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Stock Compensation
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock Compensation Stock Compensation
2017 Inducement Equity Plan
In May 2017, the Company's board of directors approved the 2017 Inducement Equity Plan (the "2017 Plan"). The number of shares of common stock available for awards under the 2017 Plan was set to 750,000, with any shares of common stock that are forfeited, cancelled, held back upon the exercise or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of common stock, or otherwise terminated (other than by exercise) under the 2017 Plan added back to the shares of common stock available for issuance under the 2017 Plan. The 2017 Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards, restricted stock units ("RSUs"), unrestricted stock awards and dividend equivalent rights.
In November 2019, the Company's board of directors approved an amendment to the 2017 Plan to increase the number of shares of common stock available for issuance under the 2017 Plan by 400,000 shares.
2013 Stock Option and Incentive Plan
In May 2015, the Company’s stockholders approved the amended and restated 2013 Stock Option and Incentive Plan (as amended, the “2013 Plan”) which, among other things, increased the number of shares of common stock reserved for issuance
thereunder. The number of shares of common stock available for awards under the 2013 Plan was increased by 923,622 shares from 2,051,378 shares to 2,975,000 shares, plus (i) shares of common stock that are forfeited, cancelled, held back upon the exercise or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of common stock or otherwise terminated (other than by exercise) under the 2013 Plan and the Company’s 2008 Incentive Stock Option and Restricted Stock Plan are added back to the shares of common stock available for issuance under the 2013 Plan, and (ii) on January 1, 2016, and each January 1, thereafter, the number of shares of common stock reserved and available for issuance under the 2013 Plan will be cumulatively increased by 2.5% of the number of shares of common stock outstanding on the immediately preceding December 31, or such lesser number of shares of common stock determined by the compensation committee. The 2013 Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards, RSUs, unrestricted stock awards, cash-based awards, performance share awards and dividend equivalent rights.
2008 Stock Option and Restricted Stock Plan
In April 2008, the Company adopted the 2008 Plan, administered by the Board of Directors or a committee appointed by the Board of Directors. The 2008 Plan provides for the granting of stock options and restricted stock to employees and nonemployees of the Company. Options granted under the 2008 Plan may either be incentive stock options, restricted stock awards or nonqualified stock options. Stock options and restricted stock grants may be granted to employees, directors and consultants. Stock awards under the 2008 Plan may be granted for up to ten years from the adoption of the 2008 Plan at prices no less than 100 percent of the fair value of the shares on the date of the grant as determined by (i) the closing price of the Company’s common stock on any national exchange, (ii) the National Association of Securities Dealers Inc. Automated Quotation System (“NASDAQ”), if so authorized for quotation as a NASDAQ security, or (iii) by reasonable application of a reasonable valuation method. The valuation methods utilized by the Company are consistent with the AICPA Technical Practice Aid.
The Company incurs stock-based compensation expense related to stock options and RSUs. The fair value of RSUs is determined by the closing market price of the Company’s common stock on the date of grant. The fair value of stock options is calculated using a Black-Scholes option-pricing model. Compensation costs related to equity instruments granted are recognized over the requisite service periods of the awards on a straight-line basis at the grant-date fair value. The Company accounts for forfeitures as they occur.
Under the 2017 Plan, 2013 Plan and the 2008 Plan the vesting of options granted or restricted awards given will be determined individually with each option grant. Generally, 25 percent of the granted amount will vest upon the first anniversary of the option grant with the remainder vesting ratably on the first day of each calendar quarter for the following three years. Stock options have a 10-year life and expire if not exercised within that period, or if not exercised within 90 days of cessation of providing service to the Company.
Stock Options
The following table summarizes the activity relating to the Company’s options to purchase common stock for the year ended December 31, 2020:
Weighted-Average
Weighted-AverageRemaining
Number ofExercise PriceContractualAggregate
OptionsPer ShareTerm (Years)Intrinsic Value
(in thousands)
Outstanding at December 31, 20194,677,929 $39.31 6.82$109,054 
Granted234,940 $61.14 
Forfeited or cancelled (vested and unvested)(436,916)$53.95 
Exercised(299,435)$22.15 
Outstanding at December 31, 20204,176,518 $40.24 5.28$18,415 
The following table summarizes information about the Company’s stock option plan as of December 31, 2020:
Weighted-Average
Weighted-AverageRemaining
Number ofExercise PriceContractualAggregate
OptionsPer ShareTerm (Years)Intrinsic Value
(in thousands)
Vested and expected to vest at December 31, 20204,176,518 $40.24 5.28$18,415 
Exercisable at December 31, 20203,356,739 $36.96 4.62$18,154 
The total pre-tax intrinsic value of stock options exercised during the years ended December 31, 2020, 2019 and 2018, was $6.3 million, $17.7 million and $12.1 million, respectively.
The following table shows the weighted-average assumptions used to compute the stock-based compensation costs for the stock options granted to employees during each of the three years ending December 31, 2020, using the Black-Scholes option-pricing model:
Year ended
December 31,
202020192018
Risk-free interest rate1.70 %2.10 %2.75 %
Dividend yield— — — 
Weighted-average expected life of options (years)6.256.256.21
Volatility81 %73 %72 %
The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The weighted-average expected life of the options was calculated using the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107 (“SAB No. 107”). This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical and predictive data, the estimated volatility incorporates the historical volatility of comparable companies whose share prices are publicly available.
The weighted-average grant-date fair values of stock options granted during the years ended December 31, 2020, 2019 and 2018, were $43.22, $31.18, and $37.56, respectively. During the year ended December 31, 2020, the Company recognized stock-based compensation expense related to stock options of $20.9 million, including $0.6 million that was capitalized into inventory. During the years ended December 31, 2019 and 2018, the Company recognized stock-based compensation expense related to stock options of $23.5 million and $23.4 million, respectively.
As of December 31, 2020, there was approximately $26.8 million of unrecognized compensation cost related to unvested options, which will be recognized over a weighted-average period of approximately 2.0 years.
Restricted Stock Units
The following table summarizes the activity relating to the Company’s RSUs for the year ended December 31, 2020:
Number ofWeighted-Average
RSUsFair Value Per Share
Outstanding and unvested at December 31, 2019245,966 $44.45 
Granted381,396 $49.14 
Forfeited or expired(113,108)$47.15 
Vested(113,020)$48.80 
Outstanding and unvested at December 31, 2020401,234 $46.92 
During the year ended December 31, 2020, the Company recognized stock-based compensation expense related to RSUs of $7.0 million, including $0.2 million that was capitalized into inventory. During the years ended December 31, 2019 and 2018, the Company recognized approximately $2.4 million and $0.6 million, respectively, of stock-based compensation expense recognized related to RSUs. As of December 31, 2020, there was approximately $15.6 million of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted-average period of approximately 2.9 years.
Employee Stock Purchase Plan
In April 2020, the board of directors approved the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan (the "ESPP") which was approved by the Company's shareholders on May 28, 2020. The ESPP allows eligible employees to authorize payroll deductions of up to 10% of their base salary or wages up to $25,000 annually to be applied toward the purchase of shares of the Company's common stock on the last trading day of the offering period. Participating employees will purchase shares of the Company's common stock at a discount of up to 15% on the lesser of the closing price of the Company's common stock on the NASDAQ Global Select Market (i) on the first trading day of the offering period or (ii) the last day of any offering period. Offering periods under the ESPP will generally be in six months increments, commencing on September 1 and March 1 of each calendar year with the administrator having the right to establish different offering periods. During the year ended December 31, 2020, the Company recognized $0.5 million of stock compensation expense related to the ESPP. As of December 31, 2020, there have been no shares issued and 825,000 shares reserved for future issuance under the ESPP.