Equity Incentive Plans, Employee Stock Purchase Plan and Stock-Based Compensation |
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Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plans, Employee Stock Purchase Plan and Stock-Based Compensation |
10. Equity Incentive Plans, Employee Stock Purchase Plan and Stock-Based Compensation 2004 Equity Incentive Plan and 2018 Equity Incentive Plan In September 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”), which became effective on September 25, 2018. As a result, the Company will not grant any additional awards under the 2004 Equity Incentive Plan (“2004 Plan”). The terms of the 2004 Plan and applicable award agreements will continue to govern any outstanding awards thereunder. In addition to the shares of common stock reserved for future issuance under the 2004 Plan that were added to the 2018 Plan upon its effective date, the Company initially reserved 2,300,000 shares of common stock for issuance under the 2018 Plan. In addition, the number of shares of common stock reserved for issuance under the 2018 Plan will automatically increase on the first day of January for a period of up to ten years, commencing on January 1, 2019, in an amount equal to 5% of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding year (rounded to the nearest whole share), or a lesser number of shares determined by the Company’s board of directors. As a result, common stock reserved for issuance under the 2018 Plan was increased by 2,287,605 shares on January 1, 2021. As of June 30, 2021, the Company had 1,555,985 shares available for grant under the 2018 Plan. The following table summarizes option activity under the Company’s 2004 Plan and 2018 Plan:
The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying stock option awards and the estimated fair value of the Company’s common stock on the date of exercise. For the three and six months ended June 30, 2021, the aggregate intrinsic value of stock options exercised was $0.3 million and $2.2 million, respectively, determined at the date of the option exercise. For the three and six months ended June 30, 2020, the aggregate intrinsic value of stock options exercised was $5,000 and $81,000, respectively, determined at the date of the option exercise. Employee Stock Options Valuation For determining stock-based compensation expense, the fair-value-based measurement of each employee stock option was estimated as of the date of grant using the Black-Scholes option-pricing model with assumptions as follows:
Using the Black-Scholes option-valuation model, the weighted-average estimated grant-date fair value of employee stock options granted during the three and six months ended June 30, 2021 was $12.84 and $14.71 per share, respectively, and during the three and six months ended June 30, 2020 was $5.60 and $5.03 per share, respectively. Restricted Stock Units During the six months ended June 30, 2021, the Company granted 1,511,750 shares of restricted common stock units (“RSUs”) to certain employees. These RSUs vest annually and will become fully vested over four years. A summary of the status and activity of non-vested RSUs during the six months ended June 30, 2021 is as follows:
2018 Employee Stock Purchase Plan In September 2018, the Company adopted the 2018 Employee Stock Purchase Plan (“ESPP”), which became effective on September 26, 2018, in order to enable eligible employees to purchase shares of the Company’s common stock. The Company initially reserved 230,000 shares of common stock for sale under the ESPP. The aggregate number of shares reserved for sale under the ESPP will automatically increase on the first day of January for a period of up to ten years, commencing on January 1, 2019, in an amount equal to 1% of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding year (rounded to the nearest whole share), or a lesser number of shares determined by the Company’s board of directors. As a result, common stock reserved for issuance under the ESPP was increased by 457,521 shares on January 1, 2021. The aggregate number of shares issued over the term of the Company’s ESPP, subject to stock-splits, recapitalizations or similar events, may not exceed 2,300,000 shares of the Company’s common stock. The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model. For the six months ended June 30, 2021 and 2020, the fair value of ESPP shares was estimated using the following assumptions:
As of June 30, 2021, 421,277 shares had been purchased and 725,714 shares were available for future issuance under the ESPP. Stock-Based Compensation Expense The Company believes that the fair value of the stock options, RSUs and ESPP shares is more reliably measurable than the fair value of services received. Total stock-based compensation expense recognized was as follows:
As of June 30, 2021, unrecognized stock-based compensation expense related to the unvested stock options and RSUs granted was $27.5 million and $32.5 million, respectively. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.6 years and 3.5 years, respectively. As of June 30, 2021, there is $0.1 million of unrecognized stock-based compensation expense related to the ESPP. As of June 30, 2020, unrecognized stock-based compensation expense related to the unvested stock options and RSUs granted was $20.1 million and $6.2 million, respectively. The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.6 years and 2.8 years, respectively. As of June 30, 2020, there is $0.1 million of unrecognized stock-based compensation expense related to the ESPP. Non-Employee Stock-Based Compensation Expense The fair value of options granted to non-employees was estimated using the Black-Scholes method. The stock-based compensation expense related to non-employees for the three and six months ended June 30, 2021 and 2020 was immaterial. Call Option Plan In February 2017, the Company adopted a Call Option Plan to grant selected employees, officers, directors and consultants (collectively, the “Participants”) options to purchase shares of the common stock of Vaxcyte. As of June 30, 2021, the Company has reserved 266,724 shares of Vaxcyte common stock for issuance under the program, under which call options covering 248,944 and 17,780 shares were granted in February 2017 and August 2019, respectively. The call options granted in February 2017 vested 25% on each of January 1, 2017, 2018, 2019, and 2020, and expire one year from the vesting date. The call options granted in August 2019 vest 25% on each of January 1, 2019, 2020, 2021, and 2022, and expire one year from the vesting date. A summary of the status of the call options as of June 30, 2021 and December 31, 2020 is as follows:
The amounts recognized as compensation expense related to the Call Option Plan for the three and six months ended June 30, 2021 were $26,000 and $46,000, respectively. The amounts recognized as compensation expense related to the Call Option Plan for the three and six months ended June 30, 2020 were $64,000 and $68,000, respectively. The amounts recognized as other expense or income related to the remeasurement of the vested call options for the three and six months ended June 30, 2021 were $12,000 of other expense and $18,000 of other income, respectively. The amounts recognized as other expense related to the remeasurement of the vested call options for the three and six months ended June 30, 2020 were $1.8 million and $2.0 million, respectively. As of June 30, 2021 and December 31, 2020, the liability attributable to the Call Option Plan was $137,000 and $109,000, respectively. |