Share-based Compensation

Service Vesting-Based Stock Options

The following is a summary of service vesting based stock option activity for the

three

month period ended

March 31, 2020,

and the status of stock options outstanding at

March 31, 2020:

	Three Month s Ended
	March 31, 20 20
	Options			Weighted Avg. Exercise Price
Outstanding at beginning of period		1,570,455		$	1.96
Granted		—		$	—
Exercised		(251,180	)	$	1.84
Forfeited		—		$	—
Expired		—		$	—
Outstanding at March 31, 2020		1,319,275		$	1.98

Service vesting-based stock options exercisable at March 31, 2020		1,263,377		$	1.96

We recognized stock compensation expense of

$61,000

and

$144,000

related to service vesting-based options during the

three

month periods ending

March 31, 2020

and

2019,

respectively. As of

March 31, 2020,

there was

$9.9

million of aggregate intrinsic value of outstanding service vesting-based stock options, including

$9.5

million of aggregate intrinsic value of exercisable service vesting-based stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on

March 31, 2020.

This amount will change based on the fair market value of the Company’s stock. During the quarters ended

March 31, 2020

and

2019

intrinsic value of service vesting-based awards exercised was

$3.0

million and

$1.4

million, respectively. Total unrecognized compensation cost of service vesting-based stock options at

March 31, 2020

$86,000

is expected to be recognized over a weighted average period of

1.2

years.

Performance-based Stock Options

The following is a summary of performance-based stock option activity under our stock option plans for the

three

months ended

March 31, 2020,

and the status of performance-based stock options outstanding at

March 31, 2020:

	Three Month s Ended March 31, 2020
	Options			Wtd. Avg. Exercise Price
Outstanding at beginning of period		737,497		$	1.64
Granted		—		$	—
Exercised		(17,113	)	$	1.64
Outstanding performance-based at March 31, 2020		720,384		$	1.64

Performance-based stock options exercisable at March 31, 2020		720,384		$	1.64

As of

March 31, 2020,

there was

$5.7

million of aggregate intrinsic value of outstanding and exercisable performance-based stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on

March 31, 2020.

This amount will change based on the fair market value of the Company’s stock. The weighted average remaining contractual life of performance-based options outstanding and exercisable at

March 31, 2020,

1.7

years. All compensation cost of performance-based stock options outstanding at

March 31, 2020

has been recognized.

There were

stock options granted to employees and non-employee directors in the

three

month periods ended

March 31, 2020

and

2019.

Restricted Stock

Service vesting-based restricted stock

The following is a summary of service vesting-based restricted stock activity for the

three

month period ended

March 31, 2020,

and the status of unvested service vesting-based restricted stock outstanding at

March 31, 2020:

	Thr ee Months Ended March 31, 20 20
	Number of Restricted Shares			Grant-Date Fair Value
Unvested outstanding at beginning of period		429,399		$	13.25
Granted		175,971		$	9.43
Vested		(53 026	)	$	12.90
Forfeited		(7,000	)	$	15.92
Unvested outstanding at March 31, 2020		545,344		$	12.01

The aggregate fair value of the service vesting-based awards granted during the

three

months ended

March 31, 2020

and

2019

was

$1.7

million and

$2.6

million, respectively, which represents the market value of BioLife common stock on the date that the restricted stock awards were granted. The aggregate fair value of the service vesting-based restricted stock awards that vested was

$813,000

and

$853,000

for the

three

months ended

March 31, 2020

and

March 31, 2019,

respectively.

We recognized stock compensation expense of

$394,000

and

$255,000

related to service vesting-based restricted stock awards for the

three

months ended

March 31, 2020

and

March 31, 2019,

respectively. As of

March 31, 2020,

there was

$5.7

million in unrecognized compensation costs related to service vesting-based restricted stock awards. We expect to recognize those costs over

3.3

years.

Performance-based restricted stock

March 25, 2020

the Company granted

82,805

shares of performance-based stock to its executives in the form of restricted stock. The shares granted contain a performance condition based on several Company metrics related to

2020

performance. The performance-based restricted stock awards will vest as to between

and

125%

of the number of restricted shares granted to each recipient. The grant date fair value of this award was

$9.18

per share. The fair value of this award will be expensed on a straight-line basis over the requisite service period ending on

December 31, 2020.

We recognized stock compensation expense of

$189,000

for the

three

months ended

March 31, 2020

related to performance-based restricted stock awards. As of

March 31, 2020,

there was

$571,000

in unrecognized non-cash compensation costs related to performance-based restricted stock awards expected to vest. We expect to recognize those costs over

0.8

years.

Performance-based restricted stock in lieu of cash

March 25, 2020

the board of directors granted

34,154

restricted stock awards, at a fair value grant date of

$9.18

per share, in lieu of the

2019

cash performance bonus for our executive compensation plan. The award vests in full on

September 25, 2020

regardless of employment status on that date. All expenses related to these awards were incurred in the year ended

December 31, 2019.

Market-based restricted stock

February 25, 2019

the Company granted

94,247

shares and on

April 1, 2019

granted

29,604

shares of market-based stock to its executives in the form of restricted stock. The shares granted contain a market condition based on Total Shareholder Return (“TSR”). The TSR market condition measures the Company’s performance against a peer group. The market-based restricted stock awards will vest as to between

and

200%

of the number of restricted shares granted to each recipient based on our total shareholder return during the period beginning on

January 1, 2019

through

December 31, 2020

as compared to the total shareholder return of

of our peers. The fair value of this award was determined using a Monte Carlo simulation with the following assumptions: a historical volatility of

69%,

dividend yield and a risk-free interest rate of

2.5%.

The historical volatility was based on the most recent

-year period for the Company and correlated with the components of the peer group. The stock price projection for the Company and the components of the peer group assumes a

dividend yield. This is mathematically equivalent to reinvesting dividends in the issuing entity over the performance period. The risk-free interest is based on the yield on the U.S. Treasury Strips as of the Measurement Date with a maturity consistent with the

-year term associated with the market condition of the award. The fair value of this award will be expensed on a straight-line basis over the grant date to the vesting date of

December 31, 2020.

March 25, 2020

the Company granted

109,140

shares of market-based stock to its executives in the form of restricted stock. The shares granted contain a market condition based on TSR. The TSR market condition measures the Company’s performance against a peer group. The market-based restricted stock awards will vest as to between

and

200%

of the number of restricted shares granted to each recipient based on our total shareholder return during the period beginning on

January 1, 2020

through

December 31, 2021

as compared to the total shareholder return of

of our peers. The fair value of this award was determined using a Monte Carlo simulation with the following assumptions: a historical volatility of

78%,

dividend yield and a risk-free interest rate of

0.3%.

The historical volatility was based on the most recent

-year period for the Company and correlated with the components of the peer group. The stock price projection for the Company and the components of the peer group assumes a

-year term associated with the market condition of the award. The fair value of this award will be expensed on a straight-line basis over the grant date to the vesting date of

December 31, 2021.

We recognized stock compensation expense of

$469,000

and

$132,000

for the

three

months ended

March 31, 2020

and

2019,

respectively, related to market-based restricted stock awards. As of

March 31, 2020,

there was

$2.6

million in unrecognized non-cash compensation costs related to market-based restricted stock awards expected to vest. We expect to recognize those costs over

1.2

years.

We recorded total stock compensation expense for the

three

month periods ended

March 31, 2020

and

2019,

as follows:

	Three Months Ended March 31,
(In thousands)	20 20		201 9
Research and development costs	$	174	$	67
Sales and marketing costs		229		154
General and administrative costs		577		278
Cost of product sales		133		32
Total	$	1,113	$	531