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Note 12 - Equity Incentive Plan | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 12. Equity Incentive Plan Equity Incentive Plan The Anika Therapeutics, Inc. Stock Option and Incentive Plan, as amended, (the “2003 Plan”) provides for grants of nonqualified and incentive stock options, common stock, RSA’s, RSU’s, and SAR’s to employees, directors, officers, and consultants. The 2003 Plan was originally approved by the Board of Directors on April 4, 2003, approved by the Company’s shareholders on June 4, 2003, and reserved 1,500,000 shares of common stock for grant pursuant to its terms. On May 29, 2009, the Board of Directors approved changes to the 2003 Plan and adopted the Amended and Restated 2003 Stock Option and Incentive Plan (the “Amended 2003 Plan”) to increase the number of shares available to grant by 850,000. The Amended 2003 Plan was approved by the Company’s shareholders on June 5, 2009, and it resulted in a total of 2,350,000 shares of common stock being reserved for issuance under the Amended 2003 Plan. At the 2011 Annual Meeting of Stockholders on June 7, 2011, the shareholders of the Company approved the Anika Therapeutics, Inc. Second Amended and Restated Stock Option and Incentive Plan (the “2003 Plan”), which, among other things, increased the number of shares reserved for issuance under the Company’s predecessor stock option and incentive plan by 800,000 to 3,150,000 shares. Pursuant to this amendment and restatement to the 2003 Plan approved by the Company’s shareholders, each share award issued after June 7, 2011 other than stock options or SAR’s will reduce the number of total shares available for grant by 1.9 shares. At the 2013 Annual Meeting of Stockholders on June 18, 2013, the shareholders of the Company approved an additional amendment to the Amended 2003 Plan, which, among other things, increased the number of shares reserved for issuance under the Company’s stock option and incentive plan by 650,000 to 3,800,000 shares. Pursuant to this amendment and restatement to the 2003 Plan approved by the Company’s shareholders, each share award issued after June 18, 2013 other than stock options or SAR’s will reduce the number of total shares available for grant by 1.5 shares. On June 13, 2017, the Company’s shareholders approved the Anika Therapeutics, Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”). The 2017 Plan replaced the 2003 Plan, as the plan under which future grants to employees, directors, officers, and consultants will be made. The 2017 Plan was originally approved by the Company’s Board of Directors on March 31, 2017. The terms of the 2017 Plan provide for the grant of incentive stock options, nonqualified stock options, SAR’s, RSA’s, RSU’s, and performance options that may be settled in cash, stock, or other property. In accordance with the 2017 Plan approved by the Company’s shareholders, each share award other than stock options or SAR’s will reduce the number of total shares available for grant by 2.0 shares. Subject to adjustment for specified types of changes in our capitalization, no more than 1.2 million shares of common stock may be issued under the 2017 Plan. There are 1.1 million shares available for future grant at December 31, 2017. The Company may satisfy the awards upon exercise, or upon fulfillment of the vesting requirements for other equity-based awards, with either newly-issued shares or shares reacquired by the Company. Stock-based awards are granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Awards contain service conditions or service and performance conditions, and they generally become exercisable ratably over one to four years. The Company estimates the fair value of stock options and SAR’s using the Black-Scholes valuation model. Fair value of restricted stock is measured by the grant-date price of the Company’s shares. Key input assumptions used to estimate the fair value of stock options and SAR’s include the exercise price of the award, the expected award term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the award’s expected term, and the Company’s expected annual dividend yield. The expected volatility assumption is evaluated against the historical volatility of the Company’s common stock over a four -year average, and it is adjusted if there are material changes in historical volatility. The risk-free interest rate assumption is based on U.S. Treasury interest rates at the time of grant. The fair value of each stock option during 2017, 2016, and 2015 was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:
|  | 2017 |  | 2016 |  | 2015
Risk free interest rate |  | 1.60% | - | 1.86% |  | 0.94% | - | 1.55% |  | 1.15% | - | 1.46%
Expected volatility |  | 38.74% | - | 44.31% |  | 47.33% | - | 51.61% |  | 53.15% | - | 54.65%
Expected life (years) |  |  | 4.0 |  |  |  | 4.5 |  |  |  | 4.5 |
Expected dividend yield |  |  | 0.00% |  |  |  | 0.00% |  |  |  | 0.00% |
Stock Options and Restricted Stock During the year ended December 31, 2017, a total of 85,109 stock options and 26,306 RSA’s were granted under the 2017 Plan, and a total of 407,635 stock options were granted under the 2003 Plan. The stock options granted to employees become exercisable or vest ratably over a three -year period. In January 2017, the Company executed its annual grant under the 2003 Plan of 9,970 RSU’s to non-employee directors; these RSU’s vest over a one -year period. The Company recorded $5.8 million, $3.4 million, and $2.2 million of stock-based compensation expense for the years ended December 31, 2017, 2016, and 2015, respectively, for stock options, SAR’s, RSA’s and RSU’s. The Company presents the expenses related to stock-based compensation awards in the same expense line items as cash compensation paid to each of its employees as follows:
|  | 2017 |  | 2016 |  | 2015
Cost of product revenue |  | $ | 439 |  |  | $ | 148 |  |  | $ | 42 |
Research & development |  |  | 564 |  |  |  | 467 |  |  |  | 269 |
Selling, general & administrative |  |  | 4,804 |  |  |  | 2,777 |  |  |  | 1,914 |
Total stock-based compensation expense |  | $ | 5,807 |  |  | $ | 3,392 |  |  | $ | 2,225 |
Combined stock options and SAR’s activity under the Company’s plans is summarized as follows for the years ended December 31, 2017 and 2016, respectively:
|  | 2017 |  | 2016
|  |  |  | Weighted |  |  |  | Weighted
|  |  |  | Average |  |  |  | Average
|  |  |  | Exercise |  |  |  | Exercise
|  | Number of |  | Price Per |  | Number of |  | Price Per
|  | Shares |  | Share |  | Shares |  | Share
Options and SAR's outstanding at beginning of year |  |  | 979,569 |  |  | $ | 26.15 |  |  |  | 762,260 |  |  | $ | 18.75 |
Granted |  |  | 440,688 |  |  | $ | 50.22 |  |  |  | 354,275 |  |  | $ | 40.77 |
Cancelled |  |  | (74,527 | ) |  | $ | 45.56 |  |  |  | (58,841 | ) |  | $ | 30.05 |
Expired |  |  | (589 | ) |  | $ | 32.86 |  |  |  | (3,310 | ) |  | $ | 11.37 |
Exercised |  |  | (17,941 | ) |  | $ | 20.56 |  |  |  | (74,815 | ) |  | $ | 15.46 |
Options and SAR's outstanding at end of year |  |  | 1,327,200 |  |  | $ | 33.70 |  |  |  | 979,569 |  |  | $ | 26.15 |
All the 1,327,200 stock options and SAR’s outstanding at December 31, 2017 are vested or are expected to vest, with a weighted-average exercise price of $33.70 as well as an aggregate intrinsic value of $27.6 million related to these awards. The weighted average remaining contractual term of the vested and expected to vest stock options and SAR’s was 7.0 years as of December 31, 2017. As of December 31, 2017, total unrecognized compensation costs related to non-vested stock options and SAR’s was approximately $7.6 million and is expected to be recognized over a weighted average period of 2.1 years. The exercisable options and SAR’s at December 31, 2017 are as follows:
|  | Outstanding |  | Weighted Average Exercise Price |  | Weighted Average Remaining Term (in years)
Incentive stock options |  |  | 182,472 |  |  | $ | 14.12 |  |  |  | 4.3 |
Nonqualified stock options |  |  | 374,211 |  |  | $ | 20.18 |  |  |  | 5.3 |
Performance options |  |  | 32,598 |  |  | $ | 38.79 |  |  |  | 7.7 |
SAR's |  |  | 35,250 |  |  | $ | 6.36 |  |  |  | 2.1 |
The aggregate intrinsic value of stock options and SAR’s fully vested at December 31, 2017 and 2016 was $22.0 million and $16.7 million, respectively. The aggregate intrinsic value of stock options and SAR’s outstanding at December 31, 2017 and 2016 was $27.6 million and $22.3 million, respectively. The total intrinsic value of stock options and SAR’s exercised was $0.5 million and $2.1 million for the years ended December 31, 2017 and 2016, respectively. The total fair value of stock options and SAR’s vested during the years ended December 31, 2017 and 2016 was approximately $2.1 and $1.3 million, respectively. The Company received $0.3 million and $1.0 million for exercises of stock options during the years ended December 31, 2017 and 2016, respectively. The RSA and RSU activity for the years ended December 31, 2017 and 2016 is as follows:
|  | 2017 |  | 2016
|  |  |  | Weighted |  |  |  | Weighted
|  |  |  | Average |  |  |  | Average
|  | Number of |  | Grant Date |  | Number of |  | Grant Date
|  | Shares |  | Fair Value |  | Shares |  | Fair Value
Unvested at Beginning of year |  |  | 207,077 |  |  | $ | 36.44 |  |  |  | 150,384 |  |  | $ | 34.29 |
Granted |  |  | 67,567 |  |  | $ | 52.03 |  |  |  | 87,158 |  |  | $ | 38.11 |
Cancelled |  |  | - |  |  | $ | - |  |  |  | (4,950 | ) |  | $ | 36.20 |
Expired |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
Vested/Released |  |  | (45,418 | ) |  | $ | 35.32 |  |  |  | (25,515 | ) |  | $ | 33.35 |
Unvested at end of year |  |  | 229,226 |  |  | $ | 42.47 |  |  |  | 207,077 |  |  | $ | 36.44 |
The total fair value of RSA’s and RSU’s vested during the years ended December 31, 2017 and 2016 was $2.3 million and $1.0 million.

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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 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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