13. Equity Incentive Plans

The Company adopted its 2009 Common Unit Plan, or the 2009 Plan, effective December 8, 2009, which is administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). The 2009 Plan terminated immediately following the Company’s corporate conversion in March 2011, and no additional options or other equity awards may be granted under the 2009 Plan. However, options granted under the 2009 Plan prior to its termination will remain outstanding until they are either exercised or expire. The Company adopted its 2011 Equity Incentive Plan, or the 2011 Plan, in March 2010. The Company amended and restated the 2011 Plan in February 2011, and the Company’s stockholders approved the amendment in March 2011 to reflect that it became effective in 2011 upon the Company’s corporate conversion in March 2011. Awards may be granted under the 2011 Plan to the Company’s employees, including officers, directors, or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. While the Company may grant incentive stock options only to employees, the Company may grant nonstatutory stock options, stock appreciation rights, restricted stock purchase rights or bonuses, restricted stock units, performance shares, performance units and cash-based awards or other stock-based awards to any eligible participant, subject to terms and conditions determined by the Compensation Committee. 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 Compensation Committee, which shall in no event exceed thirty days from the effective date of the grant. As of December 31, 2014, an aggregate maximum of 5,902 thousand shares were authorized and 955 thousand shares were reserved for all future grants.

Stock options and stock appreciation rights must have exercise prices at least equal to the fair market value of the stock at the time of their grant pursuant to the 2011 Plan. 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 typically 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 Compensation Committee 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 Compensation Committee 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 Compensation Committee 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 has 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.

The following summarizes stock option and restricted stock bonus activities for the years ended December 31, 2014, 2013 and 2012 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 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, 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		3,021,937			7.32		25,988		7.9 years
Exercisable at December 31, 2012		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

Outstanding at January 1, 2014		2,944,645		$	8.82		31,558		7.3 years
Granted		310,000			16.75		—		—
Forfeited		(31,905	)		8.34		—		—
Exercised		(6,795	)		7.03		—		—

Outstanding at December 31, 2014		3,215,945		$	9.60		39,615		6.6 years

Vested and expected to vest at December 31, 2014		3,204,967			9.58		39,610		6.6 years
Exercisable at December 31, 2014		2,760,402			8.70		39,187		6.3 years

Total compensation expenses recorded for the stock options were $2,072 thousand, $2,213 thousand and $2,389 thousand for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, there was $636 thousand of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average future period of 0.8 year. Total fair value of options vested were $2,957 thousand, $1,746 thousand and $1,515 thousand for the years ended December 31, 2014, 2013 and 2012, 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, 2014, 2013 and 2012 and assumptions used in the Black-Scholes option-pricing model on a weighted average basis:


	Year Ended December 31,
	2014			2013			2012
Grant-date fair value of option	$	4.10		$	4.30		$	2.70
Expected term		2.7 Years			2.8 Years			3.0 Years
Risk-free interest rate		0.7	%		0.4	%		0.4	%
Expected volatility		36.7	%		37.6	%		48.8	%
Expected dividends		—			—			—

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


	Year Ended December 31,
	2014					2013					2012
	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		998,170		$	3.69		1,350,590		$	2.79		796,514		$	2.60
Granted options during the period		310,000			4.10		455,000			4.30		1,319,500			2.70
Vested options during the period		(819,818	)		3.61		(651,530	)		2.68		(654,022	)		2.32
Forfeited options during the period		(31,905	)		3.20		(7,106	)		3.92		(74,335	)		4.02
Exercised options during the period		(904	)		3.16		(148,784	)		2.46		(37,067	)		1.87

Unvested options at the end of the period		455,543		$	4.18		998,170		$	3.69		1,350,590		$	2.79