| Stock Incentive Plan | 9.
STOCK INCENTIVE PLAN
The Company has three equity incentive plans. One was adopted in
2004 (2004 Plan) and provided for the granting of stock options and
restricted stock awards and generally prescribed a contractual term
of seven years. The 2004 Plan terminated in August 2010. However,
grants made under the 2004 Plan are still governed by that plan. As
of September 30, 2018, options to purchase 23,954 shares of
common stock at a weighted average exercise price of $3.24 per
share remained outstanding under the 2004 Plan.
The Company approved the 2010 Employee, Director and Consultant
Equity Incentive Plan (2010 Plan) in September 2010 to replace the
2004 Plan. The 2010 Plan provided for the granting of stock options
and restricted stock awards. The 2010 Plan terminated in May 2014
upon the Company’s initial public offering (Initial Public
Offering). However, grants made under the 2010 Plan are still
governed by that plan. As of September 30, 2018, options to
purchase 413,130 shares of common stock at a weighted average
exercise price of $1.58 per share remained outstanding under the
2010 Plan.
The Company approved the 2013 Equity Incentive Plan (2013 Plan) in
October 2013. The 2013 Plan became effective immediately on
adoption although no awards were to be made under it until the
effective date of the registration statement for the Initial Public
Offering. The 2013 Plan provides for the granting of stock options,
restricted stock, stock appreciation rights, stock units, and
performance cash awards to certain employees, members of the board
of directors and consultants of the Company. The 2013 Plan was
amended in June 2018. The amended 2013 Plan provides that
commencing in 2019, on January 1 of each year the aggregate
number of common shares that may be issued under the 2013 Plan
shall automatically increase by such a number of shares equal to
the lower of (a) 6% of the total number of shares of common
stock outstanding on the last calendar day of the prior fiscal year
and (b) a number of shares of common stock determined by the
Company’s board of directors. As of September 30, 2018,
options to purchase 3,075,079 shares of common stock at a weighted
average exercise price of $6.73 per share and 212,297 shares of
common stock underlying restricted stock units (RSU’s)
remained outstanding under the 2013 Plan. As of September 30,
2018, there were 418,406 shares of common stock available for grant
under the 2013 Plan.
Terms of stock award agreements, including vesting requirements,
are determined by the Company’s board of directors or its
compensation committee, subject to the provisions of the respective
plan they were granted. Awards granted by the Company typically
vest over a four year period. Certain of the awards are subject to
acceleration of vesting in the event of certain change of control
transactions. The awards may be granted for a term of up to ten
years from the date of grant. The exercise price for options
granted under the 2013 Plan must be at a price no less than 100% of
the fair market value of a common share on the date of grant.
The Company recognizes stock-based compensation expense over the
requisite service period. The Company’s share-based awards
are accounted for as equity instruments. The amounts included in
the consolidated statements of operations relating to stock-based
compensation are as follows:
Three Months ended September 30,
Nine Months ended September 30,
2018 2017 2018 2017
Research and development expenses $ 396,940 $ 224,341 $ 1,135,342 $ 691,747
General and administrative expenses 876,780 434,998 1,991,577 1,430,921
Total stock-based compensation expense $ 1,273,720 $ 659,339 $ 3,126,919 $ 2,122,668
Stock Options
The table below summarizes activity relating to stock options under
the incentive plans for the nine months ended September 30,
2018:
Number of Weighted Weighted Aggregate (a)
Outstanding at December 31, 2017 2,246,857 $ 4.87
Granted 1,265,306 8.27
Outstanding at September 30, 2018 3,512,163 $ 6.10 7.94 $ 27,056,003
Exercisable at September 30, 2018 1,725,007 $ 4.99 6.82 $ 15,195,549
(a)
The aggregate intrinsic value in this table was
calculated on the positive difference, if any, between the closing
price per share of the Company’s common stock on
September 30, 2018 of $13.80 and the per share exercise price
of the underlying options.
As of September 30, 2018, unamortized stock-based compensation
for all stock options was $8,377,364 and will be recognized over a
weighted average period of 2.85 years.
Restricted Stock Units
Terms of RSUs agreements, including vesting requirements, are
determined by the board of directors or its compensation committee,
subject to the provisions of the 2013 Plan. RSUs granted by the
Company typically vest over a four year period. In the event that
the employees’ employment with the Company terminates any
unvested shares are forfeited and revert to the Company. Restricted
stock units are not included in issued and outstanding common stock
until the shares are vested and released. The table below
summarizes activity relating to RSUs for the nine months ended
September 30, 2018:
Number
Outstanding at December 31, 2017 157,128
Granted 96,144
Vested/released (40,975 )
Outstanding at September 30, 2018 212,297
The weighted-average fair value of RSUs granted was $8.60 per share
for the nine months ended September 30, 2018. As of
September 30, 2018, the outstanding restricted stock units had
unamortized stock-based compensation of $1.2 million with a
weighted-average remaining recognition period of 2.97 years and an
aggregate intrinsic value of $3.1 million.
Employee Stock Purchase Plan
In March 2016, the Company’s board of directors approved the
2016 Employee Stock Purchase Plan (2016 ESPP), which became
effective in June 2016 following the approval of the
Company’s stockholders. The 2016 ESPP authorizes the issuance
of up to a total of 414,639 shares of the Company’s common
stock to participating employees. The number of shares reserved for
issuance under the 2016 ESPP automatically increases on the first
business day of each fiscal year, commencing in 2017, by a number
equal to the lesser of (i) 1% of the shares of common stock
outstanding on the last business day of the prior fiscal year; or
(ii) the number of shares determined by the Company’s
Board of Directors. Unless otherwise determined by the
administrator of the 2016 ESPP, two offering periods of six
months’ duration will begin each year on January 1 and
July 1. Participating employees purchase stock under the 2016
ESPP at a price equal to the lower of 85% of the closing
price on the applicable offering commencement date
or 85% of the closing price on the applicable offering
termination date. The fair value of the purchase rights granted
under this plan was estimated on the date of grant using the
Black-Scholes option-pricing model using assumptions, which were
derived in a manner similar to those discussed above relative to
stock options. At September 30, 2018, the Company had 368,772
shares available for issuance under the 2016 ESPP. A summary of the
weighted-average grant-date fair value, shares issued and total
stock-based compensation expense recognized related to the 2016
ESPP as of September 30, 2018 and 2017 are as follows:
2018 2017
Weighted-average grant-date fair value per share $ 2.97 $ 1.77
Total shares issued 34,345 11,522
Total stock-based compensation expense $ 56,514 $ 44,720 |
