Stock-Based Compensation |
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Stock-Based Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Note 11. Stock-Based Compensation 2017 Equity Incentive Plan The Company’s 2017 Plan became effective in August 2017. Following the effective date of the Company's 2020 Plan, the Company ceased granting awards under the 2017 Plan, however, the terms and conditions of the 2017 Plan continue to govern any outstanding awards granted thereunder. 2020 Incentive Award Plan The Company’s 2020 Plan was approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020, and unless earlier terminated by the Board of Directors, will remain in effect until March 26, 2030. The 2020 Plan originally authorized for issuance the sum of (i) 911 shares of the Company’s common stock and (ii) 233 shares of the Company’s common stock, which represents the number of shares that remained available for issuance under the 2017 Plan immediately prior to the approval of the 2020 Plan by the Company’s stockholders. Any shares of common stock which, immediately prior to the approval of the 2020 Plan by the Company’s stockholders, were subject to awards granted under the 2017 Plan that are forfeited or lapse unexercised and are not issued under the 2017 Plan will increase the number of shares of common stock available for grant under the 2020 Plan. In addition, the number of shares available for issuance under the 2020 Plan will increase on the first day of each calendar year, beginning January 1, 2021 and ending on and including January 1, 2030, by a number of shares equal to the lesser of (A) 4% of the aggregate number of shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares of common stock as determined by the Board of Directors. The shares available for issuance under the 2020 Plan increased by 1,126 shares and 1,119 shares on January 1, 2023 and 2022, respectively. Stock-based awards granted under the 2020 Plan have a term of ten years. The vesting schedule of all awards granted under the 2020 Plan is determined by the Board of Directors, which is generally four years. As of June 30, 2023, there were 561 shares available to be granted under the 2020 Plan. Restricted stock units The table below summarizes activity relating to BTI RSUs.
During the six months ended June 30, 2023, the Company granted 133 time-based RSUs to certain employees. All of the RSUs vest over four years, with 25% vesting at the one-year anniversary of the grant date and the balance vesting ratably over the remaining 12 quarters of the vesting period. The average grant date fair value per share for the RSUs was $19.62. Unrecognized stock-based compensation expense related to these awards was approximately $2,419 as of June 30, 2023. During the six months ended June 30, 2022, the Company granted 122 (119, net of forfeitures) time-based RSUs to certain employees and consultants. The majority of RSUs granted to employees vest over four years, with 25% vesting at the one-year anniversary of the grant date and the balance vesting ratably over the remaining 12 quarters of the vesting period. There were 25 RSUs granted to employees in May 2022 which fully vested at the -year anniversaryof the grant date. RSUs granted to a third-party consultant vest 50% on each of the first and second anniversaries of the grant date. The average grant date fair value per share for the RSUs during 2022 was $13.97. Unrecognized stock-based compensation expense related to these awards was approximately $939 as of June 30, 2023. OnkosXcel profit sharing units The table below summarizes activity relating to profits interests (the “profit sharing units” or “PSUs”) associated with OnkosXcel.
The Company granted 1,340 individual (not in thousands) time-based PSUs related to OnkosXcel to certain employees and consultants of the Company in consideration for services provided to OnkosXcel. The PSUs represent indirect equity interests in OnkosXcel. All PSUs, other than those granted to certain executive employees of the Company, vest ratably over 48 months. PSUs granted to certain executive employees of the Company, vest ratably over 24 months. The fair values of PSUs granted during 2023 of $8 per unit were estimated at the date of grant using a Black-Scholes option pricing model and assumptions below.
Unrecognized stock-based compensation expense related to these awards was $3,833 at June 30, 2023. OnkosXcel restricted stock units The table below summarizes activity relating to restricted stock units associated with OnkosXcel (the “OnkosXcel RSUs”).
During the six months ended June 30, 2023, the Company granted 225 individual (not in thousands) OnkosXcel RSUs to certain employees. 125 of the OnkosXcel RSUs vest upon the earlier to occur of (a) 180 days after an initial public offering of OnkosXcel, or (b) a change in control of OnkosXcel. The remaining OnkosXcel RSUs vest over four years, with 25% vesting at the one-year anniversary of the grant date and the balance vesting ratably over the remaining 12 quarters of the vesting period. The weighted average grant date fair value per unit for the OnkosXcel RSUs was approximately $10. Unrecognized stock-based compensation expense related to these awards was approximately $1,648 as of June 30, 2023. Stock options A summary of the Company’s stock option activity for the six months ended June 30, 2023 is presented below.
As of June 30, 2023, the intrinsic value of options outstanding was $9,215. The intrinsic value for stock options is calculated based on the difference between the exercise prices of the underlying awards and the quoted stock price of the Company’s common stock as of the reporting date. The total intrinsic value of stock options exercised for the six months ended June 30, 2023 was $5,928. The total intrinsic value of stock options exercisable as of June 30, 2023 was $7,903. The weighted average grant date fair value per share of options granted during the six months ended June 30, 2023 was $15.74. The weighted average grant date fair value per share of options vested as of June 30, 2023 was $12.19. The weighted average remaining contractual life is 5.8 years for options exercisable as of June 30, 2023. The weighted average remaining contractual life was 7.2 years for options outstanding as of June 30, 2023. Stock-Based Compensation The fair value of BTI stock options granted during the six months ended June 30, 2023 and 2022 was estimated using the Black-Scholes pricing model with the following assumptions:
In 2023, the Company began using the historical volatility of its common stock to estimate volatility. Prior to 2023, volatility was estimated using a combination of the historical volatility of publicly traded peer companies and that of the Company’s common stock. The expected term of the awards is estimated based on the simplified method, which calculates the expected term based upon the midpoint of the life of the award and the vesting period. The Company uses the simplified method because it does not have sufficient option exercise data to provide a reasonable basis upon which to estimate the expected term. The expected dividend yield is zero percent as the Company has no history of paying dividends nor does management expect to pay dividends over the contractual terms of these options. The risk-free interest rates are determined by reference to the U.S. Treasury yield curve in effect at the time of grant, with maturities approximating the expected term of the stock options. The fair value of the underlying common stock is generally determined as the closing price of the Company’s common stock on The Nasdaq Capital Market on the grant date, with consideration of whether there is material nonpublic information that could impact that estimated fair value when it is released. The Company recognized stock-based compensation expense related to awards issued under the 2017 Plan and the 2020 Plan, as well as the OnkosXcel RSUs and PSUs, of $6,124 and $4,482 for the three months ended June 30, 2023 and 2022, respectively, and $11,001 and $8,307 for the six months ended June 30, 2023 and 2022, respectively, which were comprised as follows:
Unrecognized compensation expense related to unvested BTI stock option awards as of June 30, 2023, was $25,301 and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 1.7 years. 2020 Employee Stock Purchase Plan The Company’s 2020 Employee Stock Purchase Plan (the “ESPP”) was also approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020. The ESPP is designed to assist eligible employees of the Company with the opportunity to purchase the Company’s common stock at a discount through accumulated payroll deductions during successive offering periods. The aggregate number of shares that may be issued pursuant to rights granted under the ESPP is 100 shares of common stock. In addition, the number of shares available for issuance under the ESPP will increase on the first day of each calendar year, beginning on January 1, 2021 and ending on and including January 1, 2030, by a number of shares of common stock equal to the lesser of (a) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board of Directors. The number of shares that may be issued or transferred pursuant to rights granted under the component of the ESPP that is intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Internal Revenue Code (the “Section 423 Component”) shall not exceed 500 shares. The purchase price will be determined by the administrator of the ESPP and, for purposes of the Section 423 Component, shall not be less than 85% of the fair value of a share on the first trading day or on the last trading day of the applicable offering period, whichever is lower. The shares available for issuance under the ESPP increased by 281 shares and 280 shares on January 1, 2023 and 2022, respectively. To date, no shares have been sold under the ESPP. There were 905 shares available for issuance as of June 30, 2023. |