8.	Stock-based Compensation

2009 Stock Option Plan

The Company has a share-based compensation plan (the “2009 Stock Option Plan”) under which the Company may grant options to purchase shares of common stock to employees, directors, and consultants as either incentive stock options or nonqualified stock options. Incentive stock options may be granted with exercise prices not less than 100% to 110% of the fair market value of the common stock. Options granted under the plan generally vest over three to four years and expire in 10 years from the date of grant.

The compensation cost that has been charged against income for stock awards under 2009 Stock Option Plan for the three months ended March 31, 2014 and 2013 was $110 and $42, respectively. The total income tax benefit recognized in the statements of operations for share-based compensation arrangements was $0 for the three months ended March 31, 2014 and 2013. Cash received or receivable from options exercised was $5 and $5 for the three months ended March 31, 2014 and the year ended December 31, 2013, respectively.

Stock-based compensation expense related to stock options is included in the following line items in the accompanying statements of operations:


	Three Months Ended March 31,
	2014		2013
Cost of revenue	$	13	$	11
Research and development		62		7
Selling, general and administrative		35		24

	$	110	$	42

2014 Equity Incentive Plan

In February 2014, the Company’s board of directors adopted the 2014 Equity Incentive Plan, which was subsequently ratified by its stockholders and became effective on May 2, 2014 (the “Effective Date”). The 2014 Equity Incentive Plan is the successor to and continuation of the 2009 Stock Option Plan. On the effective date, no additional awards will be granted under the 2009 Stock Option Plan, and all stock awards granted under the 2009 Stock Option Plan will remain subject to the terms of the 2009 Stock Option Plan. All awards granted on and after the effective date will be subject to the terms of the 2014 Equity Incentive Plan. The 2014 Equity Incentive Plan provides for the grant of the following awards: (i) incentive Stock Options, (ii) nonstatutory stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards, and (vi) other stock awards. Employees, directors, and consultants are eligible to receive awards.

Under the 2014 Equity Incentive Plan, the aggregate number of shares of common stock that may be issued from and after the effective date (or the “share reserve”) will not exceed the sum of 257,352 new shares, the shares that represented the 2009 Stock Option Plan’s available reserve on the effective date, and any returning shares from the 2009 Stock Option Plan. The share reserve will automatically increase on January 1^st of each year, for a period of not more than ten years, commencing on January 1, 2015 and ending on January 1, 2024, in an amount equal to 4.0% of the total number of shares of Capital Stock outstanding on December 31^st of the preceding calendar year. The board of directors may act prior to January 1^st of a given year to provide that there will be no increase in the share reserve or that the increase will be a lesser number of shares than would otherwise occur.

2014 Employee Stock Purchase Plan

In February 2014, the Company’s board of directors adopted the 2014 Employee Stock Purchase Plan (“ESPP”), which was subsequently ratified by the Company’s stockholders and became effective on May 2, 2014. The purpose of the ESPP is to provide means by which eligible employees and certain designated related corporations may be given an opportunity to purchase shares of the Company’s common stock, and to seek and retain services of new and existing employees and to provide incentives for such persons to exert maximum efforts for the success of the Company. Common stock that may be issued under the ESPP will not exceed 47,794 shares, plus the number of shares of common stock that are automatically added on January 1^st of each year for a period of ten years, commencing on January 1, 2015 and ending on January 1, 2024, in an amount equal to the lesser of (i) 0.8% of the total number of shares of outstanding common stock on December 31 of the preceding calendar year, and (ii) 29,411 shares of common stock. Similar to the 2014 Equity Incentive Plan, the board of directors may act prior to January 1^st of a given year to provide that there will be no increase in the share reserve or that the increase will be a lesser number of shares than would otherwise occur. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code.