8. Equity Award Plans

In April 2006, the Company’s Board of Directors adopted and the stockholders approved the 2006 Stock Option Plan (“2006 Plan”). The 2006 Plan provides for the grant of incentive stock options under the federal tax laws and nonstatutory stock options. Only employees may receive incentive stock options, but nonstatutory stock options may be granted to employees, nonemployee directors and consultants. The stock options are exercisable at a price equal to the market value of the underlying shares of common stock on the date of the grant as determined by the Company’s board of directors. The term of options granted under the 2006 Plan may not exceed ten years. Certain options are eligible for exercise prior to vesting. Exercised but unvested shares are subject to repurchase by the Company at the initial exercise price upon termination of the optionee. The proceeds from the shares subject to repurchase are classified as a liability and reclassified to equity as the shares vest. Under the 2006 Plan’s early exercise feature, the Company may have had the opportunity to repurchase 180 and 214 shares as of December 31, 2013 and 2012, respectively. The Company records cash received from the exercise of unvested stock options as a long-term liability. As of December 31, 2013 and 2012, $1,215 and $1,332, respectively, has been recorded as a long-term liability on the condensed consolidated balance sheets.

In February 2013, the Company’s Board of Directors adopted and stockholders approved the 2013 Equity Incentive Plan (“2013 Plan”), under which 4,500 shares have been reserved for issuance. Additionally, all reserved and unissued shares under the 2006 Plan at the time the 2013 Plan became effective are eligible for issuance under the 2013 Plan. The 2013 Plan became effective on March 21, 2013, at which time the Company ceased to grant equity awards under the 2006 Plan. The 2013 Equity Incentive Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance awards and stock bonuses to the Company’s employees, directors, consultants, independent contractors and advisors. On January 1 of each of the first 10 calendar years through 2023, the number of shares reserved under the 2013 Plan will automatically increase by an amount equal to 5% of the total outstanding shares as of the immediately preceding December 31, or such lesser number of shares as determined by the Company’s Board of Directors.

Under the 2006 Plan and the 2013 Plan, the term of options granted may not exceed ten years. Unless the terms of an optionee’s stock option agreement provide otherwise, if an optionee’s service relationship with the Company, or any of its affiliates, ceases for any reason other than disability or death, the optionee may exercise the vested portion of any options for three months after the date of such termination. If an optionee’s service relationship with the Company, or any of its affiliates, ceases due to disability or death (or an optionee dies within a certain period following cessation of service), the optionee or a beneficiary may exercise any vested options for a period of 12 months. In no event, however, may an option be exercised beyond the expiration of its term.

A summary of activity under the 2006 Plan and the 2013 Plan is as follows:


	Options Outstanding
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value
Balances at December 31, 2010		2,486		$	1.14		5.54	$	3,174

Options granted		1,399			2.53		7.23
Options exercised		(607	)		1.31		—
Options forfeited and cancelled		(278	)		1.65		—

Balances at December 31, 2011		3,000			1.71		6.23	$	10,575

Options granted		2,046			7.48		8.34
Options exercised		(518	)		3.23		—
Options forfeited and cancelled		(214	)		3.66		—

Balances at December 31, 2012		4,314			4.17		7.11	$	34,439

Options granted		1,594			11.98		9.26
Options exercised		(618	)		2.42		—
Options forfeited and cancelled		(435	)		8.60		—

Balances at December 31, 2013		4,855		$	6.56		7.85	$	20,593

Options exercisable as of December 31, 2013		4,067		$	5.75		7.58	$	19,974

Options vested as of December 31, 2013		2,199		$	3.32		6.78	$	15,321

Options vested and expected to vest as of December 31, 2013		4,637		$	6.40		7.80	$	20,279

The intrinsic value of options exercised during 2013, 2012 and 2011 was $5,693, $2,266, and $545, respectively. The total estimated fair value of options vested during 2013, 2011 and 2012 was $3,110, $1,572, and $559, respectively.

The following table summarizes information about shares subject to stock options outstanding as of December 31, 2013:


	Options Outstanding
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)
$0.14 – $0.82		676		4.89
$2.39 – $2.70		1,245		7.07
$5.20 – $7.55		1,381		8.40
$9.61 – $11.82		333		9.61
$12.12 – $14.18		1,220		9.11

		4,855

In February 2013, the Company’s Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (“2013 ESPP”), under which 1,000 shares have been reserved for issuance. The 2013 ESPP became effective on March 22, 2013. The 2013 ESPP provides generally for six-month purchase periods and the purchase price for shares of stock purchased under the 2013 Employee Stock Purchase Plan will be 85% of the lesser of the fair market value of the common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the applicable offering period. On January 1 of each of the first 10 calendar years following the first offering date, the number of shares reserved under the 2013 Employee Stock Purchase Plan will automatically increase by an amount equal to 1% of the total outstanding shares as of immediately preceding December 31, but not to exceed 700 shares, unless the Board of Directors, in its discretion, determines to make a smaller increase. During 2013, 146 shares were issued under the 2013 ESPP.