Stock-Based Compensation
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Sep. 30, 2013
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Stock-Based Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | (6) Stock-Based Compensation
The Company’s 2006 Stock Plan provides for the grant of incentive stock options, nonstatutory stock options and non-vested (“restricted”) stock to employees, officers, directors and consultants of the Company. In January 2013, the number of shares of common stock reserved for issuance under the 2006 Stock Plan was increased from 7,700,000 to 9,000,000 pursuant to an “evergreen” provision, which provides for an annual increase based on the lesser of 1,300,000 shares, 5% of the Company’s then outstanding shares of common stock, or such other amount as the board of directors may determine. This increase was approved by the board of directors in December 2012. The administration of the 2006 Stock Plan is under the general supervision of the compensation committee of the board of directors. The exercise price of the stock options is determined by the compensation committee of the board of directors, provided that incentive stock options are granted at not less than fair market value of the common stock on the date of grant and expire no later than ten years from the date the option is granted. Options generally vest over four years. As of September 30, 2013, the Company had options outstanding to purchase 6,736,209 shares of its common stock, which includes options outstanding under its 2001 Stock Plan that was terminated in March 2006, and had 42,500 restricted shares of common stock outstanding. As of September 30, 2013, 1,628,225 shares were available for future issuance.
The following table summarizes stock option activity during the nine months ended September 30, 2013:
The total cash received by the Company as a result of stock option exercises during the nine months ended September 30, 2013 and 2012 was $1.1 million and $0.9 million, respectively. In January 2013, a director of the Company exercised a total of 114,250 stock options that resulted in approximately $990,000 in cash proceeds to the Company. The weighted-average grant date fair values of options granted during the three months ended September 30, 2013 and 2012 were $4.21 and $6.00, respectively, and during the nine months ended September 30, 2013 and 2012 were $7.65 and $4.04, respectively.
Non-Vested (“Restricted”) Stock Awards With Service Conditions
The Company’s share-based compensation plan provides for awards of restricted shares of common stock to employees, officers, directors and consultants to the Company. Restricted stock awards are subject to forfeiture if employment or service terminates during the prescribed retention period. Restricted shares vest over the service period. The total fair value of restricted stock that vested during the nine months ended September 30, 2013 and 2012 was $0.2 million and $0.4 million, respectively.
The following table summarizes unvested restricted share activity during the nine months ended September 30, 2013:
Stock-Based Compensation Expense
For the three months and nine months ended September 30, 2013 and 2012, the fair value of each employee stock option award was estimated on the date of grant based on the fair value method using the Black-Scholes option pricing valuation model with the following weighted average assumptions:
Stock-based compensation expense during the three months and nine months ended September 30, 2013 and 2012 was as follows (in thousands):
Unrecognized stock-based compensation expense as of September 30, 2013 was as follows (dollars in thousands):
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