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Stock award plan | 3 Months Ended
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Mar. 31, 2015
Stock award plan |
Stock award plan | 8.Stock award plan On March 5, 2013, the Company’s Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards in the aggregate of 739,937 shares of common stock. On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. In May 2013, the Company’s Board of Directors and stockholders increased by 2,500,000 the number of shares authorized under the 2009 Equity and Long Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. In May 2013, the Company’s Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company’s IPO. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. The number of shares of common stock reserved for issuance under the 2013 Long Term Incentive Plan is the sum of (1) 245,000 shares of common stock available for issuance under the Company’s 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan, (2) the number of shares (up to 3,040,444 shares) equal to the sum of the number of shares of common stock subject to outstanding awards under the Company’s 1998 Employee, Director and Consultant Stock Option Plan, 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year until the expiration of the 2013 Long Term Incentive Plan, equal to the lowest of 2,500,000 shares of common stock, 4% of the number of shares of common stock outstanding on the first day of the fiscal year and an amount determined by the Company’s Board of Directors. From January 1, 2015 through March 31, 2015, the Company issued a total of 1,456,550 stock options to various employees. Of those, 93,350 were inducement grants for non-statutory stock options. The inducement grant awards were made pursuant to the NASDAQ inducement grant exception as a material component of our new hires’ employment compensation. A summary of stock option activity is as follows:
|  | Number of options |  | Weighted- average exercise price |  | Weighted- average remaining contractual term |  | Aggregate intrinsic value |
|  |  |  |  |  |  |  | (in thousands) |
Outstanding at December 31, 2014 |  | 3,432,972 |  | $ | 25.00 |  |  |  |  |
Granted |  | 1,456,550 |  | $ | 51.02 |  |  |  |  |
Exercised |  | (234,830 | ) | $ | 12.86 |  |  |  |  |
Forfeited |  | (26,265 | ) | $ | 47.52 |  |  |  |  |
Expired |  | (594 | ) | $ | 388.53 |  |  |  |  |
Outstanding at March 31, 2015 |  | 4,627,833 |  | $ | 33.60 |  | 8.9 years |  | $ | 140,399 |
Vested or Expected to vest at March 31, 2015 |  | 4,332,726 |  | $ | 32.74 |  | 8.9 years |  | $ | 133,232 |
Exercisable at March 31, 2015 |  | 1,037,262 |  | $ | 30.98 |  | 8.2 years |  | $ | 45,137 |
The fair value of grants made in the three months ended March 31, 2015 was contemporaneously estimated on the date of grant using the following assumptions:
|  | Three months ended March 31, 2015 |
Risk-free interest rate |  | 1.54% — 1.77% |
Expected volatility |  | 67%-69% |
Expected term |  | 5.50 - 6.11 years |
The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the three month period ended March 31, 2015 was $31.82 per share. The Company uses the “simplified method” to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. Restricted Stock Awards—Restricted stock awards are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. The following table summarizes information on the Company’s restricted stock:
|  | Restricted Stock |
|  | Number of Shares |  | Weighted Average Grant Date Fair Value |
January 1, 2015 |  | 718,400 |  | $ | 10.72 |
Granted |  | — |  | — |
Vested |  | (350,084 | ) | $ | 10.59 |
Forfeited |  | (3,346 | ) | $ | 10.82 |
Unvested at March 31, 2015 |  | 364,970 |  | $ | 10.85 |
The Company recorded share-based compensation expense in the statement of operations as follows:
|  | Three Months Ended March 31, |
|  | 2015 |  | 2014 |
Research and development |  | $ | 4,667 |  | $ | 1,944 |
Selling, general and administrative |  | 5,081 |  | 1,761 |
Total |  | $ | 9,748 |  | $ | 3,705 |
As of March 31, 2015 there was approximately $70.6 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 2009 Equity and Long Term Incentive Plan, 2013 Long Term Incentive Plan and equity awards made pursuant to the NASDAQ inducement grant exception for new hires. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 3.0 years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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