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Share-based Compensation | 12 Months Ended
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Dec. 31, 2014
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Share-based Compensation | (8) Share-based Compensation Stock Plans The Company’s equity incentive plan, the 2013 Equity Incentive Plan (the Equity Plan), was approved by stockholders on September 17, 2013. The maximum number of shares issuable under this plan is 2,250,000 shares. The Equity Plan provides for the granting of stock options (including indexed options), restricted stock units, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, performance shares, performance units and deferred stock units. Under the Equity Plan, awards may be granted to employees, directors and consultants of ARCA, except for incentive stock options, which may be granted only to employees. As of December 31, 2014, options and awards for 1,437,477 shares were outstanding under the Equity Plan, and 672,852 shares were reserved for future awards. In general, the Equity Plan authorizes the grant of stock options that vest at rates set by the Board of Directors or the Compensation Committee thereof. Generally, stock options granted by ARCA under the equity incentive plans become exercisable ratably for a period of three to four years from the date of grant and have a maximum term of ten years. The exercise prices of stock options under the equity incentive plan generally meet the following criteria: the exercise price of incentive stock options must be at least 100% of the fair market value on the grant date and exercise price of options granted to 10% (or greater) stockholders must be at least 110% of the fair market value on the grant date. In conjunction with the adoption of the Equity Plan, the Company discontinued grants under its previous plan, the Amended and Restated ARCA biopharma, Inc. 2004 Equity Incentive Plan (the 2004 Plan), effective September 17, 2013. The 2004 Plan expired in 2014; however, options outstanding under the 2004 plan will continue to vest according to the original terms of each grant. As of December 31, 2014, options to purchase 59,776 shares with a weighted average exercise price of $15.10 per share were outstanding under this plan. Other stock plans that were assumed by ARCA in the Merger still have options outstanding that will continue to vest according to the original terms of each grant, but no new options can be granted under these plans, as the plans have expired. As of December 31, 2014, options to purchase 42,291 shares with a weighted average exercise price of $17.78 were outstanding under these plans. The Company granted options and awards for 420,279 and 1,160,535 shares of common stock in the years ended December 31, 2014 and 2013, respectively. The fair values of the majority of employee stock options granted in the years ended December 31, 2014 and 2013 were estimated at the date of grant using the Black-Scholes model with the following assumptions and had the following estimated weighted average grant date fair value per share:
|  | Years Ended December 31, |
|  | 2014 |  |  | 2013 |
Expected term |  | 5.9 years |  |  | 5.8 years |
Expected volatility |  |  | 94 | % |  |  | 96 | %
Risk-free interest rate |  |  | 1.53 | % |  |  | 1.62 | %
Expected dividend yield |  |  | 0 | % |  |  | 0 | %
Weighted-average grant date fair value per share |  | $ | 1.37 |  |  | $ | 1.05 |
A summary of ARCA’s stock option and stock award activities for the years ended December 31, 2014 and 2013, and related information as of December 31, 2014, is as follows:
|  | Years Ended December 31, |
|  | 2014 |  |  | 2013 |
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Number of Options |  |  | Weighted Average Exercise Price |
Options outstanding, beginning of period |  |  | 843,442 |  |  | $ | 3.76 |  |  |  | 144,019 |  |  | $ | 18.28 |
Granted |  |  | 228,579 |  |  |  | 1.81 |  |  |  | 741,535 |  |  |  | 1.38 |
Exercised |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Forfeited and cancelled |  |  | (3,506 | ) |  |  | 140.67 |  |  |  | (42,112 | ) |  |  | 11.62 |
Options outstanding, end of period |  |  | 1,068,515 |  |  | $ | 2.89 |  |  |  | 843,442 |  |  | $ | 3.76 |
Options exercisable, end of period |  |  | 494,291 |  |  | $ | 4.38 |  |  |  | 194,550 |  |  | $ | 11.14 |
Options vested and expected to vest |  |  | 1,066,712 |  |  | $ | 2.89 |  |  |  |  |  |  |  |  |
The total intrinsic value of options exercised for the years ended December 31, 2014 and 2013 was $0 and $0, respectively. As of December 31, 2014, the unrecognized compensation expense related to unvested options, excluding estimated forfeitures, was $633,000 which is expected to be recognized over a weighted average period of 2.2 years. The Company recognizes compensation costs for its share-based awards on a straight-line basis over the requisite service period for the entire award, as adjusted for expected forfeitures. The following table summarizes information about stock options outstanding and exercisable as of December 31, 2014:
|  |  |  |  |  |  |  |  |  | Options Outstanding |  |  | Options Exercisable |
Range of Exercise Prices |  |  | Number Outstanding |  |  | Weighted Average Remaining Contractual Term (in years) |  |  | Weighted Average Exercise Price |  |  | Number Exercisable |  |  | Weighted Average Exercise Price |
$ | 0.36 |  |  | — |  | $ | 1.33 |  |  |  | 29,933 |  |  |  | 9.75 |  |  | $ | 1.05 |  |  |  | 704 |  |  | $ | 1.08 |
| 1.38 |  |  | — |  |  | 1.38 |  |  |  | 727,869 |  |  |  | 8.47 |  |  |  | 1.38 |  |  |  | 329,189 |  |  |  | 1.38 |
| 1.40 |  |  | — |  |  | 1.95 |  |  |  | 212,495 |  |  |  | 9.11 |  |  |  | 1.89 |  |  |  | 70,410 |  |  |  | 1.84 |
| 1.96 |  |  | — |  |  | 22.98 |  |  |  | 82,300 |  |  |  | 4.44 |  |  |  | 13.68 |  |  |  | 78,070 |  |  |  | 13.55 |
| 22.99 |  |  | — |  |  | 33.42 |  |  |  | 15,918 |  |  |  | 3.74 |  |  |  | 32.87 |  |  |  | 15,918 |  |  |  | 32.87 |
|  |  |  |  |  |  |  |  |  |  | 1,068,515 |  |  |  | 8.25 |  |  | $ | 2.89 |  |  |  | 494,291 |  |  | $ | 4.38 |
Restricted Stock Units The Company began granting restricted stock units (RSUs) to employees during 2013 in conjunction with the adoption of its 2013 Equity Incentive Plan. The fair value of RSU awards is the closing price of the Company’s common stock on the date of grant and is recognized as compensation expense on a straight-line basis over the respective vesting period. The stock awards granted have a requisite service period of three or four years with annual vesting on the grant anniversary date. A summary of RSU activity for the years ended December 31, 2014 and 2013 is presented below:
|  | Years Ended December 31, |
|  | 2014 |  |  | 2013 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Restricted stock units outstanding, beginning of period |  |  | 419,000 |  |  | $ | 1.39 |  |  |  | — |  |  | $ | — |
Granted |  |  | 191,700 |  |  |  | 1.95 |  |  |  | 419,000 |  |  |  | 1.39 |
Vested and released |  |  | (139,671 | ) |  |  | 1.39 |  |  |  | — |  |  |  | — |
Forfeited and cancelled |  | — |  |  | — |  |  | — |  |  | — |
Restricted stock units outstanding, end of period |  |  | 471,029 |  |  | $ | 1.62 |  |  |  | 419,000 |  |  | $ | 1.39 |
As of December 31, 2014, the total unrecognized compensation cost related to unvested stock awards was approximately $629,000. This cost will be recognized on a straight-line basis over the next 2.4 years and will be adjusted for estimated forfeitures. Non-cash Stock-based Compensation For the years ended December 31, 2014 and 2013, the Company recognized the following non-cash, share-based compensation expense (in thousands):
| December 31, |
| 2014 |  |  | 2013 |
Research and development | $ | 158 |  |  | $ | 77 |
General and administrative | $ | 489 |  |  | $ | 206 |
Total | $ | 647 |  |  | $ | 283 |
Stock-based compensation expense related to non-employees was negligible in 2014 and 2013. ARCA did not recognize any tax benefit related to employee stock-based compensation cost as a result of the full valuation allowance on its net deferred tax assets.

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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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