Equity

Stock Incentive Plans

The Company has four share-based compensation plans which provide for the granting of equity awards, including qualified incentive and non-qualified stock options, stock appreciation awards and restricted stock awards to employees, directors, consultants and advisors: the MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan (the "2016 Plan"), which was approved by shareholders on May 18, 2016; the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan (the “Assumed 2006 Plan”); the MiMedx Inc. 2007 Assumed Stock Plan (the “Assumed 2007 Plan”); and the MiMedx Group Inc. Amended and Restated Assumed 2005 Stock Plan (the “Assumed 2005 Plan”). The awards are subject to a vesting schedule as set forth in each individual agreement. The Company currently intends to use only the 2016 Plan to make future grants.

Stock Options

Activity with respect to the stock options is summarized as follows:



	Number of Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at January 1, 2017	12,552,608		$	3.61
Granted	—		$	—
Exercised	(2,417,769	)	$	4.80
Unvested options forfeited	(25,839	)	$	6.54
Vested options expired	(68,991	)	$	5.79
Outstanding at September 30, 2017	10,040,009		$	3.30	4.60	$	86,178,050
Vested at September 30, 2017	9,976,636		$	3.26	4.59	$	86,042,771
Vested or expected to vest at September 30, 2017 (a)	10,043,166		$	3.30	4.60	$	86,176,954


(a)	Includes forfeiture-adjusted unvested shares.

The intrinsic value of the options exercised during the nine months ended September 30, 2017, was approximately $17,994,945.

Following is a summary of stock options outstanding and exercisable at September 30, 2017:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number outstanding	Weighted-Average Remaining Contractual Term (in years)	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$0.70 - $1.09	1,094,429	2.8	$	0.91	1,094,429	$	0.91
$1.10 - $1.65	4,290,379	3.7	1.30		4,290,379	1.30
$2.45 - $3.75	854,001	5.0	2.77		854,001	2.77
$4.19 - $6.38	1,989,205	5.7	5.36		1,989,205	5.36
$6.49 - $9.78	1,713,328	6.4	7.30		1,683,625	7.26
$9.90 - $10.99	98,667	7.2	10.38		64,997	10.38
	10,040,009	4.6	$	3.30	9,976,636	$	3.26

Total unrecognized compensation expense related to granted stock options at September 30, 2017, was approximately $98,900 and will be charged to expense ratably through January 2018.

The fair value of options granted by the Company is estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the options. The term of employee options granted is derived using the “simplified method,” which computes expected term as the mid point between the weighted average time to vesting and the contractual maturity. The simplified method was used due to the Company's lack of sufficient historical data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publicly traded. The term for non-employee options is generally based upon the contractual term of the option. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term or contractual term as described.

There were no options granted during the nine months ended September 30, 2017 and September 30, 2016.

Restricted Stock Awards

Activity with respect to restricted stock awards for the nine months ended September 30, 2017 is summarized as follows and includes 17,539 shares of common stock valued at approximately $166,000 which were issued under the 2016 Plan to a consultant in return for services performed:



	Number of Shares		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2017	3,828,445		$8.53
Granted	3,041,078		9.23
Vested	(1,457,449	)	8.42
Forfeited	(283,198	)	8.67
Unvested at September 30, 2017	5,128,876		8.97

As of September 30, 2017, there was approximately $32,910,620 of total unrecognized share-based compensation expense related to time-based, nonvested restricted stock. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 2.04 years, which approximates the remaining vesting period of these grants. All shares noted above as unvested are considered issued and outstanding at September 30, 2017.

For the three and nine months ended September 30, 2017 and 2016, the Company recognized share-based compensation expense as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Cost of sales	$	119	$	109	$	393	$	300
Research and development	148		159		425		520
Selling, general and administrative	5,039		4,433		14,414		13,006
	$	5,306	$	4,701	$	15,232	$	13,826

Treasury Stock

On May 12, 2014, our Board of Directors authorized the repurchase of up to $10 million of our common stock from time to time, through December 31, 2014. Our Board subsequently extended the program until December 31, 2017, and increased the total authorization to $120 million as of October 26, 2017. The timing and amount of repurchases will depend upon the Company's stock price, economic and market conditions, regulatory requirements and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchase program at any time.

For the nine months ended September 30, 2017, the Company repurchased 3,644,327 shares of its common stock for a purchase price of approximately $43,923,000 before brokerage commissions of approximately $109,000. As of September 30, 2017, the Company had approximately $13,000 of availability remaining under the repurchase program. In addition, the Company repurchased 358,861 shares surrendered by employees to satisfy tax withholding obligations upon vesting of restricted stock for the nine months ended September 30, 2017.

Additionally, for the nine months ended September 30, 2017, the Company reissued 2,684,270 shares from the treasury for restricted stock grants and stock option exercises, net of forfeitures, with an aggregate carrying value of approximately $24,801,000.