10.Stock Incentive Plans

Prior to the IPO, the Company granted awards to eligible participants under its 2008 Equity Incentive Plan (“2008 Plan”). In May 2015, the Company’s board of directors adopted and, in June 2015, the Company’s stockholders approved the 2015 Stock Incentive Plan (“2015 Plan”), which became effective immediately prior to the effectiveness of the IPO. Subsequent to the IPO, option grants are awarded to eligible participants only under the 2015 Plan.

The 2015 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards under the 2015 Plan. The maximum number of shares of Common Stock that may be delivered in satisfaction of awards under the 2015 Plan is 1,068,287 shares, plus (1) 25,942 shares that were available for grant under the 2008 Plan immediately prior to the closing of the IPO, (2) the number of shares of Common Stock subject to outstanding awards under the 2008 Plan upon closing of the IPO that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right and (3) an annual increase, to be added the first day of each fiscal year, beginning with the fiscal year ending December 31, 2016 and continuing until, and including, the fiscal year ending December 31, 2025, equal to the lowest of 1,297,334 shares of Common Stock, 4% of the number of shares of Common Stock outstanding on the first day of the fiscal year and an amount determined by the Company’s board of directors. The January 1, 2016 increase added 612,531 authorized shares to the 2015 Plan.

As of September 30, 2016, the Company had reserved 1,230,321 shares of Common Stock under the 2008 Plan, of which none remained available for future issuance. As of September 30, 2016, the Company had reserved 1,887,934 shares of Common Stock under the 2015 Plan, of which 631,846 shares remained available for future issuance. Under the 2015 Plan, stock options may not be granted with exercise prices at less than fair value on the date of the grant.

Terms of stock option agreements, including vesting requirements, are determined by the Company’s board of directors, subject to the provisions of the applicable stock incentive plan. Options granted by the Company generally vest ratably over four years, with a one-year cliff, and options are exercisable from the date of grant for a period of ten years. For options granted through September 30, 2016, the exercise price or purchase price, as applicable, equaled the estimated fair value of the Common Stock as determined by the Company’s board of directors on the date of grant.

A summary of the Company’s stock option activity and related information for employees and nonemployees follows:

	Shares		Weighted- Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2015	1,723,554		$	6.66	7.92	$	4,267
Granted	1,043,045		4.47
Exercised	(51,732	)	1.98
Cancelled or forfeited	(228,458	)	6.59

Outstanding at September 30, 2016	2,486,409		$	5.84	8.14	$	4,037

Exercisable at September 30, 2016	978,785		$	4.93	6.53	$	2,327

Vested or expected to vest at September 30, 2016	2,378,562		$	5.83	8.09	$	3,902

The total intrinsic value of options exercised for the three months ended September 30, 2016 and 2015 was $30,000 and $0, respectively. The total intrinsic value of options exercised for the nine months ended September 30, 2016 and 2015 was $0.2 million and $0.2 million, respectively. The total fair value of employee and non-employee options vested for the three months ended September 30, 2016 and 2015 was $0.8 million and $0.3 million, respectively. The total fair value of employee and non-employee options vested for the nine months ended September 30, 2016 and 2015 was $1.9 million and $1.1 million, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the three months ended September 30, 2016 and 2015 was $2.84 and $9.13, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the nine months ended September 30, 2016 and 2015 was $2.88 and $7.77, respectively.

At September 30, 2016, the total unrecognized compensation expense related to unvested stock option awards, including estimated forfeitures, was $5.4 million. The Company expects to recognize that cost over a weighted-average period of approximately 2.7 years.

Employee Stock Purchase Plan

In June 2015, the Company’s board of directors adopted and the Company’s stockholders approved the 2015 Employee Stock Purchase Plan (the “2015 ESPP”) which became effective upon closing of the IPO. The 2015 ESPP initially authorizes the issuance of up to a total of 182,352 shares of Common Stock to participating eligible employees. The number of authorized shares increases each January 1, commencing on January 1, 2016 and ending on December 31, 2026, by an amount equal to the lesser of one percent of the Company’s outstanding shares as of the first day of the applicable year, 364,705 shares and any lower amount determined by the Company’s board of directors. The January 1, 2016 increase added 153,132 authorized shares to the plan. As of September 30, 2016, there had been no shares issued under the 2015 ESPP.