15. Equity Incentive Plans

The Company adopted its 2009 Common Unit Plan effective December 8, 2009, which is administered by the board of directors. Under the plan, employees, consultants and non-employee directors are eligible for equity incentives, including grants of options to purchase the Company’s common stock or restricted stock bonuses or restricted stock purchase rights and deferred stock awards, subject to terms and conditions determined by the board of directors. The term of options shall not exceed ten years from the date of grant. Restricted stock purchase rights shall be exercisable within a period established by the board of directors, which shall in no event exceed thirty days from the effective date of the grant. As of December 31, 2013, an aggregate maximum of 5,221 thousand shares were authorized and 553 thousand shares were reserved for all future grants.

Stock options are generally granted with exercise prices of no less than the fair market value of the Company’s common stock on the grant date. The requisite service period, or the period during which a grantee is required to provide service in exchange for option grants, coincides with the vesting period. The stock options vest over three years following grant, with 34% of the common stock vesting and becoming exercisable on the first anniversary of grant date and 8% or 9% of the common stock subject to the options vesting on completion of each three-month period thereafter.

The purchase price for shares issuable under each restricted stock purchase right shall be established by the board of directors in its discretion. No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving shares pursuant to a restricted stock bonus, the consideration for which shall be services actually rendered to a participating company or for its benefit. Stock issued pursuant to any restricted stock award may (but need not) be made subject to vesting conditions based upon the satisfaction of such service requirements, conditions, restrictions or performance criteria as shall be established by the board of directors and set forth in the award agreement evidencing such award. During any period in which stock acquired pursuant to a restricted stock award remain subject to vesting conditions, such stock may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than pursuant to an ownership change event or transfer by will or the laws of descent and distribution. The grantee shall have all of the rights of a stockholder of the Company holding stock, including the right to vote such stock and to receive all dividends and other distributions paid with respect to such stock; provided, however, that if so determined by the board of directors and provided by the award agreement, such dividends and distributions shall be subject to the same vesting conditions as the stock subject to the restricted stock award with respect to which such dividends or distributions were paid. If a grantee’s service terminates for any reason, whether voluntary or involuntary (including the grantee’s death or disability), then (a) the Company (or its assignee) has the option to repurchase for the purchase price paid by the grantee any stock acquired by the grantee pursuant to a restricted stock purchase right which remain subject to vesting conditions as of the date of the grantee’s termination of service and (b) the grantee shall forfeit to the Company any stock acquired by the grantee pursuant to a restricted stock bonus which remain subject to vesting conditions as of the date of the grantee’s termination of service. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company.

No monetary payment (other than applicable tax withholding, if any) is required as a condition of receiving a deferred stock award, the consideration for which shall be services actually rendered to a participating company or for its benefit. Deferred stock awards may (but need not) be made subject to vesting conditions based upon the satisfaction of such service requirements, conditions, restrictions or performance criteria as shall be established by the Compensation Committee and set forth in the award agreement evidencing such award. Grantees have no voting rights with respect to stock represented by deferred stock awards until the date of the issuance of such stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). If a grantee’s service terminates for any reason, whether voluntary or involuntary (including the grantee’s death or disability), then the grantee shall forfeit to the Company any deferred stock pursuant to the award which remain subject to vesting conditions as of the date of the grantee’s termination of service, and, in the event of the grantee’s termination for cause, such deferred stock award to the extent not yet settled. The Company shall issue to a grantee on the date on which deferred stock subject to the grantee’s deferred stock award vest or on such other date determined by the board of directors, in its discretion, and set forth in the award agreement one share (and/or any other new, substituted or additional securities or other property) for each deferred stock then becoming vested or otherwise to be settled on such date, subject to the withholding of applicable taxes, if any.

The following summarizes stock option and restricted stock bonus activities for the years ended December 31, 2013, 2012 and 2011 after giving effect to the corporate conversion. At the date of grant, all options had an exercise price above the fair value of common stock:


	Number of Restricted Stock Bonuses			Number of Options			Weighted Average Exercise Price of Stock Options		Aggregate Intrinsic Value of Stock Options		Weighted Average Remaining Contractual Life of Stock Options
Outstanding at January 1, 2011		291,061			1,957,760		$	6.32		14,158		9.0 years
Granted		—			181,125			11.68		—		—
Released from restriction		(287,596	)		—			—		—		—
Forfeited		(3,465	)		(39,920	)		8.37		—		—
Exercised		—			(90,005	)		5.88		—		—

Outstanding at December 31, 2011		—			2,008,960		$	6.79		2,773		8.1 years

Vested and expected to vest at December 31, 2011 (As Restated)		—			1,974,611			6.75		2,742		8.1 years
Exercisable at December 31, 2011 (As Restated)		—			1,212,445			6.37		1,819		8.1 years

Outstanding at January 1, 2012		—			2,008,960			6.79		2,773		8.1 years
Granted		—			1,319,500			8.29		—		—
Forfeited		—			(95,271	)		11.07		—		—
Exercised		—			(155,708	)		5.88		—		—

Outstanding at December 31, 2012		—			3,077,481			7.35		26,385		7.9 years

Vested and expected to vest at December 31, 2012 (As Restated)		—			3,021,937			7.32		25,988		7.9 years
Exercisable at December 31, 2012 (As Restated)		—			1,726,891			6.54		16,203		7.0 years

Outstanding at January 1, 2013		—			3,077,481			7.35		26,385		7.9 years
Granted		—			455,000			17.08
Forfeited		—			(8,360	)		10.89
Exercised		—			(579,476	)		7.44

Outstanding at December 31, 2013		—			2,944,645			8.82		31,558		7.3 years

Vested and expected to vest at December 31, 2013		—			2,916,184			8.78		31,376		7.3 years
Exercisable at December 31, 2013		—			1,946,475			7.00		24,325		6.7 years

Total compensation expenses recorded for the stock options were $2,213 thousand and $2,389 thousand for the years ended December 31, 2013 and 2012, respectively, and for the restricted stock bonuses and stock options were $882 thousand and $1,334 thousand for the year ended December 31, 2011, respectively. As of December 31, 2013, there was $1,357 thousand of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average future period of 0.7 year. Total fair values of restricted stock bonuses released from restriction were $1,818 thousand for the year ended December 31, 2011. Total fair value of options vested were $1,746 thousand, $1,515 thousand and $1,565 thousand for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company utilizes the Black-Scholes option-pricing model to measure the fair value of each option grant. The following summarizes the grant-date fair value of options granted for the years ended December 31, 2013, 2012 and 2011 and assumptions used in the Black-Scholes option-pricing model on a weighted average basis:


	Year Ended December 31,
	2013			2012 (As Restated)			2011 (As Restated)
Grant-date fair value of option	$	4.30		$	2.70		$	4.12
Expected term		2.8 Years			3.0 Years			3.0 Years
Risk-free interest rate		0.4	%		0.4	%		0.9	%
Expected volatility		37.6	%		48.8	%		52.2	%
Expected dividends		—			—			—

The number and weighted average grant-date fair value of the unvested stock options are as follows:


	Year Ended December 31,
	2013					2012 (As Restated)					2011 (As Restated)
	Number			Weighted Average Grant- Date Fair Value		Number			Weighted Average Grant- Date Fair Value		Number			Weighted Average Grant- Date Fair Value
Unvested options at the beginning of the period		1,350,590		$	2.79		796,514		$	2.60		1,327,825		$	2.37
Granted options during the period		455,000			4.30		1,319,500			2.70		181,125			4.12
Vested options during the period		(651,530	)		2.68		(654,022	)		2.32		(637,940	)		2.51
Forfeited options during the period		(7,106	)		3.92		(74,335	)		4.02		(37,215	)		2.99
Exercised options during the period		(148,784	)		2.46		(37,067	)		1.87		(37,281	)		2.11

Unvested options at the end of the period		998,170		$	3.69		1,350,590		$	2.79		796,514		$	2.60