Stock-Based Compensation Expense (Tables)

9 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation Expense Recognized in Accompanying Condensed Consolidated Statements of Operations

Total stock-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
RSUs and options	$	1,225	$	1,534	$	4,413	$	4,931
Employee stock purchase plan		69		106		194		381
Total stock compensation expense	$	1,294	$	1,640	$	4,607	$	5,312

Schedule of Employee Awards and Non-employee Director Award Plan Activity

During 2020, the Company granted the following awards:

	Three Months Ended			Three Months Ended			Three Months Ended			Nine Months Ended
	March 31, 2020			June 30, 2020			September 30, 2020			September 30, 2020
Employee awards:
Market RSUs		—			—			1,571,000	⁽⁷⁾		1,571,000
RSUs		230,000	⁽¹⁾		2,109,228	⁽²⁾		1,776,250	⁽⁸⁾		4,115,478
Options		78,500	⁽³⁾		117,900	⁽⁴⁾		—			196,400
Non-employee director awards:
RSUs		42,067	⁽⁵⁾		772,685	⁽⁶⁾		—			814,752
Total awards:
Market RSUs		—			—			1,571,000			1,571,000
RSUs		272,067			2,881,913			1,776,250			4,930,230
Options		78,500			117,900			—			196,400

(1)	RSUs had a weighted average grant date fair value of $1.25 per share and a primary vesting period of four years.

(2)	RSUs had a weighted average grant date fair value of $1.34 per share and a primary vesting period of four years.

(3)

Options had a weighted average exercise price of $1.25 per share and vest over a four year period. The weighted average grant date fair value was $0.93 per share, as determined using a Black-Scholes option pricing model, with the following key assumptions: risk-free interest rate of 0.79%; expected life of approximately 5.67 years; volatility of 93.83%, and dividend yield of zero.

(4)

Options had a weighted average exercise price of $1.34 per share and vest over a four year period. The weighted average grant date fair value was $0.99 per share, as determined using a Black-Scholes option pricing model, with the following key assumptions: risk-free interest rate of 0.39%; expected life of approximately 5.67 years; volatility of 93.83%, and dividend yield of zero.

(5)	RSUs had a weighted average grant date fair value of $1.17 per share and vested immediately upon grant, but the underlying shares of common stock will not be delivered until there is a separation of service, such as resignation, retirement or death.

(6)	RSUs had a weighted average grant date fair value of $1.34 per share and vested immediately upon grant, but the underlying shares of common stock will not be delivered until there is a separation of service, such as resignation, retirement or death.

(7)

Market RSUs had a grant date fair value of $3.77 per share and will vest on May 22, 2023 provided that the closing price of the Company’s common stock on such vesting date is not less than the closing price on August 27, 2020. The number of shares delivered on the vesting date is determined by the percentile ranking of MannKind total shareholder return (TSR) over the period from August 27, 2020 until May 22, 2023 related to the TSR of the Russell 3000 Pharmaceutical & Biotechnology Index over the same period, as follows: less than 25th percentile=0% of target, 25th percentile=50% of target, 50th percentile=100% of target, 75th percentile=200% percent of target, 90th percentile or higher=300% maximum. Payout values will be interpolated between the percentile rankings above.

(8)	RSUs had a weighted average grant date fair value of $1.70 per share and a primary vesting period of four years.