6. STOCK-BASED COMPENSATION AND STOCK PLANS

Our stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). We estimate the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of our stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. We believe that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of our stock options granted in the three months ended March 31, 2016 and 2015.

The following table presents stock-based compensation expense included in our Condensed Statements of Operations and Comprehensive Loss:

	Three Months Ended March 31,
	2016		2015
Research and development	$	190	$	271
General and administrative		404		547
Total stock-based compensation expense	$	594	$	818

In the three months ended March 31, 2016 and 2015, no stock-based compensation expense was capitalized and there were no recognized tax benefits associated with the stock-based compensation expense.

Option activity under our stock plans for the three months ended March 31, 2016 was as follows:

Stock Options	Number of Shares			Weighted Average Exercise Price
Outstanding as of December 31, 2015		8,305,950		$	4.24
Granted		1,472,000			1.79
Exercised		(97,498	)		1.16
Cancelled		(203,254	)		3.95
Outstanding as of March 31, 2016		9,477,198		$	3.89

Exercisable as of March 31, 2016		6,383,542		$	4.93

The aggregate intrinsic value of options outstanding at March 31, 2016 was $472 and $102 related to exercisable options. The weighted average fair value of options granted in the three months ended March 31, 2016 and 2015 was $1.12 and $0.71 per share, respectively. The intrinsic value of options exercised in the three months ended March 31, 2016 was $60.

Shares vested, expected to vest and exercisable at March 31, 2016 are as follows:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Vested and unvested expected to vest at March 31, 2016		9,304,672	$	3.89		5.7	$	452
Exercisable at March 31, 2016		6,383,542	$	4.93		4.1	$	102

The total compensation cost not yet recognized as of March 31, 2016 related to non-vested option awards was $3.7 million, which will be recognized over a weighted-average period of 2.8 years. During the three months ended March 31, 2016, 126,036 shares expired and 2,218 shares were forfeited. The weighted average remaining contractual life for options exercisable at March 31, 2016 was 4.1 years.

In 2013, we granted 242,697 shares of restricted stock to employees, vesting annually over a four year period. The weighted average fair value of the restricted stock at the time of grant in 2013 was $2.51 per share, and is being expensed ratably over the vesting period. Through March 31, 2016, 82,617 shares have been forfeited, and 130,804 shares have vested. We recognized share-based compensation expense related to restricted stock of $22 and $33 for the three months ended March 31, 2016 and 2015, respectively.

Restricted stock activity under the Plan for the three months ended March 31, 2016 was as follows:

Restricted Stock	Number of Shares			Weighted Average Grant Date Fair Value
Unvested as of December 31, 2015		58,635		$	2.51
Vested		(29,306	)		2.51
Cancelled		(53	)		2.51
Unvested as of March 31, 2016		29,276		$	2.51

The fair value of restricted stock that vested in the three months ended March 31, 2016 and 2015 was $47 and $79, respectively.

In July 2010, the Company amended its chief executive officer’s (the “CEO’s”) employment agreement to grant the CEO 100,000 stock options, of which 25% vested upon grant and 25% vested annually over the following three years, and a maximum of 390,000 performance-based stock units that vest upon the achievement of certain performance and market based targets. In March 2013, the Company amended its CEO’s employment agreement to modify the performance and market based targets.

In February 2012, the Company amended its chief medical officer’s (the “CMO’s”) employment agreement to grant the CMO 50,000 performance-based stock units that vest upon the achievement of certain performance based targets.

In March 2013, the Company amended its chief operating officer’s (the “COO’s”) employment agreement to grant the COO 125,000 performance-based stock units that vest upon the achievement of certain performance based targets. In March 2013, the Company amended its CMO’s employment agreement to grant the CMO 120,000 performance-based stock units that vest upon the achievement of certain performance based targets.

Through March 31, 2016 no expense has been recorded for any performance-based stock units granted to the CEO, COO, or CMO.