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Share-based compensation | 3 Months Ended
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Mar. 31, 2017
Share-based compensation |
Share-based compensation | 9 Share-based compensation The Company recognized share-based compensation expense totaling $1.6 million and $2.6 million during the three months ended March 31, 2017, and 2016, respectively. Share-based compensation expense recognized by classification included in the consolidated statements of operations and comprehensive loss was as follows:
|  | Three months ended March 31, |
|  | 2017 |  | 2016 |
|  | in thousands |
Research and development - employees |  | $ | 687 |  | $ | 859 |
Selling, general and administrative - employees |  | 918 |  | 1,119 |
Research and development - non-employees |  | — |  | 670 |
Total |  | $ | 1,605 |  | $ | 2,648 |
Share-based compensation expense recognized by award type was as follows:
|  | Three months ended March 31, |
|  | 2017 |  | 2016 |
|  | in thousands |
Award type |  |  |  |  |
Share options |  | $ | 826 |  | $ | 2,384 |
Restricted share units (“RSUs”) |  | 516 |  | 152 |
Performance share units (“PSUs”) |  | 263 |  | 112 |
Total |  | $ | 1,605 |  | $ | 2,648 |
As of March 31, 2017, the unrecognized compensation costs related to unvested awards under the various share-based compensation plans were:
|  | Unrecognized compensation costs |  | Weighted-average remaining period for recognition (in years) |
|  | in thousands |  |  |
Award type |  |  |  |  |
Stock options |  | $ | 8,324 |  | 2.85 |
Restricted stock units |  | 3,369 |  | 2.22 |
Performance stock units |  | 2,703 |  | 2.60 |
Total |  | $ | 14,396 |  | 2.66 |
The Company satisfies the exercise of share options and vesting of RSUs and PSUs through newly issued shares. The Company’s share-based compensation plans include the 2014 Amended and Restated Share Option Plan (the “2014 Plan”) and inducement grants under Rule 5653(c)(4) of the NASDAQ Global Market with characteristics similar to the 2014 Plan (classified as “Other Plans”). The Company previously had a 2012 Equity Incentive Plan (the “2012 Plan”) and issued options to purchase common shares to the shareholders of 4D in connection with a collaboration and license agreement between the Company and 4D dated as of January 2014 (classified as Other Plans). 2012 Plan The following table summarizes option activity under the Company’s 2012 Plan for the three months ended March 31, 2017:
|  | 2012 Plan |
|  | Options |  | Weighted average exercise price |
Outstanding at December 31, 2016 |  | 483,006 |  | € | 5.13 |
Exercised |  | (134,974 | ) | € | 3.07 |
Outstanding, fully vested and exercisable at March 31, 2017 |  | 348,032 |  | € | 5.92 |
Options exercised during the three months ended March 31, 2017, resulted in total proceeds to the Company of $0.4 million. 2014 Plan Share options The following table summarizes option activity under the Company’s 2014 Plan for the three months ended March 31, 2017:
|  | 2014 plan |
|  | Options |  | Weighted average exercise price |
Outstanding at December 31, 2016 |  | 1,812,766 |  | $ | 12.47 |
Granted |  | 508,500 |  | $ | 5.63 |
Forfeited |  | (40,371 | ) | $ | 12.76 |
Expired |  | (12,952 | ) | $ | 18.30 |
Outstanding at March 31, 2017 |  | 2,267,943 |  | $ | 10.90 |
Fully vested and exercisable |  | 746,557 |  | $ | 13.01 |
Outstanding and expected to vest |  | 1,521,386 |  | $ | 9.86 |
During the three months ended March 31, 2017, the Company granted options to purchase an aggregate of 508,500 common shares with an aggregate weighted average grant date fair value of $1.6 million. This included an option to purchase 175,000 options common shares the Company granted to its Chief Executive Officer and options to purchase an aggregate 69,000 common shares that the Company granted to its non-executive directors, each such option vesting after one year from the date of grant. The fair value of each option issued was estimated at the date of grant using the Hull & White option pricing model with the following weighted-average assumptions:
|  | Three months ended March 31, |
|  | 2017 |  | 2016 |
Assumptions |  |  |  |  |
Expected volatility |  | 75% |  | 75% |
Expected terms (in years) |  | 10 years |  | 10 years |
Risk free interest rate |  | 2.53% - 2.70% |  | 0.16% - 0.54% |
Expected dividends |  | 0% |  | 0% |
Restricted Share Units (RSUs) The following table summarizes the RSUs activity for the three months ended March 31, 2017:
|  | Number of shares |  | Weighted average grant-date fair value |
Undistributed at December 31, 2016 |  | 307,063 |  | $ | 9.11 |
Granted |  | 285,500 |  | $ | 5.95 |
Distributed |  | (25,000 | ) | $ | 18.21 |
Forfeited |  | (375 | ) | $ | 13.03 |
Undistributed at March 31, 2017 |  | 567,188 |  | $ | 7.12 |
During the three months ended March 31, 2017, the Company granted an aggregate of 285,500 RSUs with an aggregate weighted average grant date fair value of $1.7 million. The grants include 69,000 RSUs granted to non-executive directors, each such grant to vest after one year, and 175,000 RSUs granted to the Company’s Chief Executive Officer, which vest in equal tranches on February 21, 2018, and February 21, 2019. During the three months ended March 31, 2017, the Company distributed 25,000 common shares in connection with the settlement of vested RSUs. Performance Share Units (PSUs) The following table summarizes the PSUs activity for the three months ended March 31, 2017:
|  | Number of shares |  | Weighted average grant-date fair value |
Undistributed at December 31, 2016 |  | 111,564 |  | $ | 5.76 |
Distributed |  | (58,500 | ) | $ | 5.76 |
Undistributed at March 31, 2017 |  | 53,064 |  | $ | 5.76 |
In January 2017, the Company awarded an aggregate of 423,500 PSUs to members of its senior management, including 162,500 PSUs to its Chief Executive Officer. As awarding these PSUs is discretionary based on the Board’s assessment of 2017 performance, these PSUs are not recorded in the above table. In September 2016, the Company awarded 61,560 PSUs to its Chief Executive Officer, subject to the successful implementation of the strategic plan. As awarding thee PSUs is discretionary based on the Board’s assessment of the Chief Executive Officer’s 2017 performance, these PSUs are also not recorded in the above table. Other Plans The following table summarizes option activity under the Company’s Other Plans for the three months March 31, 2017:
|  | Other plans |
|  | Options |  | Weighted average exercise price |
Outstanding at December 31, 2016 |  | 187,500 |  | $ | 17.93 |
Granted |  | 150,000 |  | $ | 5.31 |
Outstanding at March 31, 2017 |  | 337,500 |  | $ | 12.32 |
Fully vested and exercisable |  | 62,500 |  | $ | 27.82 |
Outstanding and expected to vest |  | 275,000 |  | $ | 8.80 |
Under Rule 5653(c)(4) of the NASDAQ Global Market, the Company grants share options to certain employees as a material inducement to enter into employment with the Company. During the three months ended March 31, 2017, the Company granted 150,000 options with an aggregate weighted average grant date fair value of $0.5 million. No options were exercised during the three months ended March 31, 2017. The fair value of the inducement grant options was estimated at the date of grant using the Hull & White option pricing model with the same assumptions as used in determining the fair value of options issued under the 2014 Plan.

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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 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: 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=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: 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 5: 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 6: 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 + Details
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