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Compensation and Other Benefit Plans | 12 Months Ended
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Dec. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Compensation and Other Benefit Plans | 11. Compensation and Other Benefit Plans The Company grants qualified and non-qualified stock options, RSUs, common stock and other stock-based awards under various plans to directors, officers, employees and other individuals. Stock options are granted at exercise prices of not less than the fair market value of the Company’s common stock on the date of grant. Additionally, the Company has an Employee Stock Purchase Plan (“ESPP”) that allows employees to purchase Company shares at a purchase price equal to 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last day of the offering period. Employee Stock Purchase Plan In May 2015, the Company’s stockholders approved the 2015 Employee Stock Purchase Plan (the “2015 ESPP”) which replaced the Company’s legacy 1998 ESPP. Under the 2015 ESPP, the Company reserved 15,000 shares of common stock for issuance as of its effective date of July 1, 2015, subject to adjustment in the event of a stock split, stock dividend, combination or reclassification or similar event. The 2015 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. The 2015 ESPP provides for six-month offering periods ending on May 31 and November 30 of each year, with the exception of the first offering period, which ran from July 1, 2015 through November 30, 2015, as the Company transitioned from the 1998 ESPP. At the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last day of the offering period. In February 2017, the Compensation Committee and the Board of Directors adopted, and in May 2017, the Company’s stockholders approved, an amendment to the Company’s 2015 ESPP. The amendment (a) increased by 250,000 the shares of common stock (from 15,000 shares to a total of 265,000 shares) available for issuance under the 2015 ESPP; and (b) increased the maximum number of shares of common stock an employee may purchase in any offering period to 2,500. During the years ended December 31, 2018 and 2017, employees purchased 2,948 and 5,314 shares of common stock, respectively, under the 2015 ESPP. Deferred Savings Plan Under section 401(k) of the Internal Revenue Code of 1986, the Board of Directors adopted, effective June 1, 1987, a tax-qualified deferred compensation plan for employees of the Company. Participants may make contributions which defer up to 50% of their eligible compensation per payroll period, up to a maximum for 2018 of $18,500 (or $24,500 for employees over 50 years of age) and for 2017 of $18,000 (or $24,000 for employees over 50 years of age). The Company may, at its sole discretion, make contributions each plan year, in cash or in shares of the Company’s common stock, in amounts which match up to 50% of the salary deferred by the participants. The expense related to these contributions was $0.1 million for the year ended December 31, 2018, and 100% was paid in common stock for the year. The Company applies shares from plan forfeitures of terminated employees toward the Company’s matching contribution. For the year ended December 31, 2017, the forfeitures exceeded the total matching contribution from the Company. Therefore, no expense was recognized by the Company. Stock Option Plans In May 2010, the Compensation Committee and the full Board adopted, and in July 2010 the Company’s stockholders approved, a new equity-based compensation plan, the 2010 Long Term Incentive and Share Award Plan, which has since been amended and restated as the Amended and Restated 2010 Long Term Incentive and Stock Award Plan (the “2010 Plan”). The 2010 Plan replaced the Company’s legacy Option Plan, Restricted Plan and 1992 Directors Share Option Plan (the “Directors Plan”) and provided a more current set of terms under which to provide this type of compensation. In February 2016, the Compensation Committee and the Board of Directors adopted, and in May 2016, the Company’s stock holders approved an amendment to the 2010 Plan to, among other things, allow for an increase in the number of shares of common stock reserved for issuance by 170,000 shares to an aggregate of 1,108,560 shares. In February 2017, the Compensation Committee and the Board of Directors adopted, and in May 2017, the Company’s stockholders approved, an amendment to the 2010 Plan. The amendment (a) increases the number of shares of common stock issuable over the term of the plan by an additional 1,470,502 to 2,579,062 shares in the aggregate; (b) increases the number of shares of common stock issuable under the plan as incentive stock options by an additional 2,004,087 to 2,579,062 shares; (c) increases the per person award limits for purposes of compliance with Section 162(m) of the Internal Revenue Code to 2,000,000 shares for options and stock appreciation rights and to 2,000,000 shares for other types of stock awards; and (d) for purposes of Section 162(m) (i) confirms existing performance criteria upon which performance goals may be based with respect to performance awards under the 2010 Plan, and (ii) confirms existing means of adjustment when calculating the attainment of performance goals for performance awards granted under the 2010 Plan. From the 2010 Plan, the Company grants stock options, RSUs, and other stock-based awards to eligible employees, consultants and directors. No further grants or awards will be made under the Option Plan, the Restricted Share Plan or the Directors Plan. Shares underlying options previously issued under the Option Plan, the Restricted Share Plan or the Directors Plan that are currently outstanding will, upon forfeiture, cancellation, surrender or other termination, become available under the 2010 Plan. Stock-based awards granted under the 2010 Plan may be exercised when vested and generally expire ten years from the date of the grant or three to six months from the date of termination of employment (longer in case of death or certain retirements). As of December 31, 2018, the Company had 341,540 shares available for grant under the stock option plan. As of December 31, 2018, options and RSUs covering 1,627,591 shares of common stock were outstanding under the stock option plan. Stock Options Stock options generally vest monthly over three to four years for employees and one year for directors. Stock options held by employees who qualify for retirement age (defined as employees that are a minimum of 55 years of age and the sum of their age plus years of full-time employment with the Company exceeds 70 years) vest on the earlier of scheduled vest date or the date of retirement. Performance-Based Stock Options In February 2017, the Board of Directors approved a grant of 1,018,000 stock options to members of the Board of Directors, executives, and non-executive employees, subject to approval by the Company’s stockholders of an increase in the available shares under the 2010 Plan at the 2017 Annual Meeting of Stockholders. In May 2017, the shareholders approved the increase in the number of shares available for issuance under the Company’s 2010 Plan and 998,000 stock options were issued upon approval. As such, the stock options approved for grant in February 2017 were not deemed granted for accounting purposes until May 2017. The stock options granted to the non-employee board members and non-executive employees vest monthly over three years from the grant date. The stock options granted to the executives contain a combination of time-based and corporate performance-based vesting conditions. Stock-based compensation expense associated with the corporate performance-based stock options is recognized if the performance condition is considered probable of achievement using management’s best estimates. For the year ended December 31, 2018, certain corporate-based milestones were achieved for 41,250 shares and therefore the related expense of $0.2 million was recognized during the year. As of December 31, 2018, the Company had 41,250 shares remaining related to outstanding performance-based stock options with a grant date fair value of $0.2 million. The options are subject to vesting in 2019 based solely on the achievement of fiscal year 2019 corporate goals as set by the Compensation Committee of the Company’s Board of Directors. In December 2017, the Company granted 130,000 stock options to executives with corporate performance-based vesting conditions. During the three months ended March 31, 2018, the Board of Directors approved a modification of 80,000 of these options from performance-based vesting to service-based vesting. The remaining 50,000 stock options were cancelled in conjunction with an executive’s resignation. Stock Option Plans Summary The following table summarizes the Company’s stock option activity for the year ended December 31, 2018:
| Number of shares |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Contractual Term (in years) |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at beginning of year |  | 1,622,065 |  |  | $ | 24.54 |  |  |  |  |  |  |  |  |
Granted |  | 305,708 |  |  |  | 27.09 |  |  |  |  |  |  |  |  |
Exercised |  | (68,093 | ) |  |  | 5.39 |  |  |  |  |  |  |  |  |
Forfeited, expired or cancelled |  | (234,934 | ) |  |  | 43.46 |  |  |  |  |  |  |  |  |
Outstanding at end of period |  | 1,624,746 |  |  | $ | 23.09 |  |  |  | 7.5 |  |  | $ | 8,104 |
Exercisable at end of period |  | 1,102,036 |  |  | $ | 26.01 |  |  |  | 7.0 |  |  | $ | 6,089 |
The aggregate intrinsic value of stock options exercised in 2018 and 2017 was $1.1 million and $2.4 million, respectively. The weighted-average grant-date fair value per share of the options granted in 2018 and 2017 was $18.25 and $10.26, respectively. As of December 31, 2018, $5.0 million of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted average period of 1.8 years. Restricted Stock Units RSUs generally vest over three years for employees and one year for directors. RSUs held by employees who qualify for retirement age (defined as employees that are a minimum of 55 years of age and the sum of their age plus years of full-time employment with the Company exceeds 70 years) vest on the earlier of scheduled vest date or the date of retirement. The valuation of RSUs is determined at the date of grant using the closing stock price. Unvested RSU activity for the year ended December 31, 2018 is summarized below:
|  |  |  |  | Weighted- |  |
Restricted Stock Units: | Number of |  |  | Average Grant- |  |
| Shares |  |  | Date Fair Value |  |
Unvested balance at January 1, 2018 |  | 18,480 |  |  | $ | 18.00 |  |
Vested |  | (18,047 | ) |  |  | 18.27 |  |
Unvested balance at December 31, 2018 |  | 433 |  |  | $ | 7.01 |  |
The total grant-date fair value of RSUs that vested in 2018 and 2017, was $0.3 million and $2.3 million, respectively. As of December 31, 2018, $2,400 of total unrecognized compensation expense related to employee RSUs was expected to be recognized over a weighted average period of 0.8 years. Stock-based Compensation Expense The fair value of stock options granted during the years ended December 31, 2018 and 2017, was estimated based on the following weighted average assumptions for:
| Year Ended December 31, |  |
| 2018 |  |  | 2017 |  |
Dividend yield |  | 0 | % |  |  | 0 | % |
Expected volatility |  | 101 | % |  |  | 100 | % |
Risk-free interest rate |  | 2.72 | % |  |  | 1.90 | % |
Expected term | 5.60 years |  |  | 5.55 years |  |
The following table shows total stock-based compensation expense for stock options, RSUs and ESPP in the consolidated statements of operations and comprehensive (loss) income (in thousands):
| Year Ended December 31, |
| 2018 |  |  | 2017 |
Research and development | $ | 369 |  |  | $ | 876 |
General and administrative |  | 3,533 |  |  |  | 6,425 |
Total stock-based compensation expense | $ | 3,902 |  |  | $ | 7,301 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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