Stock Option Plan

12 Months Ended

Dec. 31, 2018

Text Block [Abstract]

Stock Option Plan

13. Stock Option Plan

The Company adopted the 2012 Equity Incentive Plan, or the “2012 Plan,” in May 2012. Including subsequent increases, the Company has reserved 14.0 million shares for issuance. At December 31, 2018, there are 5,284,988 shares reserved for issuance and 3,895,923 available for future grant.

As of December 31, 2018, the Company had outstanding options to its employees to purchase up to 4,146,135 shares of the Company’s common stock, to its directors to purchase up to 1,120,950 shares of the Company’s common stock, as well as options to consultants in connection with services rendered to purchase up to 10,000 shares of the Company’s common stock.

Stock options to employees generally vest ratably in annual installments over three years, commencing on the first anniversary of the grant date and have contractual terms of ten years. Stock options to directors generally vest ratably over one or three years and have contractual terms of ten years. Stock options are valued using the Black-Scholes option pricing model and compensation is recognized based on such fair value over the period of vesting on a straight-line basis. The Company has also reserved an aggregate of 526,364 additional shares for issuance under options granted outside of the 2003 and 2012 Plans.

Proceeds from the option exercises during the years ended December 31, 2018, 2017, and 2016 amounted to $0.2 million, $0.1 million and $0.7 million respectively. The intrinsic value of these options amounted to $0.1 million, $0.2 million and $0.8 million for years ended December 31, 2018, 2017 and 2016, respectively.

Transactions under the 2012 Plan for the years ending December 31, 2018, 2017, and 2016 were as follows:

(in thousands, except share and per share data)	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2015		3,481,468		$	4.96
Granted		362,800			6.40
Exercised		(234,833	)		4.57
Cancelled		(144,100	)		6.43
Outstanding, December 31, 2016		3,465,335			5.07
Granted		688,800			5.27
Exercised		(180,000	)		3.67
Cancelled		(122,000	)		6.64
Outstanding, December 31, 2017		3,852,135			5.12
Granted		1,744,950			2.35
Exercised		(104,167	)		2.30
Cancelled		(215,833	)		5.72
Outstanding, December 31, 2018		5,277,085		$	4.24		6.86	$	88
Options exercisable, December 31, 2018		3,099,935		$	5.15		4.93	$	88
Options exercisable, December 31, 2017		2,925,502		$	5.12		5.58	$	1,152
Options available for future grant at December 31, 2018		3,895,923

In September 2017, the Company granted an option for 500,000 shares of its common stock, with an exercise price of $6.16 per share, which vests ratably in annual installments over three years, commencing on the first anniversary of the grant date and has a contractual term of ten years. This option was granted outside of the 2012 plan and therefore, is not included in the table above. The grant date fair value was $2.2 million. As of December 31, 2018, all 500,000 options are outstanding.

At December 31, 2018, total unrecognized compensation costs related to non-vested stock options outstanding amounted to $5.1 million. The cost is expected to be recognized over a weighted-average period of 1.53 years.

Restricted Stock

In December 2018, the Company issued 30,000 shares of restricted stock to its employees, which vest ratably in annual installments over three years, commencing on the first anniversary of the grant date. In December 2017, the Company issued 838,000 shares of restricted stock to its employees, which vest ratably in annual installments over three years, commencing on the first anniversary of the grant date. In December 2016, the Company issued 625,750 shares of restricted stock to its employees, which vest ratably in annual installments over three years, commencing on the first anniversary of the grant date. In December 2018, the Company issued 120,321 shares of restricted stock to its non-employee directors, which vest in their entirety on the one-year anniversary of the grant date. In December 2017, the Company issued 69,032 shares of restricted stock to its non-employee directors, which vest in their entirety on the one-year anniversary of the grant date. In December 2016, the Company issued 86,020 shares of restricted stock to its non-employee directors, which vest in their entirety on the one-year anniversary of the grant date.

In the year ended December 31, 2018, the Company repurchased 514,349 shares at average prices ranging from $1.70 to 4.41 to cover payroll taxes. In the year ended December 31, 2017, the Company repurchased 394,269 shares at average prices ranging from $4.14 to $7.12 to cover payroll taxes. In the year ended December 31, 2016, the Company repurchased 133,656 shares at average prices ranging from $5.35 to $7.74 to cover payroll taxes. A summary of the status of non-vested restricted stock as of December 31, 2018, 2017 and 2016 is as follows:

	Number of Shares			Weighted-Average Grant Date Fair Value
Non-vested, December 31, 2015		1,586,388		$	9.00
Granted		711,770			5.35
Vested		(617,666	)		8.90
Cancelled		—			—
Non-vested, December 31, 2016		1,680,492			7.49
Granted		907,032			4.14
Vested		(778,965	)		7.66
Cancelled		—			—
Non-vested, December 31, 2017		1,808,559			5.74
Granted		150,321			1.87
Vested		(1,005,377	)		6.62
Cancelled		(271,433	)		5.00
Non-vested, December 31, 2018		682,070		$	3.47

As of December 31, 2018, there was $2.6 million of total unrecognized stock-based compensation expense related to non-vested restricted stock arrangements. The expense is expected to be recognized over a weighted-average period of 1.33 years.