(8) Stock-Based Compensation

The Company maintains the Amended and Restated 2014 Omnibus Incentive Compensation Plan, as amended (the “2014 Plan”), which allows for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, performance units and other stock‑based awards to employees, officers, non-employee directors, consultants, and advisors. In addition, the 2014 Plan provides selected executive employees with the opportunity to receive bonus awards that are considered qualified performance‑based compensation. The 2014 Plan is subject to automatic annual increases in the number of shares authorized for issuance under the 2014 Plan on the first trading day of January each year equal to the lesser of 1.5 million shares or 10% of the number of shares of common stock outstanding on the last trading day of December of the preceding year. As of January 1, 2020, the number of shares of common stock that may be issued under the 2014 Plan was automatically increased by 1.5 million shares, increasing the number of shares of common stock available for issuance under the 2014 Plan to 7,804,869 shares. As of December 31, 2019, 1,767,777 shares were available for future issuance under the 2014 Plan.

Options issued under the 2014 Plan have a contractual life of 10 years and may be exercisable in cash or as otherwise determined by the board of directors. The Company has granted options to employees and non‑employee directors. Stock options granted to employees vest 25% upon the first anniversary of the grant date and the balance of unvested options vests in quarterly installments over the remaining three years. Stock options granted annually to non-employee directors vest on the earlier of the one-year anniversary of the grant date, or the date of the Company’s next annual stockholders’ meeting that occurs after the grant date. The Company’s non-employee director compensation policy enables directors to receive stock options in lieu of quarterly cash payments. Any option granted to the directors in lieu of cash compensation vests in full on the grant date. The Company records forfeitures as they occur.

During 2018, the Company granted 83,280 performance-based stock options to certain employees. These performance options have a 10-year life and an exercise price equal to the fair value of the Company’s stock at the grant date. During 2019, the Company granted 5,000 performance-based restricted stock awards. Vesting of the performance-based options and restricted stock awards is dependent on meeting certain performance conditions, which relate to the Company’s research and development progress, which were established by the Company’s board of directors. The Company’s board of directors determines if the performance conditions have been met. Stock-based compensation expense for these performance-based grants are recorded when management estimates that the vesting of these shares is probable based on the status of the Company’s research and development programs and other relevant factors. For the years ended December 31, 2019 and 2018, none of the performance-based metrics were deemed probable of achievement. Any change in these estimates will result in a cumulative adjustment in the period in which the estimate is changed, so that as of the end of a period, the cumulative compensation expense recognized for an award or grant equals the amount that would be recognized on a straight-line basis as if the current estimates had been utilized since the beginning of the service period. As of December 31, 2019, the aggregate estimated grant date fair values of options and restricted stock awards for which the satisfaction of the related-performance conditions have not been deemed probable were $663,484 and $24,850, respectively.

During the years ended December 31, 2019, 2018 and 2017, the Company recorded $5,561,895, $6,625,743 and $5,646,852, respectively, in stock-based compensation expense related to its stock option grants and restricted stock awards, as follows:


	Stock Option Grants						Restricted stock awards
	2019		2018		2017		2019		2018		2017
Research and development	$	2,348,205	$	2,884,689	$	2,127,386	$	23,793	$	202,809	$	157,480
General and administrative		3,189,897		3,491,432		3,279,626		—		46,813		82,360
	$	5,538,102	$	6,376,121	$	5,407,012	$	23,793	$	249,622	$	239,840

The following table summarizes the Company’s stock option activity:


		Weighted-		Weighted-
		Average		Average	Aggregate
	Number	Exercise		Contractual	Intrinsic
	of Shares	Price		Life (in Years)	Value
Outstanding as of December 31, 2017	2,386,538	$	12.53
Granted	875,416		11.34
Expired	(109,687)		9.20
Outstanding as of December 31, 2018	3,152,267		12.16
Granted	960,432		6.07
Exercised	(40,983)		4.63
Forfeited	(83,000)		9.48
Outstanding as of December 31, 2019	3,988,716		10.83	7.20	$	2,668,248
Exercisable as of December 31, 2019	2,439,217		11.98	6.29	$	1,047,743
Vested and expected to vest as of December 31, 2019	3,905,436	$	10.81

The weighted-average grant date fair value of options granted during the years ended December 31, 2019, 2018 and 2017 was $4.22, $7.84 and $12.95, respectively.

The fair values of stock options granted were calculated using the Black-Scholes option pricing model with the following weighted-average assumptions:


	Year ended December 31,
	2019	2018	2017
Weighted-average risk-free interest rate	2.36%	2.53%	2.11%
Expected term of options (in years)	6.16	6.12	6.12
Expected stock price volatility	79.85%	78.09%	77.00%
Expected dividend yield	0%	0%	0%

As of December 31, 2019, excluding performance-based stock options that have not been deemed probable, there was $7.4 million of unrecognized stock-based compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.09 years.

The following table summarizes the restricted stock award activity under the 2014 Plan:


		Weighted
		Average
		Grant Date
	Shares	Fair Value
Unvested as of December 31, 2017	108,730	$	1.65
Granted	10,500		11.86
Vested	(108,730)		1.65
Unvested as of December 31, 2018	10,500		11.86
Granted	8,600		4.42
Vested	(10,500)		11.86
Unvested as of December 31, 2019	8,600	$	4.42

As of December 31, 2019, excluding performance-based restricted stock awards that have not been deemed probable, there was $6,984 of unrecognized stock-based compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted-average period of 1.07 years. The Company expects that all 3,600 of the unvested, non-performance based, restricted stock awards will vest.