Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

Share-Based Compensation
3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-based Compensation Share-based Compensation
The Company's Equity Incentive Plan (the Plan) was adopted and approved in 2012 and re-approved in May 2014. The Plan was amended as to Section 2.2 by the shareholders of the Company in June 2016 and amended and restated in June 2020. The purpose of the Plan is to advance the interest of the Company by encouraging equity participation in the Company through the acquisition of common shares. As of March 31, 2021 and December 31, 2020, 128.1 million and 126.7 million, common shares were issued and outstanding, resulting in a maximum of 16.0 million and 15.8 million, respectively, options available for issuance under the Plan.

Stock Options

The Plan requires the exercise price of each option not to be less than the closing market price of the Company’s common shares on the day immediately prior to the date of grant. The board of directors approves the vesting criteria and periods at its discretion. The options issued under the plan are accounted for as equity-settled share-based payments.
The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted. The Company considers historical volatility of its common shares in estimating its future stock price volatility. The risk-free interest rate for the expected life of the options was based on the yield available on government benchmark bonds with an approximate equivalent remaining term at the time of the grant. The expected life is based upon the contractual term, taking into account expected employee exercise and expected post-vesting employment termination behavior. The following weighted average
assumptions were used to estimate the fair value of the options granted during the three-month periods ended March 31, 2021 and March 31, 2020:
March 31, 2021 March 31, 2020
Annualized volatility 66  % 43%
Risk-free interest rate 0.28  % 1.20%
Expected life of options in years 4.0 years 3.0 years
Estimated forfeiture rate 8.9  % 13.0%
Dividend rate 0.0  % 0.0%
Fair value per common share option $ 6.72  $ 5.44 

Performance Awards
On October 23, 2020, the Company issued 439,000 performance awards (PAs) to executive management of the Company whose vesting is contingent upon meeting specific performance metrics based on the results for the year ended December 31, 2021. Each performance award which vests entitles the participant to receive common shares on the basis of the performance metrics set. On March 18, 2021 performance metrics were set and formally communicated. Therefore, March 18, 2021 was the grant date and the fair value on the grant date was $13.56. The Company recorded approximately $0.2 million and $nil of share-based compensation expense related to executive performance awards during the three months ended March 31, 2021 and March 31, 2020, respectively.

The following table summarizes the equity award activity during the three months ended March 31, 2021:

March 31, 2021
Number of shares (in thousands) Weighted average exercise price $
Outstanding - Beginning of Period 14,486  11.35 
Granted 1,392  13.62 
Exercised (877) 5.65 
Forfeited (230) 12.33 
Outstanding - End of Period 14,771  12.94 
Vested and expected to vest - End of Period 897  13.11 
Options exercisable - End of Period 5,014  8.15 
Compensation Expense
The Company recognized share-based compensation expense for the three-month periods ended March 31, 2021 and March 31, 2020 as follows:
(in thousands) March 31, 2021 March 31, 2020
Research and development $ 1,074  $ 1,217 
Selling, general and administrative 6,641  2,279 
Capitalized under inventories 106  — 
Share-based compensation expense $ 7,821  $ 3,496 
At March 31, 2021, there was $36.6 million of unrecognized share-based compensation expense related to unvested awards granted which is expected to be recognized over a weighted-average period of approximately 1.3 years.