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S-1
VITAE PHARMACEUTICALS, INC filed this Form S-1 on 08/12/2014
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Vitae Pharmaceuticals, Inc.

Notes to the Financial Statements (Continued)

For the Years Ended December 31, 2013 and 2012

9. Employee Compensation Plans (Continued)

Stock Options

        All options granted under the Plans were granted with exercise prices (as determined by the Board) equal to or above the fair market value of the Company's common stock on the date of grant. Options granted under the Plans vest over a time period or based on performance milestones established at the sole discretion of the Board. Vesting for time-based options generally occurs over a period of not greater than four years. All stock options expire no later than ten years from the grant date. As of December 31, 2013, the Company has 2,664,883 and 3,072,608 options that will expire during the years ending December 31, 2014 and 2015, respectively, unless exercised. Under the terms of the Plans, employees may use shares to exercise a portion of these options. Shares tendered for this purpose are valued at the fair market value as of the date the options are exercised.

        The following table summarizes stock option activity under the Plans from January 1, 2012 through December 31, 2013:

 
  Number
of Shares
  Weighted-Average
Exercise Price
  Weighted-Average
Contractual
Life (in Years)
  Aggregate
Intrinsic
Value
 

Outstanding, January 1, 2012

    44,311,174   $ 0.1486         $  

Granted

    95,000   $ 0.2826              

Exercised

    (528,215 ) $ 0.1003           119,716  

Expired

      $              

Forfeited

      $              
                       

Outstanding, December 31, 2012

    43,877,959   $ 0.1494              

Granted

    20,000   $ 0.2150              

Exercised

    (985,242 ) $ 0.0768           112,583  

Cancelled

    (8,738,652 ) $ 0.0500              

Expired

    (4,035,784 ) $ 0.0844              

Forfeited

    (421,486 ) $ 0.2988              
                   

Outstanding, December 31, 2013

    29,716,795   $ 0.1878     4.24   $ 574,474  
                   
                   

Exercisable, December 31, 2013

    22,606,726   $ 0.1509     3.32   $ 572,616  
                   
                   

Vested and Expected to Vest, December 31, 2013

    28,824,187   $ 0.1842              
                       
                       

        Stock-based compensation expense includes stock options granted on or after January 1, 2006, based on the grant-date fair value in accordance with the provisions of ASC 718. Stock-based compensation expense reflects estimated forfeitures of awards.

        The weighted average fair value of options granted during the years ended December 31, 2013 and 2012 was $0.16 and $0.21 per share, respectively. The estimated fair value of the Company's stock-based awards, less estimated forfeitures, is amortized on a ratable basis over the awards' service periods.

        The Company granted 6,983,000 and 4,170,000 performance-based stock options to employees in March 2011 and July 2007, respectively. These performance options have a 10-year life and exercise prices equal to the fair value of the Company's stock at the grant date. Vesting of these performance options is dependent on (i) meeting certain performance conditions, which relate to the Company's research and

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