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10-Q - FORM 10-Q - ACHILLION PHARMACEUTICALS INCd230843d10q.htm
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v2.3.0.15
Stock Based Compensation
9 Months Ended
Sep. 30, 2011
Stock Based Compensation [Abstract] 
Stock Based Compensation

10. Stock Based Compensation

The Company's 2006 Stock Incentive Plan, or the 2006 Plan, is administered by the Company's Board of Directors and provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights and other stock based awards. The Company's officers, employees, consultants, advisors and directors are eligible to receive awards under the 2006 Plan; however, incentive stock options may only be granted to employees. Options granted are exercisable for a period determined by the Board of Directors, but in no event longer than ten years from the date of the grant. Options generally vest ratably over four years. There were 1,050 shares available to be granted under the 2006 Plan as of September 30, 2011.

A summary of the status of the Company's stock option activity for the nine months ended September 30, 2011 is presented in the table and narrative below:

 

     Options     Weighted
Average
Exercise
Price
 

Outstanding at January 1, 2011

     5,860      $ 3.67   

Granted

     125        7.26   

Exercised

     (296     1.73   

Cancelled/Forfeited

     (5     1.53   
  

 

 

   

 

 

 

Outstanding at September 30, 2011

     5,684      $ 3.85   
  

 

 

   

 

 

 

Options exercisable at September 30, 2011

     2,536      $ 4.75   
  

 

 

   

 

 

 

Weighted-average fair value of options granted during the period

     $ 5.33   

The Company utilizes the Black-Scholes option pricing model for determining the estimated fair value for stock based awards. The Black-Scholes model requires the use of assumptions which determine the fair value of the stock based awards. The assumptions used to value options granted are as follows:

 

     For the Nine Months Ended  
     September 30, 2011     September 30, 2010  

Expected term of option

     5.0 - 6.1 years        6.1 years   

Expected volatility

     87 – 88     86 -87

Risk free interest rate

     1.19 - 2.57     1.59% - 2.92

Expected dividend yield

     0     0

 

Total compensation expense recorded in the accompanying statements of operations associated with option grants made to employees was $615 and $513 for the three months ended September 30, 2011 and 2010, respectively. Total compensation expense recorded in the accompanying statements of operations associated with option grants made to employees was $1,828 and $1,426 for the nine months ended September 30, 2011 and 2010, respectively. The Company recorded no tax benefit related to these options since the Company currently maintains a full valuation allowance on its deferred tax assets.

As of September 30, 2011, the intrinsic value of the options outstanding was $9,078, of which $3,732 related to vested options and $5,346 related to unvested options. The intrinsic value of 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.

As of September 30, 2011, the total compensation cost related to unvested options not yet recognized in the financial statements is approximately $5,475, net of estimated forfeitures, and the weighted average period over which this amount is expected to be recognized is 1.6 years.