14. Stock Option and Compensation Plans

The Company adopted its 2007 Stock Incentive Plan (the “2007 Plan”) for employees, directors and consultants for the purpose of advancing the interests of the Company stockholders by enhancing its ability to attract, retain and motivate persons who are expected to make important contributions to the Company. The 2007 Plan provided for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. Following the effectiveness of the 2013 Stock Incentive Plan described below in connection with the closing of the Company’s initial public offering, the Company is no longer granting additional awards under the 2007 Plan.

In August 2013, the Company’s board of directors adopted and the Company’s stockholders approved the 2013 stock incentive plan (the “2013 Plan”), which became effective immediately prior to the closing of the Company’s initial public offering. The 2013 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock-based awards. Upon effectiveness of the 2013 Plan, the number of shares of the Company’s common stock that were reserved for issuance under the 2013 Plan was the sum of (1) such number of shares (up to approximately 3,359,641 shares) as is equal to the sum of 739,317 shares (the number of shares of the common stock then available for issuance under the 2007 Plan), and such number of shares of the Company’s common stock that are subject to outstanding awards under the 2007 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (2) an annual increase, to be added the first business day of each fiscal year, beginning with the fiscal year ending December 31, 2014 and continuing until, and including, the fiscal year ending December 31, 2023, equal to the lowest of 2,542,372 shares of the Company’s common stock, 4% of the number of shares of the Company’s common stock outstanding on the first day of the fiscal year and an amount determined by its board of directors. The Company’s employees, officers, directors, consultants and advisors are eligible to receive awards under the 2013 Plan. However, incentive stock options may only be granted to employees of the Company.

In connection with the evergreen provisions of the 2013 Plan, the number of shares available for issuance under the 2013 Plan was increased by approximately 1,257,000 shares, effective as of January 1, 2014. As of December 31, 2014, the Company had approximately 479,000 shares available for grant under the 2013 Plan. In connection with the evergreen provisions of the 2013 Plan, the number of shares available for issuance under the 2013 Plan was further increased by approximately 1,360,000 shares, effective as of January 1, 2015.

A summary of the stock option activity, weighted average exercise prices, options outstanding and exercisable as of December 31, 2014, 2013 and 2012 is as follows:

	Year ended December 31,
	2014				2013				2012
	Common Stock Options		Weighted Average Exercise Price		Common Stock Options		Weighted Average Exercise Price		Common Stock Options		Weighted Average Exercise Price
Outstanding at beginning of year:	2,708		$	9.41	1,344		$	1.65	1,113		$	1.30
Granted	1,744		$	33.92	1,583		$	14.82	250		$	3.12
Exercised	(621	)	$	4.75	(151	)	$	0.61	(19	)	$	0.12
Expired or forfeited	(151	)	$	28.50	(68	)	$	1.53	—		—

Outstanding at end of year:	3,680		$	21.03	2,708		$	9.41	1,344		$	1.65

	Year ended December 31,
	2014		2013		2012
Options exercisable at end of year	993		984		823
Weighted average grant date fair value (per share) of options granted during the period	$	24.41	$	10.48	$	1.65

			As of December 31, 2014
			Options Outstanding			Options Exercisable
Range of Exercise Prices	Total Options Outstanding		Weighted Average Remaining Life (Years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.12 - $10.03	1,243		7.1	$	5.67	761		$	3.66
$10.04 - $20.00	534		8.5	$	13.38	132		$	13.39
$20.01 - $30.00	179		8.8	$	25.64	46		$	25.43
$30.00 - $43.90	1,724		9.2	$	34.00	54		$	34.79

	3,680			$	21.03	993		$	7.65

Aggregate Intrinsic Value	$	87,728				$	36,965

Cash proceeds from, and the aggregate intrinsic value of, stock options exercised during the years ended December 31, 2014, 2013 and 2012, respectively, were as follows:

	Year ended December 31,
	2014		2013		2012
Cash Proceeds from options exercised	$	2,949	$	94	$	2
Aggregate intrinsic value of options exercised	$	21,646	$	4,545	$	28

In connection with stock option awards granted to employees, the Company recognized share-based compensation expense approximately $11.3 million, $2.2 million, and $0.5 million, for the years ended December 31, 2014, 2013, and 2012, respectively, net of expected forfeitures. As of December 31, 2014, there was approximately $37.8 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option awards to employees, which are expected to be recognized over a remaining weighted average period of 3.1 years.

In connection with stock options awards granted to consultants, the Company recognized approximately $1.4 million, $0.7 million and $0.1 million in share-based compensation expense during the years ended December 31, 2014, 2013 and 2012, respectively, net of expected forfeitures. As of December 31, 2014, there was approximately $4.1 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option award granted to consultants which are expected to be recognized over a remaining weighted average period of 2.9 years.

As of December 31, 2014, the Company had approximately 37,000 restricted stock units outstanding. In connection with restricted stock units granted to employees, the Company recognized share-based compensation of approximately $0.3 million during the year ended December 31, 2014, net of expected forfeitures. The Company did not recognize any share-based compensation expense related to restricted stock units during year ended December 31, 2013. As of December 31, 2014, there was approximately $0.9 million of unrecognized compensation costs, net of estimated forfeitures, related to restricted stock units granted to employees to be recognized over a remaining weighted average period of 2.4 years.

On September 30, 2014, the Company issued to an employee an option to purchase 200,000 shares of its common stock at an exercise price of $38.93 per share. This option grant was an inducement grant issued outside the Company’s existing equity compensation plan in accordance with NASDAQ listing rule 5635(c)(4).

On October 3, 2014, the Company issued to an employee an option to purchase 150,000 shares of its common stock at an exercise price of $38.41 per share. This option grant was an inducement grant issued outside the Company’s existing equity compensation plan in accordance with NASDAQ listing rule 5635(c)(4).