STOCK INCENTIVE PLANS

2015 Equity Incentive Plan

In March 2015, the Company’s board of directors and stockholders approved and adopted the 2015 Equity Incentive Plan (“2015 EIP”). Under the 2015 EIP, the Company may grant stock options, stock appreciation rights, restricted stock, RSUs, and other awards to individuals who are employees, officers, directors, or consultants of the Company. The number of shares of stock available for issuance under the 2015 EIP will be automatically increased each January 1 by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31 or such lesser number as determined by the Company’s board of directors.

Terms of stock award agreements, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2015 EIP. Stock options granted by the Company generally vest over a three- or four-year period. Certain stock options are subject to acceleration of vesting in the event of certain change of control transactions. The stock options may be granted for a term of up to 10 years from the date of grant. The exercise price for stock options granted under the 2015 EIP must be at a price no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors, provided that for an incentive stock option granted to an employee who at the time of grant owns stock representing more than 10% of the voting power of all classes of stock of the Company, the exercise price shall be no less than 110% of the estimated value on the date of grant.

2015 Employee Stock Purchase Plan

In March 2015, the Company’s board of directors and stockholders approved and adopted the 2015 Employee Stock Purchase Plan ("ESPP"). The number of shares of stock available for issuance under the ESPP will be automatically increased each January 1 by the lesser of (i) 1% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31, (ii) 490,336 shares, or (iii) such lesser number as determined by the Company’s board of directors.

The ESPP allows substantially all employees to purchase the Company’s common stock through a payroll deduction at a price equal to 85% of the lower of the fair market value of the stock as of the beginning or the end of each purchase period. An employee’s payroll deductions under the ESPP are limited to 15% of the employee’s eligible compensation. During the three months ended March 31, 2018, no shares were issued pursuant to the ESPP.

Restricted Stock

The Company permits exercise of certain stock options prior to vesting. Any such exercised shares are restricted and subject to repurchase by the Company until the conditions for vesting are met. At March 31, 2018 and December 31, 2017, the liabilities for the cash received from the early exercise of stock options were $12,000 and $21,000, respectively, and were classified in accrued liabilities on the balance sheet. The Company reduces the liability as the underlying shares vest in accordance with the vesting terms outlined in the stock option agreements, which are generally 4 years. At March 31, 2018, 5,341 unvested shares were subject to repurchase by the Company.

Restricted Stock Units

The following table summarizes RSU and PRSU activity during the three months ended March 31, 2018:



	Number of RSUs and PRSUs
Outstanding at December 31, 2017	227,500
RSUs and PRSUs granted	30,000
RSUs and PRSUs vested	—
RSUs and PRSUs canceled	—
Outstanding at March 31, 2018	257,500

For the three months ended March 31, 2018, stock-based compensation expense related to RSUs and PRSUs was approximately $67,000. At March 31, 2018, estimated unrecognized compensation expense related to RSUs and PRSUs granted to employees was approximately $1.4 million.

Stock Options

The following table summarizes stock option activity during the three months ended March 31, 2018:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Total Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2017	3,099,173		$	7.74	8.10	$	2,264
Options granted	1,009,250		4.29
Options exercised	(12,147	)	2.29
Options canceled	(1,136	)	11.14
Outstanding at March 31, 2018	4,095,140		$	6.90	8.38	$	837
Vested and expected to vest at March 31, 2018	4,095,140		$	6.90	8.38	$	837
Exercisable at March 31, 2018	1,937,526		$	7.42	7.45	$	746

The intrinsic value of a stock option is the difference between the market price of the common stock at the measurement date and the exercise price of the option.

Stock-based compensation expense recognized for restricted shares, RSUs, PRSUs, stock options, and the ESPP has been reported in the statements of operations as follows (in thousands):



	Three Months Ended March 31,
	2018		2017
Research and development	$	640	$	432
General and administrative	821		619
Total	$	1,461	$	1,051

The weighted-average grant date fair value of employee stock options granted by the Company during the three months ended March 31, 2018 was $3.02 per share. The total grant date fair value of employee stock options that vested during the three months ended March 31, 2018 was $1.2 million. As of March 31, 2018, total unrecognized share-based compensation expense related to unvested employee stock options of the Company was approximately $8.4 million. This unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.3 years.

As of March 31, 2018, total unrecognized compensation expense related to the ESPP was approximately $0.4 million. This unrecognized compensation cost is expected to be recognized over approximately 0.9 years.