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Equity Incentive Awards and Warrants | 12 Months Ended
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Dec. 31, 2011
Equity Incentive Awards and Warrants [Abstract] |
Equity Incentive Awards and Warrants | Equity Incentive Awards and Warrants Equity Incentive Plans Equity Incentive Plan: In September 1995, Lexicon adopted the 1995 Stock Option Plan, which was subsequently amended and restated in February 2000 as the 2000 Equity Incentive Plan, and later amended and restated in April 2009 as the Equity Incentive Plan (the “Equity Incentive Plan”). The Equity Incentive Plan provides for the grant of incentive stock options to employees and nonstatutory stock options to employees, directors and consultants of the Company. The plan also permits the grant of stock bonus awards, restricted stock awards, restricted stock unit (phantom stock) awards and stock appreciation rights. Incentive and nonstatutory stock options have an exercise price of 100% or more of the fair market value of our common stock on the date of grant. The purchase price of restricted stock awards may not be less than 85% of fair market value. However, the plan administrator may award stock bonus awards in consideration of past services or phantom stock awards without a purchase payment. Shares may be subject to a repurchase option in the discretion of the plan administrator. Most options granted under the Equity Incentive Plan become vested and exercisable over a period of four years; however some have been granted with different vesting schedules. Options granted under the Equity Incentive Plan have a term of ten years from the date of grant. The total number of shares of common stock that may be issued pursuant to stock awards under the Equity Incentive Plan shall not exceed in the aggregate 35,000,000 shares. No more than 3,500,000 shares may be issued pursuant to awards other than stock options and stock appreciation rights. As of December 31, 2011, an aggregate of 35,000,000 shares of common stock had been reserved for issuance, options to purchase 19,777,955 shares and 2,477,800 restricted stock units were outstanding, 4,451,082 shares had been issued upon the exercise of stock options and 740,300 shares had been issued pursuant to stock bonus awards or restricted stock awards granted under the Equity Incentive Plan. Non-Employee Directors’ Stock Option Plan: In February 2000, Lexicon adopted the 2000 Non-Employee Directors’ Stock Option Plan, which was subsequently amended and restated in April 2009 as the Non-Employee Directors’ Stock Option Plan, (the “Directors’ Plan”) to provide for the automatic grant of nonstatutory stock options to non-employee directors of the Company. Under the Directors’ Plan, non-employee directors receive an initial option to purchase 30,000 shares of common stock. In addition, on the day following each of the Company’s annual meetings of stockholders, each non-employee director who has been a director for at least six months is automatically granted an option to purchase 10,000 shares of common stock, and the non-employee chairman of the board of directors is automatically granted an option to purchase 20,000 shares of common stock. Initial option grants become vested and exercisable over a period of five years and annual option grants become vested over a period of 12 months from the date of grant. Options granted under the Directors’ Plan have an exercise price equal to the fair market value of the Company’s common stock on the date of grant and a term of ten years from the date of grant. The total number of shares of common stock that may be issued pursuant to stock awards under the Directors’ Plan shall not exceed in the aggregate 1,200,000 shares. As of December 31, 2011, an aggregate of 1,200,000 shares of common stock had been reserved for issuance, options to purchase 698,000 shares were outstanding, and none had been exercised under the Directors’ Plan. Coelacanth Corporation 1999 Stock Option Plan: Lexicon assumed the Coelacanth Corporation 1999 Stock Option Plan (the “Coelacanth Plan”) and the outstanding stock options under the plan in connection with its July 2001 acquisition of Coelacanth Corporation. The Company will not grant any further options under the plan. As outstanding options under the plan expire or terminate, the number of shares authorized for issuance under the plan will be correspondingly reduced. The purpose of the plan was to provide an opportunity for employees, directors and consultants of Coelacanth to acquire a proprietary interest, or otherwise increase their proprietary interest, in Coelacanth as an incentive to continue their employment or service. Both incentive and nonstatutory options are outstanding under the plan. Most outstanding options vest over time and expire ten years from the date of grant. The exercise price of options awarded under the plan was determined by the plan administrator at the time of grant. In general, incentive stock options have an exercise price of 100% or more of the fair market value of Coelacanth common stock on the date of grant and nonstatutory stock options have an exercise price as low as 85% of fair market value on the date of grant. As of December 31, 2011, an aggregate of 27,917 shares of common stock had been reserved for issuance, there were no options to purchase shares of common stock outstanding and 27,917 shares of common stock had been issued upon the exercise of stock options issued under the Coelacanth Plan. Stock Option Activity: The following is a summary of option activity under Lexicon’s stock option plans:
|  | 2011 |  | 2010 |  | 2009
(in thousands, except exercise price data) |  | Options |  | Weighted Average Exercise Price |  | Options |  | Weighted Average Exercise Price |  | Options |  | Weighted Average Exercise Price
Outstanding at beginning of year |  | 19,598 |  |  | $ | 3.46 |  |  | 17,346 |  |  | $ | 4.16 |  |  | 16,898 |  |  | $ | 5.13 |
Granted |  | 2,974 |  |  | 1.80 |  |  | 4,928 |  |  | 1.87 |  |  | 4,864 |  |  | 1.44 |
Exercised |  | (130 | ) |  | 1.46 |  |  | (11 | ) |  | 2.15 |  |  | (121 | ) |  | 2.18 |
Expired |  | (1,662 | ) |  | 8.50 |  |  | (1,912 | ) |  | 6.40 |  |  | (3,372 | ) |  | 5.66 |
Forfeited |  | (304 | ) |  | 1.76 |  |  | (753 | ) |  | 1.76 |  |  | (923 | ) |  | 2.46 |
Outstanding at end of year |  | 20,476 |  |  | 2.84 |  |  | 19,598 |  |  | 3.46 |  |  | 17,346 |  |  | 4.16 |
Exercisable at end of year |  | 13,940 |  |  | $ | 3.34 |  |  | 11,845 |  |  | $ | 4.54 |  |  | 10,462 |  |  | $ | 5.69 |
The weighted average estimated grant date fair value of options granted during the years ended December 31, 2011, 2010 and 2009 were $1.36, $1.40 and $1.04, respectively. The total intrinsic value of options exercised during the years ended December 31, 2011, 2010 and 2009 were $63,000, $1,100 and $600, respectively. The weighted average remaining contractual term of options outstanding and exercisable was 6.3 and 5.3 years, respectively, as of December 31, 2011. At December 31, 2011, the aggregate intrinsic value of the outstanding options and the exercisable options was $14,000 and $14,000, respectively. The following is a summary of the nonvested options as of December 31, 2011, and changes during the year then ended, under Lexicon’s stock option plans:
|  | Options |  | Weighted Average Grant Date Fair Value
|  | (in thousands) |  |
Nonvested at beginning of year |  | 7,753 |  |  | $ | 1.32 |
Granted |  | 2,974 |  |  | 1.36 |
Vested |  | (3,887 | ) |  | 1.35 |
Forfeited |  | (304 | ) |  | 1.21 |
Nonvested at end of year |  | 6,536 |  |  | $ | 1.33 |
Stock Bonus and Restricted Stock Unit Activity: During the year ended December 31, 2011, Lexicon granted its officers 200,277 shares of stock bonus awards in lieu of cash bonus awards. The stock bonus awards had a weighted average grant date fair value of $1.81 per share and vested immediately. During the year ended December 31, 2011, Lexicon granted its employees restricted stock units in lieu of or in addition to annual stock option awards. These restricted stock units vest in four annual installments. The following is a summary of restricted stock units activity under Lexicon’s stock-based compensation plans for the year ended December 31, 2011:
|  | Shares |  | Weighted Average Grant Date Fair Value
|  | (in thousands) |  |
Outstanding at December 31, 2010 |  | — |  |  | $ | — |
Granted |  | 2,196 |  |  | 1.81 |
Forfeited |  | (69 | ) |  | 1.81 |
Nonvested at December 31, 2011 |  | 2,127 |  |  | $ | 1.81 |
During the year ended December 31, 2010, Lexicon granted certain employees restricted stock units with a performance condition. The shares subject to the restricted stock units granted in 2010 vest upon the dosing of the first patient in a pivotal human clinical trial in any country, the results of which could be used to establish safety and efficacy of a pharmaceutical product discovered or developed by Lexicon as a basis for a New Drug Application. Stock-based compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. The following is a summary of performance-based restricted stock units activity under Lexicon's stock-based compensation plans for the year ended December 31, 2011:
|  | Shares |  | Weighted Average Grant Date Fair Value
|  | (in thousands) |  |
Outstanding at December 31, 2010 |  | 361 |  |  | $ | 1.90 |
Forfeited |  | (11 | ) |  | 1.90 |
Nonvested at December 31, 2011 |  | 350 |  |  | $ | 1.90 |
Warrants In connection with the acquisition of Coelacanth in July 2001, Lexicon assumed Coelacanth’s outstanding warrants to purchase 25,169 shares of common stock. The warrants expired on March 31, 2009. The fair value of the warrants was included in the total purchase price for the acquisition. Aggregate Shares Reserved for Issuance As of December 31, 2011, an aggregate of 22,953,755 shares of common stock were reserved for issuance upon exercise of outstanding stock options and vesting of outstanding restricted stock units and 8,054,863 additional shares were available for future grants under Lexicon’s equity incentive plans. The Company has a policy of using either authorized and unissued shares or treasury shares, including shares acquired by purchase in the open market or in private transactions, to satisfy equity award exercises.

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