9.  Stock-Based Compensation

 

2011 Stock Incentive Plan

 

On April 28, 2011, the board of directors adopted the 2011 Stock Incentive Plan (the “2011 Plan”) reserving and authorizing up to 178,571 shares of common stock for stock‑based compensation awards to attract, retain and reward eligible employees, consultants, and non‑employee directors. The options have a contractual term of ten years. Generally, the options vest annually over three or four years, as determined by the board of directors, upon each option grant, although certain option grants in 2015 and 2014 were fully vested on the grant date. On January 10, 2012 and May 6, 2013, the board of directors and stockholders of the Company approved amendments to the 2011 Plan authorizing increases in the number of shares reserved for issuance under the plan of 107,143 and 418,714, respectively, resulting in an aggregate number of shares reserved for future issuance under the 2011 Plan of 704,428.  

 

2015 Omnibus Plan

 

On June 26, 2015, the board of directors adopted the 2015 Omnibus Plan (the “2015 Plan”), which was approved by the Company’s stockholders on August 31, 2015, reserving and authorizing up to 890,815 new shares of common stock for issuance. The 2015 Plan became effective on October 13, 2015.

 

As of the effective date of the 2015 Plan, no additional grants will be made under the 2011 Plan. Outstanding grants under the 2011 Plan will continue in effect according to their terms as in effect under the 2011 Plan. During the term of the 2015 Plan, the share reserve automatically increases on the first trading day in January of each calendar year, beginning in 2016, by an amount equal to 3% of the total number of outstanding shares of common stock on the last trading day in December of the prior calendar year. This share reserve increase provision resulted in an additional 259,504 shares added to the share reserve effective January 4, 2016. As of March 31, 2016, there were 464,476 shares remaining available for future issuance under the 2015 Plan.

 

The estimated grant date fair market value of the Company’s stock‑based awards is amortized ratably over the employees’ service periods, which is the period in which the awards vest. Stock‑based compensation expense (benefit) recognized for the three months ended March 31, 2016 and 2015 was as follows:

 

 

During the first quarter of 2016, the Company modified stock options of its former chief executive officer by extending the life of the awards, which were set to expire in March 2016, to coincide with their original life. This modification resulted in the recording of $781,266 of compensation expense, which is included in general and administrative expenses for the three months ended March 31, 2016 in the accompanying statement of operations.

 

A summary of option activity for the three months ended March 31, 2016 is as follows: