(6) Stock-Based Compensation

The Company’s 2006 Stock Plan provides for the grant of incentive stock options, non-statutory stock options and non-vested restricted stock to employees, officers, directors and consultants of the Company. In January 2015, the number of shares of common stock reserved for issuance under the 2006 Stock Plan was increased from 10,300,000 to 11,600,000 pursuant to an “evergreen” provision, which provides for an annual increase based on the lesser of 1,300,000 shares, 5% of the Company’s then outstanding shares of common stock, or such other amount as the board of directors may determine. This increase was approved by the board of directors in December 2014. The administration of the 2006 Stock Plan is under the general supervision of the compensation committee of the board of directors. The exercise price of the stock options is determined by the compensation committee of the board of directors, provided that incentive stock options are granted with an exercise price not less than fair market value of the common stock on the date of grant and expire no later than ten years from the date the option is granted. Options generally vest over four years. As of March 31, 2015, the Company had options outstanding to purchase 10,123,204 shares of its common stock, which includes options outstanding under its 2001 Stock Plan that was terminated in March 2006. As of March 31, 2015, 1,261,136 shares were available for future issuance.

The following table summarizes stock option activity during the three months ended March 31, 2015:

	Shares		Weighted average exercise price per share
Outstanding at January 1, 2015	8,829,343		$	6.17
Options granted	1,693,686		2.39
Options exercised	—		—
Options cancelled	(399,825	)	9.14
Outstanding at March 31, 2015	10,123,204		$	5.42
Exercisable at March 31, 2015	5,305,790		$	6.45

The total cash received by the Company as a result of stock option exercises during the three months ended March 31, 2015 and 2014 was $0 and $0.8 million, respectively. The weighted-average grant date fair values of options granted during the three months ended March 31, 2015 and 2014 were $1.92 and $5.02, respectively.

Non-Vested (“Restricted”) Stock Awards With Service Conditions

The Company’s share-based compensation plan provides for awards of restricted shares of common stock to employees, officers, directors and consultants to the Company. Restricted stock awards are subject to forfeiture if employment or service terminates during the prescribed retention period. Restricted shares vest over the service period. The total fair value of restricted stock that vested in each of the three months ended March 31, 2015 and 2014 was $0.1 million.

The following table summarizes unvested restricted share activity during the three months ended March 31, 2015:

	Shares		Weighted average grant date fair value per share
Outstanding at January 1, 2015	744,514		$	3.65
Vested	(9,756	)	4.10
Granted	—		—
Forfeited	—		—
Outstanding at March 31, 2015	734,758		$	3.65

Stock-Based Compensation Expense

For the three months ended March 31, 2015 and 2014, the fair value of each employee stock option award was estimated on the date of grant based on the fair value method using the Black-Scholes option pricing valuation model with the following weighted average assumptions:

	Three Months Ended March 31,
	2015		2014
Risk-free interest rate	1.77	%	1.84	%
Expected life in years	6.25		6.25
Volatility	101	%	104	%
Expected dividend yield	—		—

Stock-based compensation expense during the three months ended March 31, 2015 and 2014 was as follows (in thousands):

	Three Months Ended March 31,
	2015		2014
Stock-based compensation expense by type of award:
Employee stock options	$	1,508	$	2,529
Restricted stock	202		57
Total stock-based compensation expense	$	1,710	$	2,586

Effect of stock-based compensation expense by line item:
Research and development	$	981	$	1,131
General and administrative	729		1,455
Total stock-based compensation expense included in net loss	$	1,710	$	2,586

Unrecognized stock-based compensation expense as of March 31, 2015 was as follows (dollars in thousands):

	Unrecognized stock compensation expense		Weighted average remaining period (in years)
Employee stock options	$	13,821	2.79
Restricted stock	2,343		3.19
Total	$	16,164	2.85