MNKD 2017 Annual Report

A summary of restricted stock unit activity for the year ended December 31, 2017 is presented below: Number of Shares Weighted Average Grant Date Fair Value per Share Outstanding at January 1, 2017 . . . . . . . . . . . . . . . . . . . . 737,966 $ 8.40 Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669,091 1.36 Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (192,361) 10.02 Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79,480) 5.89 Outstanding at December 31, 2017 . . . . . . . . . . . . . . . . . 1,135,216 $ 4.08 The total restricted stock units expected to vest as of December 31, 2017 was 939,240 with a weighted average grant date fair value of $4.28 per share. The total intrinsic value of restricted stock units expected to vest as of December 31, 2017 was $2.2 million. Intrinsic value of restricted stock units expected to vest is measured using the closing share price at December 31, 2017. Total intrinsic value of restricted stock units vested during the years ended December 31, 2017, 2016 and 2015 was $0.4 million, $0.6 million and $5.2 million, respectively. Intrinsic value of restricted stock units vested is measured using the closing share price on the day prior to the vest date. The total grant date fair value of restricted stock units vested during the years ended December 31, 2017, 2016 and 2015 was $1.9 million, $2.6 million and $5.5 million, respectively. As of December 31, 2017, there was $2.9 million and $3.2 million of unrecognized compensation expense related to options and restricted stock units with performance conditions, respectively, which is expected to be recognized over the weighted average vesting period of 2.3 years. The Company evaluates stock awards with performance conditions as to the probability that the performance conditions will be met and uses that information to estimate the date at which those performance conditions will be met in order to properly recognize stock-based compensation expense over the requisite service period. As of December 31, 2017 and 2016, the Company recognized $0.9 million and $0.3 million of compensation costs related to the performance-based stock options, respectively. As of December 31, 2017, there was $3.5 million of unrecognized compensation costs related to performance-based stock options subject to performance conditions. During the year ended December 31, 2015, there was $1.6 million of stock compensation expense related to certain executives who entered into severance agreements which resulted in a modification to the terms of their awards. The severance agreements generally allowed for the separated executives to continue to vest under their original award terms for a stated period of time without providing substantive services. There were no modifications in 2017 or 2016. 14. Commitments and Contingencies Guarantees and Indemnifications — In the ordinary course of its business, the Company makes certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that may enable it to recover a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal. The 114