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Stockholders' Equity
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Stockholders' Equity

6. Stockholders’ Equity

Stock Plans

2024 Equity Incentive Plan

The Company’s 2024 Equity Incentive Plan (the 2024 Plan) became effective upon approval of the stockholders in May 2024 and is a successor and continuation of the 2010 Equity Incentive Plan (the 2010 Plan). The 2024 Plan permits the grant of awards to employees, non-employee directors and consultants. In addition, the 2024 Plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other awards. The 2024 Plan provides that, with limited exceptions, no award will vest until at least 12 months following the date of grant of the award; provided, however, that up to 5% of the aggregate number of shares that may be issued under the 2024 Plan may be subject to awards which do not meet such vesting requirements. The maximum term of any stock option or stock appreciation right awards under 2024 Plan is ten years. All shares that remained eligible for grant under the Company’s 2010 Equity Incentive Plan and 2023 Inducement Plan at the time of approval of the 2024 Plan were transferred to the 2024 Plan. At December 31, 2024, there were 13,798,565 shares of common stock available for new grants under the 2024 Plan.

2024 Inducement Plan

The Board adopted the Company’s 2024 Inducement Plan (Inducement Plan) in September 2024. The Inducement Plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other stock-related awards. Stock awards granted under the Inducement Plan may only be made to individuals who did not previously serve as employees or non-employee directors of the Company or an affiliate of the Company. In addition, stock awards must be approved by either a majority of the Company’s independent directors or the Compensation Committee. The terms of the Inducement Plan are otherwise substantially similar to the 2024 Plan. The maximum number of shares of Company common stock that may be issued under the Inducement Plan is 2,400,000 shares. At December 31, 2024, there were 1,491,346 shares available for new grants under the Inducement Plans.

2023 Inducement Plan

 

The Board adopted the Company’s 2023 Inducement Plan (2023 Inducement Plan) on February 1, 2023. The 2023 Inducement Plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards and other stock-related awards. Stock awards granted under the 2023 Inducement Plan may only be made to individuals who did not previously serve as employees or non-employee directors of the Company or an affiliate of the Company. In addition, stock awards must be approved by either a majority of the Company’s independent directors or the Compensation Committee. The terms of the 2023 Inducement Plan are otherwise substantially similar to the 2010 Plan. All shares that remained eligible for grant under the 2023 Inducement Plan at the time of approval of the 2024 Plan were transferred to the 2024 Plan.

2010 Equity Incentive Plan

The 2010 Plan, as amended to date, permits the grant of options to employees, directors and consultants. In addition, the 2010 Plan permits the grant of stock bonuses, rights to purchase restricted stock, and other stock awards. The exercise price of options granted under the 2010 Plan cannot be less than 100 percent of the fair market value of the common stock on the date of grant and the maximum term of any option is 10 years. Options granted under the 2010 Plan generally vest over a four-year period. All shares that remained eligible for grant under the Company’s 2004 Equity Incentive Plan (the 2004 Plan) at the time of approval of the 2010 Plan were transferred to the 2010 Plan. In June 2015, June 2016, June 2017, June 2018, June 2019 and June 2022, the Company’s stockholders approved amendments to its 2010 Plan to, among other things, increase the aggregate number of shares of common stock authorized for issuance under the plan by 5,000,000 shares, 3,000,000 shares, 5,500,000 shares, 6,700,000 shares, 8,300,000 shares and 6,000,000 shares, respectively. All shares that remained eligible for grant under the 2010 Plan at the time of approval of the 2024 Plan were transferred to the 2024 Plan.

Employee Stock Purchase Plan

The Company’s 2004 Employee Stock Purchase Plan (the Purchase Plan) became effective upon the closing of the Company’s initial public offering in June 2004. In June 2016, June 2019 and June 2020, the Company’s stockholders approved an amendment to the Purchase Plan to, among other things, increase the aggregate number of shares of common stock authorized for issuance under the Purchase Plan by 400,000 shares, 600,000 shares and 3,000,000 shares, respectively. At December 31, 2024, a total of 5,525,000 shares of common stock had been reserved for issuance under the Purchase Plan. At December 31, 2024, 1,713,498 shares of common stock remained available for issuance pursuant to the Purchase Plan. Eligible employees who elect to participate in an offering under the Purchase Plan may have up to 15 percent of their earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the Purchase Plan. The price of common stock purchased under the Purchase Plan is equal to 85 percent of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant purchase date.

Stock Option Activity

The equity plans provided for the grant of options to employees, directors and consultants. The exercise price of options granted under the equity plans were at 100 percent of the fair market value of the common stock on the date of grant and the maximum term of any option was 10 years. Options granted under the equity plans generally vested over a four-year period.

The following table summarizes the Company’s stock option activity under all equity plans during the year ended December 31, 2024:

 

 

Number of
Shares

 

 

Weighted
Average
Exercise
Price

 

 

Weighted
Average
Remaining
Contractual
Term
(years)

 

 

Aggregate
Intrinsic Value
(in thousands)

 

Outstanding at December 31, 2023

 

 

16,626,029

 

 

$

28.75

 

 

 

 

 

 

 

Granted

 

 

3,874,498

 

 

$

17.81

 

 

 

 

 

 

 

Exercised

 

 

(83,743

)

 

$

18.77

 

 

 

 

 

 

 

Cancelled/forfeited

 

 

(2,897,930

)

 

$

25.57

 

 

 

 

 

 

 

Outstanding at December 31, 2024

 

 

17,518,854

 

 

$

26.90

 

 

 

5.4

 

 

$

6,998

 

Exercisable at December 31, 2024

 

 

12,075,917

 

 

$

30.28

 

 

 

3.9

 

 

$

2,252

 

The aggregate intrinsic value of options exercisable as of December 31, 2024 is calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s common stock on that date, which was $18.35 per share. The aggregate intrinsic value of options exercised during the years ended December 31, 2024, 2023, and 2022 was approximately $0.3 million, $7.9 million, and $1.7 million, respectively, determined as of the date of exercise. The Company received approximately $1.6 million, $20.3 million and $3.7 million in cash from options exercised during the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted average per share fair value of options granted during the years ended December 31, 2024, 2023, and 2022 was approximately $10.42, $13.25, and $13.66, respectively. As of December 31, 2024, total unrecognized compensation cost related to stock options was approximately $53.6 million and the weighted average period over which this cost is expected to be recognized is approximately 2.8 years.

Restricted Stock Unit Activity

The following table summarizes the Company’s RSUs during the year ended December 31, 2024:

 

 

Number of
Shares

 

 

Weighted
Average Grant
Date Fair Value

 

 

Aggregate
Intrinsic Value
(in thousands)

 

Unvested at December 31, 2023

 

 

2,650,917

 

 

$

24.66

 

 

 

 

Granted

 

 

1,465,142

 

 

$

17.80

 

 

 

 

Vested

 

 

(928,071

)

 

$

26.75

 

 

 

 

Cancelled/forfeited

 

 

(474,488

)

 

$

22.29

 

 

 

 

Unvested at December 31, 2024

 

 

2,713,500

 

 

$

20.65

 

 

$

49,793

 

The total fair value of RSUs that vested during the years ended December 31 2024, 2023 and 2022 was $17.3 million, $12.6 million and $10.2 million, respectively. As of December 31, 2024, total unrecognized compensation cost related to RSUs was approximately $39.5 million and the weighted average period over which this cost is expected to be recognized is approximately 2.5 years.

Performance Stock Unit Activity

The following table summarizes the Company’s PSUs during the year ended December 31, 2024:

 

 

Number of
Shares

 

 

Weighted
Average Grant
Date Fair Value

 

 

Aggregate
Intrinsic Value
(in thousands)

 

Unvested at December 31, 2023

 

 

1,734,828

 

 

$

26.68

 

 

 

 

Granted

 

 

615,743

 

 

$

21.82

 

 

 

 

Vested

 

 

(629,199

)

 

$

26.15

 

 

 

 

Cancelled/forfeited

 

 

(500,582

)

 

$

25.41

 

 

 

 

Unvested at December 31, 2024(1)

 

 

1,220,790

 

 

$

25.02

 

 

$

22,401

 

__________________________________________

(1) The unvested balance consisted of 148,643 RSUs that have an accelerated vesting clause based on specified market condition target and continued employment through a minimum vesting period, 488,976 PSUs that vest upon achievement of certain pre-defined company-specific performance-based targets and 583,171 that vest based on the Company’s rTSR performance over a three-year measurement period.

The total fair value of PSUs that vested during the years ended December 31 2024 and 2023 was $10.2 million and $13.3 million, respectively. No PSUs vested during the year ended December 31, 2022. As of December 31, 2024, total unrecognized compensation cost related to PSUs was approximately $7.3 million and the weighted average remaining contractual term was 1.8 years.

Contingent Cash Awards

 

In November 2021, the Company established a plan whereby substantially all full-time employees excluding executive management are eligible to receive a series of cash bonuses over certain periods based on continued employment and the Company’s stock price reaching a pre-specified target. The maximum potential payout of the cash awards at the grant date was $15.1 million. The Company has determined that the cash awards were classified as liabilities pursuant to ASC Topic 718, Compensation – Stock Compensation. The Company estimates the fair value of the awards at each reporting period using the Monte Carlo simulation, which is recognized as compensation cost over the derived service period. Total fair value of the awards at the grant date was $4.4 million. The awards were forfeited in November 2024 as the Company’s stock price did not reach the pre-specified target and the Company recorded a reversal of $4.5 million of compensation expense related to the awards during the year ended December 31, 2024. During the year ended December 31, 2023, the awards had a total fair value of $5.2 million and the Company recorded a total of $3.6 million of compensation cost related to the awards.