,989		$	28.46

Performance stock units (“PSUs”)

In January 2015, the Compensation Committee of our Board of Directors approved the commencement of granting performance stock units, to our employees. PSUs are share awards that entitle the holder to receive freely tradable shares of our Common Stock upon achievement of specified conditions. In January 2016, the Compensation Committee of our Board of Directors approved a program to award up to 102,906 PSUs to the management team based on the achievement of certain commercial and regulatory goals related to andexanet alfa and betrixaban, respectively. As of June 30, 2016, there was $3.4 million of unrecognized compensation costs related to these PSUs, which is expected to be recognized over an estimated weighted-average period of 1.2 years.

The following table summarizes PSU activity, under our 2013 Plan and related information:

	Shares
	Subject to			Weighted-
	Outstanding			Average grant date
	PSU's			fair value per share
Balance at December 31, 2015		205,261		$	29.33
PSUs granted		102,906			33.49
PSUs released		(13,170	)		50.00
PSUs canceled		(4,241	)		48.31
Balance at June 30, 2016		290,756			29.59

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,
	2016		2015		2016		2015
Research and development	$	3,066	$	2,542	$	6,096	$	4,751
Selling, general and administrative		4,556		2,216		8,595		5,180
Total stock-based compensation	$	7,622	$	4,758	$	14,691	$	9,931