Stock-Based Compensation

On August 18, 2010, the Company granted equity based units to certain members of management valued on the date of grant at $1.9 million with a four year vesting period. Recipients of the equity based units have the right to receive certain distributions, if any, from the Company following return of capital to its equity members. The share based units vested upon completion of the IPO, and the remaining unrecognized compensation expense of $316,667 was recognized during the first quarter of 2014, and is included in general and administrative expense in the accompanying consolidated statement of operations.

The 2014 Long-Term Incentive Plan (“2014 Incentive Plan”), was adopted by our board of directors in January 2014. The 2014 Incentive Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted stock awards, restricted stock units and performance awards. The 2014 Incentive Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2014 Incentive Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation and provided that the rights of a holder of an outstanding award may not be impaired without the consent of the holder.

The number of shares of our common stock that may be issued under the 2014 Incentive Plan is 1,644,875 shares. To the extent that shares of the Company's common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under the 2014 Incentive Plan or any predecessor plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or the settlement of such award in cash, then such shares of common stock generally shall again be available under the 2014 Incentive Plan.

The Company has issued stock option and restricted stock unit awards under the 2014 Incentive Plan. The exercise price of stock-based awards may not be less than the market value of the Company's common stock on the date of grant. The fair value for stock options is established at the date of grant using the Black-Scholes model for time-based vesting awards. The Company's stock option and restricted stock awards typically vest over a one to three year period and expire ten years from the date of grant.

A summary of the Company’s common stock option activity as of and for the six months ended June 30, 2015 is presented below:



	Options Outstanding
		Weighted-Average
	Number of Shares	Exercise Price per share
Options outstanding at December 31, 2014	846,874	$	11.00
Options granted	—	$	—
Options forfeited	—	$	—
Options outstanding at June 30, 2015	846,874	$	11.00
Options exercisable at June 30, 2015	24,717	$	11.00

A summary of the Company’s restricted stock units as of and for the six months ended June 30, 2015 is presented below:



	Restricted Stock Units Outstanding
			Weighted-Average
			Grant-Date
	Number of Shares		Fair Value per Share
Balance outstanding at December 31, 2014	112,233		$	11.36
Restricted stock units granted	293,324		$	14.46
Restricted stock units vested	(85,386	)	$	11.48
Restricted stock units forfeited	(384	)	$	11.00
Balance outstanding at June 30, 2015	319,787		$	14.17

The expense related to the Company's stock-based compensation programs, included in general and administrative expense in the accompanying consolidated statements of operations, was as follows:



	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Expense related to:
Equity based incentive units	$	—	$	—	$	—	$	316,667
Stock options	305,506		320,125		610,288		535,172
Restricted stock units	675,359		249,117		872,439		395,779
	$	980,865	$	569,242	$	1,482,727	$	1,247,618

We used the "simplified method" to establish the expected term of the common stock options granted by the Company. Our restricted stock awards are valued based on the closing price of our common stock on the date of grant. At June 30, 2015, the amount of unearned stock-based compensation currently estimated to be expensed through 2018 related to unvested common stock options and restricted stock units is $5.7 million, net of estimated forfeitures. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is 1.5 years. If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense.