Employee Benefit Plans | NOTE 9: Employee Benefit Plans 2000 Stock Plan Under the Amended and Restated 2000 Stock Plan (the “2000 Plan”), options could be granted at prices not lower than 85% and 100% of the fair market value of the common stock for non-statutory and statutory stock options, respectively. Options generally vest monthly over a period of four years and unexercised options generally expire ten years from the date of grant. The authority of Vermillion’s Board of Directors to grant new stock options and awards under the 2000 Plan terminated in 2010. There were no stock options under the 2000 Stock Plan exercised during the years ended December 31, 2019 or 2018. All remaining options expired during 2018. No additional shares of common stock were reserved for future option grants under the 2000 Plan. 2010 Stock Incentive Plan Under the 2010 Plan, employees, directors and consultants of the Company were eligible to receive a variety of awards, including stock options, share appreciation rights, restricted shares, restricted share units, unrestricted shares, deferred share units, performance and cash-settled awards, and dividend equivalent rights. In June 2015 and June 2018, Vermillion’s stockholders approved increases of 4,500,000 and 4,000,000 , respectively, in the number of shares available for issuance under the 2010 Plan for a total of 12,122,983 shares. Unexercised options generally expire ten years from the date of grant. The authority of Vermillion’s Board of Directors to grant new stock options and awards under the 2010 Plan terminated in 2019. Vermillion’s Board of Directors continued to administer the 2010 Plan with respect to the stock options that remained outstanding under the 2010 Plan . Options to purchase 19,687 shares of common stock were exercised during the year ended December 31, 2019. Options to purchase 32,500 shares of common stock were exercised during the year ended December 31, 2018. During the year ended December 31, 2019, Vermillion issued to Vermillion’s Board of Directors 190,909 shares of restricted stock under the 2010 Plan having a fair value of $252,000 as payment for services rendered in 2019. Vermillion also issued to certain consultants 11,667 shares of restricted stock under the 2010 Plan having a fair value of $4,000 . During the year ended December 31, 2018, Vermillion issued to Vermillion’s Board of Directors an aggregate of 398,400 shares of restricted stock under the 2010 Plan having a fair value of $442,000 as payment for services rendered in 2018. 35,000 of those shares of restricted stock were forfeited upon the departure of a board member in June. The Company also issued to certain consultants 40,606 shares of restricted stock under the 2010 Plan having a fair value of $32,000 . 2019 Stock Incentive Plan At Vermillion’s 2019 annual meeting of stockholders, the Company’s stockholders approved the Vermillion, Inc. 2019 Stock Incentive Plan (the “2019 Plan”). The purposes of the 2019 Plan are (i) to align the interests of the Company’s stockholders and recipients of awards under the 2019 Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining non-employee directors, officers, other employees, consultants, independent contractors and agents; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. The 2019 Plan allows the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to participants. Subject to the terms and conditions of the 2019 Plan, the initial number of shares authorized for grants under the 2019 Plan is 10,492,283 . To the extent an equity award granted under the 2019 Plan or the 2010 Plan expires or otherwise terminates without having been exercised or paid in full, or is settled in cash, the shares of common stock subject to such award will become available for future grant under the 2019 Plan. As of December 31, 2019, a total of 10,492,283 shares of common stock had been reserved for issuance under the 2019 Plan, of which 207,000 shares of common stock are subject to outstanding stock options. The activity related to shares available for grant under the 2000 Plan, the 2010 Plan and the 2019 Plan for the years ended December 31, 2019 and 2018 was as follows: 2000 Stock Plan 2010 Stock Option Plan 2019 Stock Option Plan Total Shares available at December 31, 2017 - 2,054,633 - 2,054,633 Shares added - 4,000,000 - 4,000,000 Options canceled 18,000 861,063 - 879,063 Reduction in shares reserved (18,000) - - (18,000) Options granted - (1,304,000) - (1,304,000) Restricted stock units granted - (432,877) - (432,877) Shares available at December 31, 2018 - 5,178,819 - 5,178,819 Shares added - - 8,000,000 8,000,000 Shares transferred - (2,492,283) 2,492,283 - Options canceled - 691,025 - 691,025 Options granted - (2,504,585) (207,000) (2,711,585) Restricted stock units granted - (202,576) - (202,576) Shares available at December 31, 2019 - 670,400 10,285,283 10,955,683 The stock option activity under the 2000 Plan, the 2010 Plan and the 2019 Plan for the years ended December 31, 2019 and 2018 was as follows: Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Options outstanding at December 31, 2017 4,219,568 $ 1.86 $ 1,033 8.02 Granted 1,304,000 0.98 Exercised (32,500) 0.89 Canceled (879,063) 1.58 Options outstanding at December 31, 2018 4,612,005 $ 1.67 $ - 7.17 Granted 2,711,585 1.02 Exercised (19,687) 1.32 Canceled (691,025) 1.79 Options outstanding at December 31, 2019 6,612,878 $ 1.67 $ 303,995 8.66 Shares exercisable: December 31, 2019 3,115,001 $ 1.69 $ 15,026 5.95 Shares expected to vest: December 31, 2019 2,868,259 $ 1.14 $ 288,969 8.66 The range of exercise prices for options outstanding and exercisable at December 31, 2019 is as follows: Exercise Price Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Life in Years Options Exercisable Weighted Average Exercise Price $ 0.01 - $ 1.30 3,769,835 $ 1.02 8.81 851,710 $ 1.13 1.31 - 1.64 1,144,168 1.49 4.97 974,418 1.48 1.65 - 2.08 791,000 1.99 5.21 709,998 1.99 2.09 - 11.55 907,875 2.35 6.37 578,875 2.48 $ 0.01 - $ 11.55 6,612,878 $ 1.40 7.38 3,115,001 $ 1.69 (in thousands) Total Intrinsic Value of Options Exercised Total Fair Value of Vested Options Year ended December 31, 2019 $ 8 $ 2,869 Year ended December 31, 2018 $ 9 $ 2,319 Stock-based Compensation Stock-based Compensation Expense The Company records stock-based compensation net of estimated forfeitures. The assumptions used to calculate the fair value of options granted under the 2010 Plan and the 2019 Plan that were incorporated in the Black-Scholes pricing model for the years ended December 31, 2019 and 2018 were as follows: Year Ended December 31, 2019 2018 Dividend yield - % - % Volatility 79 % 69 % Risk-free interest rate 2.30 % 2.69 % Expected lives (years) 4.0 4.0 Weighted average grant date fair value $ 0.55 $ 0.51 The allocation of employee and director stock-based compensation expense by functional area for the years ended December 31, 2019 and 2018 was as follows: Year Ended December 31, (in thousands) 2019 2018 Cost of sales $ 67 $ 91 Research and development 4 6 Sales and marketing 122 112 General and administrative 942 982 Total $ 1,135 $ 1,191 As of December 31, 2019, total unrecognized compensation cost related to unvested stock option awards was approximately $1,633,000 and the related weighted average period over which it is expected to be recognized was 2.54 years. 401(k) Plan The Company’s 401(k) Plan allows eligible employees to defer up to an annual limit of the lesser of 90.0% of eligible compensation or a maximum contribution amount subject to the Internal Revenue Service annual contribution limit. The Company is not required to make contributions under the 401(k) Plan. During the years ended December 31, 2019 and 2018, the Company did no t contribute to the 401(k) Plan. |