In connection with our acquisition of Sequenta in January 2015, we assumed Sequenta’s Equity Incentive Plan (“2008 Plan”), including all outstanding options and shares available for future issuance under the 2008 Plan, which, prior to the completion of our initial public offering, were all exercisable for Series E-1 convertible preferred stock. Upon completion of our initial public offering in July 2019, the outstanding options were exercisable for common stock. No shares are available for future issuance under this plan and no equity awards are outstanding under this plan as of December 31, 2020.

We adopted an equity incentive plan in 2009 (“2009 Plan”) that provided for the issuance of incentive and nonqualified common stock options and other share-based awards for employees, directors and consultants. Under the 2009 Plan, the option exercise price for incentive and nonqualified stock options were not to be less than the fair market value of our common stock at the date of grant. Options granted under this plan expire no later than ten years from the grant date and vesting was established at the time of grant. Pursuant to the terms of the 2019 Plan, any shares subject to outstanding options originally granted under the 2009 Plan that terminate, expire or lapse for any reason without the delivery of shares to the holder thereof shall become available for issuance pursuant to awards granted under the 2019 Plan. While no shares are available for future issuance under the 2009 Plan, it continues to govern outstanding equity awards granted thereunder.

The 2019 Plan was approved by our shareholders on June 13, 2019 and, pursuant to the resolutions adopted by our board of directors, became effective immediately prior to the closing of our initial public offering. The 2019 Plan provides for the issuance of awards in the form of options and other share-based awards for employees, directors and consultants. Under the 2019 Plan, the option exercise price per share shall not be less than the fair market value of a share of stock on the grant date of the option, as defined by the 2019 Plan, unless explicitly qualified under the provisions of Section 409A or Section 424(a) of the Internal Revenue Code of 1986. Additionally, unless otherwise specified, options granted under this plan expire no later than ten years from the grant date and vesting is established at the time of grant. Except for certain option grants made to non-employee directors, stock options granted under the 2019 Plan generally vest over a four-year period, subject to continuous service through each applicable vesting date. As of December 31, 2020, we have authorized 22,109,217 shares of common stock for issuance under the 2019 Plan.

Changes in shares available for grant during the year ended December 31, 2020 were as follows:

	Shares Available for Grant
Shares available for grant at December 31, 2019		15,396,254
2019 Plan reserve increase on January 1, 2020		6,261,907
Options and restricted stock units granted		(3,291,701	)
Options forfeited, cancelled or expired		250,541
Shares available for grant at December 31, 2020		18,617,001

Stock option activity under the 2008 Plan, 2009 Plan and 2019 Plan during the year ended December 31, 2020 was as follows:

	Shares Subject to Outstanding Options			Weighted- Average Exercise Price per Share		Aggregate Intrinsic Value (in thousands)
Options outstanding at December 31, 2019		16,646,654		$	6.14	$	398,379
Options granted		3,241,701			33.36
Options forfeited or cancelled		(235,541	)		16.17
Options expired		(15,000	)		0.16
Options exercised		(5,204,254	)		4.14
Options outstanding at December 31, 2020		14,433,560		$	12.82	$	668,458
Options vested and exercisable at December 31, 2020		7,924,779		$	6.41	$	417,801

The weighted-average remaining contractual life for options outstanding as of December 31, 2020 was 7.1 years. The weighted-average remaining contractual life for vested and exercisable options outstanding as of December 31, 2020 was 5.9 years.

The weighted-average grant date fair value per share of options granted was $21.11, $6.87 and $4.15 during the year ended December 31, 2020, 2019 and 2018, respectively. The total intrinsic value of options exercised was $190.4 million, $39.1 million and $3.8 million during the year ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2020, $0.3 million was included in the prepaid expenses and other current assets line item on our balance sheet for unsettled cash proceeds related to options exercised during the year ended December 31, 2020. As of December 31, 2019, $0.5 million was included in the prepaid expenses and other current assets line item on our balance sheet for unsettled cash proceeds related to options exercised during the year ended December 31, 2019. The $21.7 million proceeds from exercise of stock options on our statements of cash flows for the year ended December 31, 2020 includes this $0.5 million, as the related proceeds settled during the year ended December 31, 2020.

Restricted stock unit activity under the 2019 Plan during the year ended December 31, 2020 was as follows:

	Restricted Stock Units Outstanding			Weighted- Average Grant Date Fair Value per Share
Nonvested outstanding restricted stock units at December 31, 2019		4,500		$	41.63
Restricted stock units granted		50,000			28.10
Restricted stock units vested		(4,500	)		41.63
Nonvested outstanding restricted stock units at December 31, 2020		50,000		$	28.10

The weighted-average grant date fair value per share of restricted stock units granted during the year ended December 31, 2019 was $41.63.

The estimated grant date fair value of options granted during the year ended December 31, 2020, 2019 and 2018 was estimated using the Black-Scholes option-pricing model with the following assumptions:

	Year Ended December 31,
	2020		2019		2018
Fair value of common stock	$17.68 - $55.23		$7.80 - $47.81		$6.55
Expected term (in years)	5.27 - 6.08		5.27 - 6.08		6.08 - 10.00
Risk-free interest rate	0.4% - 1.7%		1.4% - 2.5%		2.6% - 3.0%
Expected volatility	70.5% - 73.3%		64.3% - 72.9%		65.0% - 69.2%
Expected dividend yield		—		—		—

The weighted-average volatility used in the grant date fair value calculations of options granted during the year ended December 31, 2020, 2019 and 2018 was 71.4%, 68.1% and 68.1%, respectively.

The determination of the fair value of stock options on the date of grant using a Black-Scholes option-pricing model is affected by the estimated fair value of our common stock, as well as assumptions regarding a number of variables that are complex, subjective and generally require significant judgment to determine. The valuation assumptions were determined as follows:

Fair value of common stock—Prior to the closing of our initial public offering, the fair value of our common stock was determined with input from management using valuation methodologies which utilized certain assumptions, including probability weighting of events, volatility, time to liquidation, a risk-free interest rate and an assumption for a discount for lack of marketability (Level 3 inputs). In determining the fair value of our common stock, the methodologies used to estimate the enterprise value were performed using methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. For valuations of grants made after the closing of our initial public offering, the fair value of each share of common stock is based on the closing price of our common stock on the date of grant, or other relevant determination date, as reported on The Nasdaq Global Select Market.

Expected term—The expected term of options granted to employees and non-employee directors is determined using the “simplified” method, as illustrated in ASC Topic 718, Compensation—Stock Compensation, as we do not have sufficient exercise history to determine a better estimate of expected term. Under this approach, the expected term is based on the midpoint between the vesting date and the end of the contractual term of the option.

Risk-free interest rate—We utilize a risk-free interest rate in the option valuation model based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected terms of the options.

Expected volatility—As we do not have sufficient trading history for our common stock, the expected volatility is based on the historical volatility of our publicly traded industry peers utilizing a period of time consistent with our estimate of the expected term.

Expected dividend yield—We do not anticipate paying any cash dividends in the foreseeable future and, therefore, use an expected dividend yield of zero in the option valuation model.

The grant date fair value of restricted stock units granted after the closing of our initial public offering is based on the closing price of our common stock on the date of grant, or other relevant determination date, as reported on The Nasdaq Global Select Market.

Share-based compensation expense of $24.8 million, $13.1 million and $11.1 million was recognized during the year ended December 31, 2020, 2019 and 2018, respectively.

The compensation costs related to stock options and restricted stock units for the years ended December 31, 2020, 2019 and 2018 are included on our statements of operations as follows (in thousands):

	Year Ended December 31,
	2020		2019		2018
Cost of revenue	$	817	$	555	$	398
Research and development		8,519		3,934		2,896
Sales and marketing		6,627		3,480		2,891
General and administration		8,798		5,155		4,964
Total share-based compensation expense	$	24,761	$	13,124	$	11,149

During the year ended December 31, 2018, there was one employee option modification to extend the option exercise period, which resulted in incremental stock compensation of $0.5 million.

As of December 31, 2020, unrecognized share-based compensation expense related to unvested stock options was $74.9 million, which is expected to be recognized over a remaining weighted-average period of 3.0 years. Additionally, as of December 31, 2020, unrecognized share-based compensation expense related to nonvested restricted stock units was $1.1 million, which is expected to be recognized over a remaining weighted-average period of 3.3 years.