Annual report pursuant to Section 13 and 15(d)

STOCK OPTION PLANS

v3.19.1
STOCK OPTION PLANS
 12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK OPTION PLANS
NOTE 11 — STOCK OPTION PLANS
Our
stock-based employee compensation plans are described below:
 
2015 Equity Incentive Plan
 
Under our 2015 Equity Incentive Plan, as amended, up to 10,000,000 shares of our authorized but unissued common stock are reserved for issuance to employees, consultants, or to non-employee members of the Board or to any member of the board of directors (or similar governing authority) of any affiliate of the Company. The 2015 Equity Incentive Plan, approved by our
stockholders
on May 7, 2015, replaced the previously approved stock option plan (the “2005 Equity Incentive Plan”). The maximum contractual term of awards is generally 10 years.
 
We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model. We then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:
 
•
Expected volatility — we estimate the volatility of our share price at the date of grant using a “look-back” period which coincided with the expected term, defined below. We believe using a “look-back” period which coincides with the expected term is the most appropriate measure for determining expected volatility.
 
 
•
Expected term — we estimate the expected term using the “simplified” method, as outlined in Staff Accounting Bulletin No. 107, “Share-Based Payment.”
 
•
Risk-free interest rate — we estimate the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.
 
 
•
Dividends — we use an expected dividend yield of zero because we have not declared or paid a cash dividend, nor do we have any plans to declare a dividend.
 
 
We used the following weighted-average assumptions to estimate the fair value of the options granted for the years indicated:
 
 
 
2018
 
2017
 
2016
Expected volatility
 
109%
 
111%
 
109%
Expected term
 
5 years
 
5 years
 
5 years
Risk-free interest rate
 
2.62%
 
1.81%
 
1.10%
Expected dividend yield
 
0.00
 
0.00%
 
0.00%
 
Summarized information for the 2015 Equity Incentive Plan is as follows:
 
 
Options
 
 
Weighted-
average
exercise
price
 
Outstanding options at January 1, 2016
 
 
1,994,000
 
 
$
6.90
 
Granted, fair value of  $2.59 per share
 
 
2,622,500
 
 
 
3.29
 
Exercised
 
 
(151,000
)
 
 
2.32
 
Expired/forfeited
 
 
(22,500
)
 
 
3.23
 
Outstanding options at December 31, 2016
 
 
4,443,000
 
 
$
4.94
 
Granted, fair value of  $11.35 per share
 
 
1,077,000
 
 
$
14.31
 
Exercised
 
 
(81,719
)
 
 
4.22
 
Expired/forfeited
 
 
(325,314
)
 
 
5.52
 
Outstanding options at December 31, 2017
 
 
5,112,967
 
 
$
9.07
 
Granted, fair value of  $10.23 per share
 
 
1,497,300
 
 
$
12.95
 
Exercised
 
 
(360,853
)
 
 
6.22
 
Expired/forfeited
 
 
(724,009
)
 
 
10.65
 
Outstanding options at December 31, 2018
 
 
5,525,405
 
 
$
8.08
 
Non-vested options at December 31, 2016
 
 
3,115,313
 
 
$
4.24
 
Non-vested options at December 31, 2017
 
 
2,641,832
 
 
 
8.21
 
Non-vested options at December 31, 2018
 
 
2,355,719
 
 
 
10.41
 
 
The intrinsic value related to the outstanding options under this plan was $8,398,000, $45,988,000 and $3,806,000 at December 31, 2018, 2017 and 2016, respectively. The intrinsic value related to the exercisable options under this plan was $6,026,000, $25,614,000 and $417,000 at December 31, 2018, 2017 and 2016, respectively.
 
The total intrinsic value of the options exercised was $3,182,000, $641,000 and $450,000 during 2018, 2017 and 2016, respectively.
 
Further information regarding options outstanding under the 2015 Equity Incentive Plan at December 31, 2018 is summarized below:
 
 
 
 
 
 
 
 
Number of
 
 
Weighted-average
 
 
Number of
 
 
Weighted-average
 
 
Range of exercise
prices
 
 
options
outstanding
 
 
Remaining
life in years
 
 
Exercise
price
 
 
options
exercisable
 
 
Remaining
life in years
 
 
Exercise
price
 
$
2.31
 
 
$
4.45
 
 
 
2,252,855
 
 
 
6.7
 
 
$
3.51
 
 
 
1,593,792
 
 
 
6.3
 
 
$
3.42
 
 
5.90
 
 
 
9.23
 
 
 
1,645,800
 
 
 
6.5
 
 
 
7.46
 
 
 
1,191,561
 
 
 
5.4
 
 
 
7.25
 
 
11.43
 
 
 
14.45
 
 
 
591,700
 
 
 
9.5
 
 
 
13.20
 
 
 
50,000
 
 
 
9.2
 
 
 
13.65
 
 
15.25
 
 
 
17.30
 
 
 
1,035,050
 
 
 
9.0
 
 
 
16.09
 
 
 
334,333
 
 
 
8.9
 
 
 
16.04
 
 
 
 
 
 
 
 
 
 
5,525,405
 
 
 
 
 
 
 
 
 
 
 
3,169,686
 
 
 
 
 
 
 
 
 
 
At December 31, 2018, the total compensation cost related to non-vested options not recognized is $17,261,000. The expected weighted average period over which the total compensation costs related to non-vested options is 2.1 years.
 
2005 Equity Incentive Plan
 
Under the 2005 Equity Incentive Plan, as amended, shares of our authorized but unissued common stock were reserved for issuance to employees, consultants, or to non-employee members of the Board or to any member of the board of directors (or similar governing authority) of any affiliate of the Company. As of January 20, 2015, no additional shares were available for grant under the 2005 Equity Incentive Plan. A total of 316,400 options were outstanding and exercisable under this plan at December 31, 2018.
 
Summarized information for the 2005 Equity Incentive Plan is as follows:
 
 
 
Options
 
 
Weighted-
average
exercise
price
 
Outstanding options at January 1, 2016
 
 
330,084
 
 
$
13.49
 
Expired/forfeited
 
 
(1,524
)
 
 
36.93
 
Outstanding options at December 31, 2016
 
 
328,560
 
 
$
14.57
 
Expired/forfeited
 
 
(11,800
)
 
 
21.53
 
Outstanding options at December 31, 2017
 
 
316,760
 
 
$
14.31
 
Expired/forfeited
 
 
(360
)
 
 
150.00
 
Outstanding options at December 31, 2018
 
 
316,400
 
 
$
14.15
 
 
The intrinsic value related to the outstanding or exercisable options under this plan was $466,000, $1,529,000 and $192,000 at December 31, 2018, 2017 and 2016, respectively.
 
Further information regarding options outstanding under the 2005 Equity Incentive Plan at December 31, 2018 is summarized below:
 
 
 
 
 
 
 
 
Number of
 
 
Weighted-average
 
 
Number of
 
 
Weighted-average
 
 
Range of exercise
prices
 
 
options
outstanding
 
 
Remaining
life in years
 
 
Exercise
price
 
 
options
exercisable
 
 
Remaining
life in years
 
 
Exercise
price
 
$
3.25
 
 
$
3.25
 
 
 
120,000
 
 
 
1.1
 
 
$
3.25
 
 
 
120,000
 
 
 
1.1
 
 
$
3.25
 
 
11.50
 
 
 
18.50
 
 
 
189,000
 
 
 
3.9
 
 
 
18.35
 
 
 
189,000
 
 
 
3.9
 
 
 
18.35
 
 
30.50
 
 
 
122.50
 
 
 
7,400
 
 
 
2.1
 
 
 
83.72
 
 
 
7,400
 
 
 
2.1
 
 
 
83.72
 
 
 
 
 
 
 
 
 
 
316,400
 
 
 
 
 
 
 
 
 
 
 
316,400