Stock-Based Compensation

In March 2014, the Company's board of directors approved the 2014 Equity Incentive Plan, or 2014 Plan, under which stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards may be granted to employees, consultants and directors. Shares of common stock that are issued and available for issuance under the 2014 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof.

A total of 1,850 shares of the Company's common stock was initially authorized and reserved for issuance under the 2014 Plan. This reserve will automatically increase on January 1, 2015 and each subsequent anniversary through 2024, by an amount equal to the smaller of (a) 4.5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Company's board of directors. This reserve is automatically increased to include any outstanding shares under the Company's 2007 Stock Plan, or 2007 Plan, at the time of its termination or issuable upon expiration or termination of options granted under the Company's 2007 Plan that expire or terminate without having been exercised in full. Pursuant to the terms of the 2014 Plan, 107 shares available for future issuance under the 2007 Plan were transferred to the 2014 Plan, providing a total of 1,957 shares of common stock allocated for issuance under the 2014 Plan. In addition, 40 shares have been returned to the 2014 Plan as a result of termination of options that expired or terminated without having been exercised under the previously terminated 2007 Plan, resulting in a total of 1,997 shares available for issuance under the 2014 Plan. As of September 30, 2014, options to purchase a total of 505 shares of common stock have been granted under the 2014 Plan, 4 shares have been returned to the 2014 Plan as a result of termination of options that expired or terminated without having been exercised, and 1,496 shares of common stock remain available for future issuance under the 2014 Plan.

In July 2007, the Company adopted the 2007 Plan under which options or stock purchase rights may be granted to employees, consultants and directors. In February 2014, the board of directors, under the authority granted to it by the 2007 Plan, increased the number of shares available to be granted under the plan by 1,400 shares, and as of September 30, 2014, a total of 9,182 shares of common stock were allocated for issuance under the plan. Upon the completion of the Company's IPO in March 2014, the board of directors terminated the 2007 Plan in connection with the IPO and pursuant to the terms of the 2014 Plan, 107 shares that were available for future issuance under the 2007 Plan at such time were transferred to the 2014 Plan. No shares remain available for future issuance of awards under the 2007 Plan. The 2007 Plan will continue to govern the terms and conditions of all outstanding equity awards granted under the 2007 Plan. Shares of common stock that are issued and were available for issuance under the 2007 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof.

The following summarizes the assumptions used for estimating the fair value of stock options granted during the periods indicated:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Risk-free interest rate	1.6%	1.3%	1.2 - 2.0%	0.7 - 1.3%
Expected life (in years)	4.8	4.8	3.8 - 6.3	4.8
Expected volatility	46.5%	46.8%	45.1 - 46.8%	46.8 - 49.4%
Dividend yield	—	—	—	—
Weighted-average grant date fair value per share	$6.20	$3.17	$5.55	$3.09

Stock option activity during the nine months ended September 30, 2014 was as follows:



	Number of Options		Weighted Average Exercise Price
Balance as of January 1, 2014	5,422		$	2.76
Granted	2,258		9.80
Exercised	(1,081	)	0.97
Forfeited	(48	)	7.22
Balance as of September 30, 2014	6,551		$	5.45

The summary of stock options outstanding as of September 30, 2014 is as follows:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
$0.29 - $0.35	1,135	$	0.32	3.4	1,135	$	0.32	3.4
$0.54 - $0.84	592	0.74		5.3	586	0.74		5.3
$1.74 - $3.10	1,181	2.80		7.1	884	2.73		7.1
$4.00 - $7.82	1,406	6.88		5.9	477	6.20		5.9
$8.35	1,737	8.35		6.3	—	—		—
$13.00 - $15.50	500	14.82		6.8	14	13.00		6.5
	6,551	$	5.45	5.8	3,096	$	2.05	5.2

The aggregate intrinsic value of stock options exercised during each of the three months ended September 30, 2014 and 2013 was $1.4 million and less than $0.1 million, respectively. The aggregate intrinsic value of stock options exercised during each of the nine months ended September 30, 2014 and 2013 was $9.1 million and $4.4 million, respectively. The total fair value of stock options vested during each of the three months ended September 30, 2014 and 2013 was $0.5 million and $0.5 million, respectively. The total fair value of stock options vested during each of the nine months ended September 30, 2014 and 2013 was $1.3 million and $1.1 million, respectively. As of September 30, 2014, total unrecognized stock-based compensation expense, adjusted for estimated forfeitures, related to stock options was $14.5 million, which the Company expects to recognize over the next 3.2 years.