6. Stock-Based Compensation Plans

At our Annual Meeting of Stockholders held on June 24, 2008, our stockholders approved the Allos Therapeutics, Inc. 2008 Equity Incentive Plan, or the 2008 Plan. The 2008 Plan authorizes the issuance of incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and forms of equity compensation, which may be granted to employees, directors and consultants. Only employees may receive incentive stock options. The 2008 Plan succeeds and continues prior equity incentive plans. As of June 24, 2008, no additional stock awards will be granted under the prior plans and all outstanding stock awards granted under the prior plans are deemed to be stock awards granted under the 2008 Plan (but remain subject to the terms of the prior plans with respect to which they were originally granted).

12,550,843 shares of our common stock were eligible to be issued pursuant to stock awards granted under the 2008 Plan, provided that all stock awards granted after the June 24, 2008 effective date of the 2008 Plan, other than stock options and stock appreciation rights granted with an exercise price of at least 100% of such stock award's fair market value on the date of grant, will reduce the number of shares available for issuance under the 2008 Plan by 1.35 shares per share granted pursuant to the stock award. If a stock award under the 2008 Plan expires or otherwise terminates without being exercised in full, the shares of common stock of the Company not acquired pursuant to the stock award will again become available for issuance under the 2008 Plan. In addition, shares issued pursuant to a stock award that are forfeited to or repurchased by us prior to becoming fully vested and shares that are cancelled pursuant to an exchange or repricing program will become available for the grant of new stock awards under the 2008 Plan. Shares of common stock that revert to and again become available for issuance under the 2008 Plan and that prior to such reversion were granted pursuant to a stock award that reduced the number of shares available under the 2008 Plan by 1.35 shares per share granted pursuant to such stock award, shall cause the number of shares of common stock of the Company available for issuance under the 2008 Plan to increase by 1.35 shares upon such reversion.

At our Annual Meetings of Stockholders held on June 22, 2010 and June 23, 2009, our stockholders approved amendments to the Allos Therapeutics, Inc. 2008 Equity Incentive Plan, or the Plan, to increase the aggregate number of shares of common stock authorized for issuance under the Plan by 7,500,000 and 5,750,000 shares, respectively. Our Board of Directors had previously approved the amendments and recommended approval to our stockholders.

The 2008 Plan, and one of our prior plans (together, the "Plans"), provide for appropriate adjustments in the number of shares reserved and outstanding options in the event of certain changes to our outstanding common stock by reason of merger, recapitalization, stock split or other similar events. Options granted under the 2008 Plan may be exercised for a period of not more than 10 years from the date of grant or any shorter period as determined by our Board of Directors. Options vest as determined by the Board of Directors, generally over a period of two to four years, subject to acceleration under certain events. The exercise price of any incentive stock option granted under the Plans must equal or exceed the fair market value of our common stock on the date of grant, or 110% of the fair market value per share in the case of a 10% or greater stockholder.

Stock-based compensation expense for the years ended December 31, 2011, 2010 and 2009 has been recognized in the accompanying Statements of Operations as follows:


		2011		2010		2009
Research and development	$	3,402	$	3,314	$	2,395
Selling, general and administrative		8,171		8,112		6,285
Total stock-based compensation expense	$	11,573	$	11,426	$	8,680

Effective August 24, 2010, James V. Caruso, our former Executive Vice President, Chief Commercial Officer, departed the Company. As a result of Mr. Caruso's departure, we adjusted the forfeiture rate applied to his equity compensation, which resulted in a $787,000 reversal of selling, general and administrative stock-based compensation expense during the three months ended September 30, 2010, of which $605,000 related to stock option awards and $182,000 related to restricted stock unit awards.

Effective September 30, 2009, Pablo J. Cagnoni, M.D., our former Senior Vice President, Chief Medical Officer, resigned. As a result of his resignation, we adjusted the forfeiture rate applied to his equity compensation, which resulted in a $906,000 reversal of research and development stock-based compensation expense during the three months ended September 30, 2009, of which $699,000 related to stock option awards, $166,000 related to restricted stock awards and $41,000 related to restricted stock unit awards.

Stock-based compensation expense by equity award type for the years ended December 31, 2011, 2010 and 2009 was as follows:


		Years Ended December 31,
		2011		2010		2009
Stock options	$	3,634	$	8,981	$	8,147
Restricted stock units		7,880		2,199		368
Restricted stock		2		42		48
Employee stock purchase plan		57		204		117
Total stock-based compensation expense	$	11,573	$	11,426	$	8,680

As of December 31, 2011, the unrecognized stock-based compensation balance and estimated weighted-average remaining amortization period by equity award type was as follows:


			Weighted-
		Unrecognized	average
		stock-based	remaining
		compensation	amortization
		balance	period
Stock options	$	2,719	1.4
Restricted stock units		6,381	1.5

Stock Options

The following table summarizes our stock option activity and related information:


	Options Outstanding						Options Exercisable
						Weighted
			Weighted			Average		Weighted
	Number of		Average			Grant-date	Number of	Average
	Shares		Exercise Price			Fair Value	Shares	Exercise Price
Outstanding at December 31, 2010	8,716,829		$	6.36			4,539,454	$	5.89
Granted	880,000			2.17	$	1.20
Exercised	(4,893	)		2.91
Forfeited/Expired	(2,467,002	)		6.21
Outstanding at December 31, 2011	7,124,934		$	5.90			4,987,338	$	6.12

The options outstanding at December 31, 2011 have a weighted average remaining contractual term of 6.7 years.

The following table summarizes information about outstanding stock options that are fully vested and currently exercisable, and outstanding stock options that are expected to vest in the future:


		Weighted Average		Weighted
	Number	Remaining		Average		Aggregate
	Outstanding	Contractual Term		Exercise Price		Intrinsic Value
As of December 31, 2011:
Options fully vested and exercisable	4,987,338	6.0	$	6.12	$	—
Options expected to vest, including effects
of expected forfeitures	1,634,876	8.4	$	5.48		2,000
Options fully vested and expected to vest	6,622,214	6.6	$	5.97	$	2,000

The aggregate intrinsic value in the tables above represents the total pretax intrinsic value, based on our closing stock price of $1.42 as of December 31, 2011, which would have been received by the option holders had all option holders with in-the-money options exercised their options as of that date. There were no in-the-money options exercisable as of December 31, 2011. The total intrinsic value of outstanding stock options as of December 31, 2011 was $3,000.

The total intrinsic value of options exercised during the years ended December 31, 2011, 2010 and 2009 was $1,000, $4,085,000 and $4,583,000, respectively. We settle employee stock option exercises with newly issued shares of common stock.

Valuation assumptions for stock options granted during the years ended December 31, 2011, 2010 and 2009

For stock options granted during the years ended December 31, 2011, 2010 and 2009, the majority vest 25% one year after the date of grant, and the remaining 75% in equal monthly installments thereafter over the next three years, until all such shares are vested and exercisable. Stock-based compensation is calculated according to the FASB issued accounting guidance and is expensed over the vesting period of the individual options using the graded vesting attribution method. During the years ended December 31, 2011, 2010 and 2009, we granted stock options with a weighted-average grant-date fair value of $1.20, $4.07 and $4.12 per share, respectively. The fair value of stock options granted to our employees during the years ended December 31, 2011, 2010 and 2009 was estimated on the date of each grant using the Black-Scholes option pricing model using the following weighted-average assumptions:


	2011		2010		2009
Stock option plans:
Expected dividend yield	0	%	0	%	0	%
Expected stock price volatility	62	%	62	%	72	%
Risk free interest rate	1.8	%	2.5	%	2.1	%
Expected life (years)	5.5		5.5		5.2

We used an expected dividend yield of 0%, as we do not expect to pay dividends during the expected life of these awards. The expected stock price volatility is determined using our historical stock volatility over the period equal to the expected life of each award. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of each award. The expected life of the stock options was estimated using peer data of companies in the life science industry with similar equity plans. Stock-based compensation expense is recognized net of estimated pre-vesting forfeitures, which results in recognition of expense on options that are ultimately expected to vest over the expected option term. Forfeitures were estimated using actual historical forfeiture experience.

Restricted Stock

The following table summarizes activity and related information for restricted stock unit, or RSU, awards:


				Weighted
				Average
	Number of			Grant-date
	Shares			Fair Value
Nonvested RSU at December 31, 2010	2,492,078		$	4.97
Granted	2,654,824			3.09
Vested	(666,133	)		4.95
Forfeited	(908,832	)		3.76
Nonvested RSU at December 31, 2011	3,571,937		$	3.89

The shares of RSU awards vest in one, three or four equal annual installments from the date of grant. Upon vesting of the restricted stock unit awards, we issue unrestricted shares of our common stock. The total fair value of shares vested during the years ended December 31, 2011 and 2010 was $1,185,000 and $278,000, respectively.

The following table summarizes activity and related information for our restricted stock, or RS, awards:


					Weighted
					Average
		Number of			Grant-date
		Shares			Fair Value
Nonvested RS at December 31, 2010		12,500		$	6.51
Granted		—			—
Vested		(7,500	)		5.85
Forfeited		(5,000	)		7.49
Nonvested RS at December 31, 2011	$	—		$	—

The shares of restricted stock vest in four equal annual installments from the date of grant. The total fair value of shares vested during the year ended December 31, 2011, 2010 and 2009 was $35,000, $806,000 and $869,000, respectively.

Employee Stock Purchase Plan

On February 28, 2001, our Board of Directors approved the Allos Therapeutics, Inc. 2001 Employee Stock Purchase Plan, or Purchase Plan, which was also approved by our stockholders on April 17, 2001. Under the Purchase Plan, we are authorized to issue up to 2,500,000 shares of common stock to qualified employees. Qualified employees can choose to have up to 10% of their annual base earnings withheld to purchase shares of our common stock during each offering period. The purchase price of the common stock is 85% of the lower of the fair market value of a share of common stock on the first day of the offering or the fair market value of a share of common stock on the last day of the purchase period. We sold 100,954, 115,797 and 42,063 shares to employees in 2011, 2010 and 2009, respectively. There were 2,000,963 shares available for sale under the Purchase Plan as of December 31, 2011. The weighted-average estimated grant date fair value of purchase

awards under the Purchase Plan during the years ended December 31, 2011, 2010 and 2009 was $1.06, $1.75 and $2.78 per share, respectively.

The fair value of purchase awards granted to our employees during the years ended December 31, 2011, 2010 and 2009 was estimated using the Black-Scholes option pricing model using the following weighted-average assumptions:


	2011		2010		2009
Stock purchase plan:
Expected dividend yield	0	%	0	%	0	%
Expected stock price volatility	51	%	49	%	77	%
Risk free interest rate	0.1	%	0.2	%	0.4	%
Expected life (years)	0.5		0.5		0.5