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:



	Year Ended December 31,
	2017		2016		2015
Cost of products	$	116	$	81	$	95
Cost of services	322		274		354
Research and development	9,336		9,251		8,614
Selling, general and administrative	31,802		32,596		29,604
Total	$	41,576	$	42,202	$	38,667

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 December 31, 2017, there were 453,371 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, shares of common stock, and other share-based awards, 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 December 31, 2017, there were 18,000,000 shares authorized for issuance under the 2013 Plan, of which 10,929,376 stock options were outstanding and 4,747,496 shares were available for grant.

Stock options may be granted with an exercise price equal to or greater than the stock's fair market value at the date of grant. Stock options may be granted with an exercise price less than the stock's fair market value at the date of grant if the stock options are replacement options in accordance with certain U.S. Treasury regulations. Virtually all stock options have ten-year terms and vest four years from the date of grant.

Stock option activity was as follows:



	Number of Shares		Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2014	8,323,544		$	22.59		8.64
Granted	5,051,500		45.82
Adjustment due to dividend (Note 14)	312,795		25.40
Exercised	(1,029,291	)	(15.16		)
Forfeited	(1,610,335	)	(26.75		)
Expired	(4,685	)	(28.29		)
Balances at December 31, 2015	11,043,528		32.66			8.49
Granted	4,644,860		29.39
Exercised	(1,210,840	)	(15.83		)
Forfeited	(2,760,809	)	(40.34		)
Expired	(76,356	)	(37.81		)
Balances at December 31, 2016	11,640,383		31.25			8.21
Granted	3,920,950		21.47
Adjustment due to dividend (Note 14)	46,766		31.11
Exercised	(149,429	)	(6.37		)
Forfeited	(3,797,105	)	(28.37		)
Expired	(278,818	)	(33.18		)
Balances at December 31, 2017	11,382,747		28.99			7.32
Exercisable at December 31, 2017	5,306,697		29.96			6.14

Total unrecognized compensation costs related to unvested awards as of December 31, 2017 were $68,999, and are expected to be recognized over a weighted-average period of approximately two years.

The weighted average grant date fair value of options granted during 2017, 2016 and 2015 was $12.19, $16.28 and $25.96, respectively. The aggregate intrinsic value of options exercised during 2017, 2016 and 2015 was $2,429, $22,704 and $24,675, respectively. The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of Intrexon's common stock for those shares where the exercise price was lower than the fair value of Intrexon's common stock on the date of exercise.

The following table summarizes additional information about stock options outstanding as of December 31, 2017:



					Options Outstanding						Options Exercisable
Range of Exercise Prices					Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value		Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value
$	2.64	—	$	9.30	453,371	$	7.06	3.94	$	2,020	453,371	$	7.06	3.94	$	2,020
$	12.50	—	$	21.38	3,158,121	20.58		8.74	—		456,942	19.52		7.13	—
$	21.43	—	$	28.81	3,399,721	25.55		6.91	—		1,804,401	25.86		5.69	—
$	28.88	—	$	40.99	2,751,716	32.07		6.70	—		1,732,250	31.51		6.32	—
$	41.41	—	$	65.08	1,619,818	53.52		7.42	—		859,733	53.07		7.38	—
					11,382,747	$	28.99	7.32	$	2,020	5,306,697	$	29.96	6.14	$	2,020

The following table summarizes additional information about stock options outstanding as of December 31, 2016:



					Options Outstanding						Options Exercisable
Range of Exercise Prices					Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value		Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value
$	2.65	—	$	9.34	562,951	$	6.23	4.13	$	10,172	525,755	$	6.01	3.97	$	9,615
$	15.21	—	$	27.19	2,785,705	23.47		8.54	4,797		684,704	21.07		7.29	2,237
$	27.21	—	$	29.68	3,147,242	29.30		7.53	—		1,400,707	29.35		7.31	—
$	29.70	—	$	42.22	3,590,423	32.89		9.09	—		345,274	37.06		6.85	—
$	43.99	—	$	65.34	1,554,062	54.40		8.43	—		461,595	53.06		8.33	—
					11,640,383	$	31.25	8.21	$	14,969	3,418,035	$	28.09	6.88	$	11,852

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 twelve months. The independent members of Intrexon's board of directors, with the recommendation of the compensation committee of the board of directors, subsequently approved extensions of the RSU Agreement through March 31, 2018, all of which are 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 for the years ended December 31, 2017, 2016 and 2015, and totaled $1,908, $1,861, and $314, respectively.

AquaBounty Stock Option Plans

In March 2016, AquaBounty's board of directors adopted the AquaBounty 2016 Equity Incentive Plan ("AquaBounty 2016 Plan") to replace the AquaBounty 2006 Equity Incentive Plan ("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 December 31, 2017, there were 227,203 options outstanding under both AquaBounty plans, of which 192,748 were exercisable, at a weighted average exercise price of $9.39 per share. As of December 31, 2016, there were 185,591 options outstanding under these plans, of which 181,766 were exercisable, at a weighted average exercise price of $7.89 per share.