11. Stockholder’s Equity

Warrants

In 2010, the Company issued warrants to purchase 1,481,055 shares of common stock for $14.00 per share. The warrants to purchase shares could be exercised from January 26, 2011 to the maturity on October 28, 2015. The warrants could be exercised on a cashless basis whereby a portion of the exercised warrants are tendered in lieu of payment for the exercise price. During the years ended December 31, 2015, 2014 and 2013, warrants were exercised on a cashless basis resulting in the issuance of 228,316, 73,422 and 117,784 shares of common stock, respectively. In addition, during the year ended December 31, 2015, another 490,759 warrants were exercised for cash consideration of $6.9 million.

Equity Incentive Plan

The Compensation Committee of the Company’s Board of Directors may grant awards under the Company’s equity incentive plan in the form of incentive stock options, non‑qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock‑based awards. The maximum number of shares issuable under the equity incentive plan is 1,400,000 shares with 767,000 shares remaining to be issued at December 31, 2015. All grants under the equity incentive plan will be issued at the fair value of the Company’s common stock on date of grant.

As of December 31, 2015, all awards were restricted stock units.

Restricted Stock Units

Restricted stock units are generally subject to forfeiture if employment terminates prior to release of the restrictions. The Company expenses the cost of restricted stock units, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse.

Restricted stock units have service, performance and market conditions for vesting. Those with service conditions vest in equal installments on each of the first through fourth anniversaries of the date of grant except for those granted to directors which vest over one year. Those with performance and market conditions vest in installments over four years based on the achievement of goals established by the Compensation Committee of the Company’s Board of Directors.

Activity with respect to outstanding restricted stock units for the years ended December 31, 2015, 2014 and 2013 was as follows:


		Weighted-
		Average
		Grant-Date
	Shares	Fair Value
Nonvested at January 1, 2013	223,224	$	15
Granted	181,330		20
Vested	(120,902)		15
Forfeited	(22,918)		17
Nonvested at December 31, 2013	260,734		18
Granted	155,146		31
Vested	(157,794)		21
Forfeited	(12,334)		25
Nonvested at December 31, 2014	245,752		27
Granted	140,909		26
Vested	(110,623)		28
Forfeited	(101,520)		26
Nonvested at December 31, 2015	174,518	$	26

As of December 31, 2015, there was $3.0 million of unrecognized share-based compensation expense related to nonvested restricted stock unit awards expected to vest. The cost is expected to be recognized over a weighted-average period of two years.

The Company recognized compensation expense of $1.6 million, $4.2 million and $2.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. For the year ended December 31, 2015, the Company had granted restricted stock units with market conditions. The Company valued those units for expense recognition purposes using a Monte Carlo simulation model with an expected volatility for the Company’s shares of 21.7%, a risk free return of 0.70% and no expected dividends.

The fair value as of the vesting date for the restricted stock units that vested during the years ended December 31, 2015, 2014 and 2013 was $2.6 million, $3.9 million and $2.5 million, respectively. Upon vesting, unit holders have the option to net share-settle to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. The total shares withheld were 36,592, 53,775 and 34,730 for the years ended December 31, 2015, 2014 and 2013, respectively, and were based on the value of the restricted stock units as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to the tax authorities was $0.9 million, $1.5 million and $0.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. Other than reimbursements for tax withholdings, there was no cash received under all share-based arrangements. In 2014, the terms of certain restricted stock units were modified which resulted in the restricted stock units vesting as of the date of the modification. The Company recognized the incremental value of $0.6 million as additional expense in 2014.