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Note 15 - Share-based Compensation
9 Months Ended
Sep. 30, 2021
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]

Note 15.  Share-Based Compensation

Equity Plans

The Company’s board of directors and stockholders approved the following equity plans:

 

the 2006 Share Incentive Plan

 

the 2013 Equity Incentive Plan (“2013 Plan”)

 

the 2021 Equity Incentive Plan (“2021 Plan”)

 

The Company issued stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) to employees, consultants and non-employee directors. Stock option awards generally vest over a four-year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options, RSAs and RSUs may be granted from these plans. Prior to the Company’s initial public offering in September 2013, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third-party valuation specialists.

Stock Options

Options have been granted to the Company’s employees under the two incentive plans and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and 12.5% on a semi-annual basis thereafter. All options expire ten years after the date of grant.

The following is a summary of option activity (in thousands, except per share data):

  

  

  

Weighted

  

  

Weighted

  

 

 

  

Weighted

  

Average

  

  

Average

  

 

 

  

Average

  

Share Price

  

Weighted

  

Remaining

  

Aggregate

 

 

Number of

  

Exercise

  

on Date of

  

Average

  

Contractual

  

Intrinsic

 

 

shares

  

Price

  

Exercise

  

Fair Value

  

Life

  

Value

 

 

(in thousands, except price data)

 

Outstanding at January 1, 2021

  276  $10.29     $5.41   2.67  $54 

Exercised

  (2) $6.00     $0.40      7 

Forfeited

  (4) $10.46      $5.64      1 

Outstanding, September 30, 2021

  270  $10.32  

   $5.44   1.94   6 

Exercisable, September 30, 2021

  270  $10.32  

   

    1.94   6 

Vested and expected to vest

  270  $10.33  

   

    1.94   6 

 

As of September 30, 2021, there was no unrecognized stock option expense.

Restricted Stock Units/Awards

The following is a summary of RSU/RSA activity (in thousands, except per share data):

  

  

Weighted

  

  

 

 

  

Average Share

  

Weighted

  

Aggregate

 

 

Number of

  

Price on Date

  

Average Fair

  

Intrinsic

 

 

shares

  

of Release

  

Value

  

Value

 

 

(in thousands, except price data)

 

Outstanding at January 1, 2021

  1,325    $14.97  $11,279 

Granted

  1,732     10.12   16,007 

Released

  (590) $8.59   15.87   5,069 

Cancelled/Forfeited

  (73) 

   13.05   527 

Outstanding, September 30, 2021

  2,394     11.30   17,189 

Vested and expected to vest

  2,394     11.30   17,189 

As of September 30, 2021, there was $24.5 million of unrecognized compensation expense related to these RSUs and RSAs. This expense is expected to be recognized over 2.65 years.

 

Performance Based Incentive Plan

 

In June 2021, the Company approved to grant performance stock units (“PSUs”) to senior executives as a part of our long-term equity compensation program. The number of shares of common stock that will ultimately be issued to settle PSUs granted ranges from 0% to 200% of the number granted and is determined based on certain performance criteria over a three-year measurement period. The performance criteria for the PSUs are based on a combination of the performance of our stock price and the Total Shareholder Return (“TSR”) for the performance period compared with the TSR of certain peer companies or index for the performance period. PSUs granted vest 100% on the third anniversary of their grant, assuming achievement of the applicable performance criteria. We estimated the fair value of the PSUs using a Monte Carlo simulation model on the date of grant. Compensation expense is recognized ratably over the explicit service period. 

 

Share-Based Compensation

Employee share-based compensation expenses recognized for the periods indicated (in thousands):

  

Three months ended

  

Nine months ended

 

 

September 30,

  

September 30,

 

 

2021

  

2020

  

2021

  

2020

 

Share-based compensation - by expense type

 

  

         

Cost of goods sold

 $222  $230  $689  $712 

Research and development

  489   706   1,682   2,098 

Sales and marketing

  272   298   820   884 

General and administrative

  2,146   2,031   5,731   6,110 

Total share-based compensation expense

 $3,129  $3,265  $8,922  $9,804