Share-Based Payments

The Company records the fair value of stock options issued to employees and non-employees as of the grant date as stock-based compensation expense. Stock-based compensation expense for employees and non-employees is recognized over the requisite service period, which is typically the vesting period. Stock-based compensation costs included in the consolidated statements of operations are presented below:



	Three Months Ended March 31,
	2017		2016
Cost of products	$	26	$	20
Cost of services	78		68
Research and development	2,193		2,565
Selling, general and administrative	5,597		10,535
Total	$	7,894	$	13,188

Intrexon Stock Option Plans

In April 2008, Intrexon adopted the 2008 Equity Incentive Plan (the "2008 Plan") for employees and nonemployees pursuant to which Intrexon's board of directors granted share based awards, including stock options, to officers, key employees and nonemployees. Upon the effectiveness of the 2013 Omnibus Incentive Plan (the "2013 Plan"), no new awards may be granted under the 2008 Plan. As of March 31, 2017, there were 564,943 stock options outstanding under the 2008 Plan.

Intrexon adopted the 2013 Plan for employees and nonemployees pursuant to which Intrexon's board of directors may grant share based awards, including stock options and shares of common stock, to employees, officers, consultants, advisors, and nonemployee directors. The 2013 Plan became effective upon the closing of the Company's initial public offering in August 2013, and as of March 31, 2017, there were 16,000,000 shares authorized for issuance under the 2013 Plan, of which 12,067,564 stock options were outstanding and 2,139,882 shares were available for grant. In March 2017, Intrexon's board of directors approved, subject to shareholder approval at Intrexon's annual meeting in June 2017, an increase of 2,000,000 shares of common stock to be reserved for issuance under the 2013 Plan.

Stock option activity was as follows:



	Number of Shares		Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2016	11,640,383		$	31.25		8.21
Granted	3,020,950		21.32
Adjustment due to dividend (Note 13)	46,766		31.11
Exercised	(10,343	)	(16.93		)
Forfeited	(2,058,040	)	(29.89		)
Expired	(7,209	)	(36.72		)
Balances at March 31, 2017	12,632,507		28.99			8.19
Exercisable at March 31, 2017	4,444,346		28.73			6.85

Intrexon currently uses authorized and unissued shares to satisfy share award exercises.

In October 2015, the compensation committee and the independent members of Intrexon's board of directors approved a compensation arrangement whereby the Company's Chief Executive Officer ("CEO") would receive a monthly salary. Previously, the CEO did not receive compensation for his services as an employee of the Company other than through his participation in the Company's Annual Executive Incentive Plan which became effective January 1, 2015. Pursuant to the compensation agreement, the CEO receives a base salary of $200 per month payable in fully vested shares of Intrexon common stock with such shares subject to a three-year lock-up on resale. The monthly number of shares of common stock is calculated based on the closing price on the last trading day of each month and the shares are issued pursuant to the terms of a Restricted Stock Unit Agreement ("RSU Agreement") which was executed between Intrexon and the CEO pursuant to the terms of the 2013 Plan. The RSU Agreement became effective in November 2015, and had an initial term of 12 months. In October 2016, the independent members of Intrexon's board of directors, with the recommendation of the compensation committee of the board of directors, approved a new RSU Agreement expiring on December 31, 2016, and in December 2016 once again approved a new RSU Agreement expiring March 31, 2017, both of which on the same terms as the original RSU Agreement. The fair value of the shares issued as compensation for services is included in selling, general and administrative expenses in the Company's consolidated statements of operations and totaled $471 for the three months ended March 31, 2017 and 2016. In March 2017, the independent members of Intrexon's board of directors, with the recommendation of the compensation committee of the board of directors, approved a new RSU Agreement for the CEO providing for a term of 12 months expiring on March 31, 2018 and on the same terms as the original RSU Agreement.

AquaBounty Stock Option Plans

As of March 31, 2017, there were 185,951 options outstanding, of which 183,840 were exercisable under the AquaBounty 2006 Equity Incentive Plan ("AquaBounty 2006 Plan") at a weighted average exercise price of $7.90 per share. As of December 31, 2016, there were 185,951 options outstanding under this plan, of which 181,766 were exercisable at a weighted average exercise price of $7.89 per share. The AquaBounty stock option data reflect a 1-for-30 reverse stock split of AquaBounty's common stock effective January 5, 2017.

In March 2016, AquaBounty's board of directors adopted the AquaBounty 2016 Equity Incentive Plan ("AquaBounty 2016 Plan") to replace the AquaBounty 2006 Plan. The AquaBounty 2016 Plan provides for the issuance of incentive stock options, non-qualified stock options and awards of restricted and direct stock purchases to directors, officers, employees and consultants of AquaBounty. The AquaBounty 2016 Plan was approved by AquaBounty's shareholders at its annual meeting in April 2016. Upon the effectiveness of the AquaBounty 2016 Plan, no new awards may be granted under the AquaBounty 2006 Plan. As of March 31, 2017, there were no options outstanding under the AquaBounty 2016 Plan.