Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

Stock-Based Compensation
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation


We use broad-based stock plans to attract and retain highly qualified officers and employees and to help ensure that management’s interests are aligned with those of our shareholders. We have also granted equity-based awards to nonemployees and certain employees of Cellectis.

In December 2014, we adopted the Calyxt, Inc. Equity Incentive Plan (the 2014 Plan), which allows for the grant of stock options, and in June 2017, we adopted the 2017 Omnibus Plan (the 2017 Plan).

As of December 31, 2018, 1,074,273 shares were registered and available for grant under approved registration statements, while 2,696,680 shares were available for grant in the form of stock options, restricted stock, and restricted stock units under the 2017 Plan. Stock-based awards now outstanding also include some granted under the 2014 Plan, under which no further awards will be granted.


Stock Options

The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option pricing model were as follows:


          2018              2017              2016      

Estimated fair values of stock options granted

   $ 9.09      $ 2.42      $ 5.03  



Risk-free interest rate

     2.2% - 3.0%        1.3% - 2.4%        0.6%  

Expected volatility

     40.9% - 57.2%        27.4% - 45.1%        30.0%  

Expected term (in years)

     5.6 - 10 years        1.2 - 10 years        5.8 - 6.2 years  

We estimate the fair value of each option on the grant date or other measurement date if applicable using a Black-Scholes option-pricing model, which requires us to make predictive assumptions regarding future stock price volatility, employee exercise behavior and dividend yield. We estimate our future stock price volatility using the historical volatility of comparable public companies over the expected term of the option. Our expected term represents the period of time that options granted are expected to be outstanding determined using the simplified or lattice methods. The risk-free interest rate for periods during the expected term of the options is based on the U.S. Treasury zero-coupon yield curve in effect at the time of grant. We have not nor do we expect to pay dividends for the foreseeable future.

Options may be priced at 100 percent or more of the fair market value on the date of grant, and generally vest over six years after the date of grant. Options generally expire within 10 years after the date of grant.

Information on stock option activity follows:




Price Per



Price Per


Balance as of December 31, 2016

     -      $               -        1,930,600     $         4.45  


           2,120,347       13.29  


           (68,780     3.95  

Forfeited or expired

                       (98,735     1.23  

Balance as of December 31, 2017

     1,244,968      $ 5.20        3,883,432       9.16  


           554,243       16.69  


           (592,342     4.43  

Forfeited or expired

                       (643,446     12.52  

Balance as of December 31, 2018

     1,278,038      $ 7.45        3,201,887     $ 10.67  

Stock-based compensation expense related to stock option awards was $4.4 million in 2018, $11.7 million in 2017, and zero in 2016. The options granted under the plans were originally only exercisable upon a triggering event or initial public offering as defined by the plans. When we completed our IPO on July 25, 2017, we recognized compensation expense of $5.6 million. In December 2017, an employee’s stock options were modified in connection with the employee’s termination to provide for continued vesting through the end of 2018. We recognized incremental stock-based compensation expense of $0.7 million related to this modification.

The aggregate intrinsic value of options outstanding and exercisable at December 31, 2018, was $5.9 million and the weighted average remaining contractual term was 7.6 years as of that date.


Net cash proceeds from the exercise of stock options less shares used for minimum withholding taxes and the intrinsic value of options exercised were as follows:


     Year ended December 31,  
In Thousands        2018              2017              2016      

Net cash proceeds

   $ 2,622      $ 265      $  -  

Intrinsic value of options exercised

   $ 7,569      $ 1,347      $ -  

Restricted Stock Units

Units settled in stock subject to a restricted period may be granted to key employees under the 2017 Plan. Restricted stock units generally vest and become unrestricted over five years after the date of grant.

Information on restricted stock unit activity follows:


      Number of
Restricted Stock
Units Outstanding
Grant Date Fair

Unvested balance at December 31, 2017

     1,373,933     $ 8.00  


     315,825       16.76  


     (261,507     9.89  


     (376,837     10.72  

Unvested balance at December 31, 2018

     1,051,414     $ 10.15  


     Year ended December 31,  
          2018              2017              2016      

Weighted average price per unit

   $ 16.76      $ 8.00      $  -  

The total grant-date fair value of restricted stock unit awards that vested was $2.7 million in 2018 and $0.3 million in 2017.

As of December 31, 2018, unrecognized compensation expense related to non-vested stock options and restricted stock units was $9.9 million. This expense will be recognized over 50 months on average for stock options and over 47 months on average for restricted stock units, assuming no change in the remeasurement value of grants made to non-employees in this calculation.

We treat stock-based compensation awards granted to employees of the Cellectis as deemed dividends. We recorded deemed dividends of $2.3 million in 2018, $3.6 million in 2017, and zero in 2016.

Cellectis Equity Incentive Plan

Prior to 2018 Cellectis granted stock options to our employees. Compensation costs related to these grants have been recognized in the statements of operations with a corresponding credit to stockholders’ equity, representing the Cellectis’ capital contribution to us. The fair value of each stock option was estimated at the grant date using the Black-Scholes option pricing model and were valued at $17.16 per share for grants made in 2017. No grants were made under this plan in 2016.

We recognized stock-based compensation expense related to our Cellectis’ grants of $0.1 million in 2018, $0.4 million in 2017, and $0.9 million in 2016.