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Stock Incentive Plans | 12 Months Ended
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Dec. 31, 2015
Stock Incentive Plans. |
Stock Incentive Plans | 12. Stock Incentive Plans Prior to the Company's 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 Company's IPO. Subsequent to the Company's 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. As of December 31, 2015, the Company had reserved 1,421,672 shares of Common Stock under the 2008 Plan, of which none remained available for future issuance. As of December 31, 2015, the Company had reserved 1,135,784 shares of Common Stock under the 2015 Plan, of which 833,902 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 and restricted stock awards 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. Restricted stock issuances and early exercises of stock options are subject to a Company right of repurchase at the original issuance price, which right lapses over the vesting period of the stock. For options and restricted stock awards granted through December 31, 2015, 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, 2014 |  |  | 1,226,140 |  | $ | 4.14 |  |  | 8.15 |  | $ | 6,579 |
Granted |  |  | 606,942 |  |  | 11.42 |  |  |  |  |  |  |
Exercised |  |  | (40,548 | ) |  | 2.24 |  |  |  |  |  |  |
Cancelled or forfeited |  |  | (68,980 | ) |  | 6.49 |  |  |  |  |  |  |
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Outstanding at December 31, 2015 |  |  | 1,723,554 |  | $ | 6.66 |  |  | 7.92 |  | $ | 4,267 |
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Exercisable at December 31, 2015 |  |  | 795,501 |  | $ | 3.47 |  |  | 6.77 |  | $ | 3,562 |
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Vested or expected to vest at December 31, 2015 |  |  | 1,607,456 |  | $ | 6.40 |  |  | 7.84 |  | $ | 4,223 |
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The total intrinsic value of options exercised for the years ended December 31, 2015, 2014 and 2013 was $0.3 million, $0.6 million and $0.1 million, respectively. The total fair value of employee options vested for the years ended December 31, 2015, 2014 and 2013 was $1.4 million, $0.5 million and $0.3 million, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the years ended December 31, 2015, 2014 and 2013 was $7.68, $4.94 and $1.66, respectively. At December 31, 2015, the total unrecognized compensation expense related to unvested stock option awards, including estimated forfeitures, was $4.8 million. The Company expects to recognize that cost over a weighted-average period of approximately 2.9 years. Stock-Based Compensation Expense The fair value of stock options granted to employees and non-employees was estimated using the Black-Scholes option-pricing model based on the following assumptions:
|  | Year Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Weighted-average expected volatility |  |  | 73.6 - 86.8 | % |  | 75.2 - 83.4 | % |  | 75.0 - 81.5 | %
Expected term (in years) |  |  | 6.17 - 10.00 |  |  | 6.25 - 10.00 |  |  | 6.25 - 10.00 |
Risk free interest rate |  |  | 0.92 - 2.45 | % |  | 1.71 - 3.01 | % |  | 0.92 - 2.03 | %
Expected dividend yield |  |  | 0 | % |  | 0 | % |  | 0 | %
Volatility Due to the lack of company specific historical and implied volatility data of its Common Stock, the Company does not have relevant historical data to support its expected volatility. As such, the Company has used a weighted average of expected volatility based on the volatilities of a representative group of publicly traded biopharmaceutical companies. For purposes of identifying representative companies, the Company considered characteristics such as number of product candidates in early stages of product development, area of therapeutic focus, length of trading history, similar vesting provisions and a similar percentage of stock options that were in-the-money. The expected volatility was determined using a weighted average of the historical volatilities of the representative group of companies for a period equal to the expected term of the option grant. The Company intends to continue to consistently apply this process using the same representative companies until a sufficient amount of historical information regarding the volatility of the Company's own share price becomes available or until circumstances change, such that the identified entities are no longer representative companies. In the latter case, more suitable, similar entities whose share prices are publicly available would be utilized in the calculation. Expected Term The Company uses the "simplified method" to estimate the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term (ten years) and the vesting term (generally four years) of the Company's stock options, taking into consideration multiple vesting tranches. The Company utilizes this method due to lack of historical exercise data and the plain-vanilla nature of the Company's share-based awards. Risk-Free Rate The risk-free rate was based on the yield curve of U.S. Treasury securities with periods commensurate with the expected term of the options being valued. Forfeitures The Company is also required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from its estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. To the extent that actual forfeitures differ from the Company's estimates, the difference is recorded as a cumulative adjustment in the period the estimates are revised. 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 Company's 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. As of December 31, 2015, there had been no activity under the 2015 ESPP.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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