In January 2021, we adopted the Dynavax Technologies Corporation 2021 Inducement Award Plan (“2021 Inducement Plan”), pursuant to which we reserved 1,500,000 shares of common stock for issuance under the plan to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company. In June 2021, we amended the 2021 Inducement Plan (“Amended 2021 Inducement Plan”) to increase the number of shares of common stock reserved under the 2021 Inducement Plan to 3,250,000.

As of December 31, 2021, the 2018 Equity Incentive Plan, as amended, (“Amended 2018 EIP”), the Amended 2021 Inducement Plan and the Amended and Restated 2014 Employee Stock Purchase Plan are our active plans. Under the Amended 2018 EIP, the aggregate number of shares of our common stock that may be issued to employees and directors (subject to adjustment for certain changes in capitalization) is 22,517,869.

The Amended 2018 EIP is administered by our Board of Directors, or a designated committee of the Board of Directors, and awards granted under the Amended 2018 EIP have a term of 7 years unless earlier terminated by the Board of Directors. As of December 31, 2021, there were 4,851,391 shares of common stock reserved for issuance under the Amended 2018 EIP.

Activity under our stock plans is set forth below:


	Shares Underlying Outstanding Options (in thousands)			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2020		8,505		$	11.57
Options granted		3,894			10.49
Options exercised		(1,035	)		6.46
Options cancelled:
Options forfeited (unvested)		(521	)		8.13
Options expired (vested)		(444	)		18.48
Balance at December 31, 2021		10,399		$	11.55		4.16	$	42,756
Vested and expected to vest at December 31, 2021		10,029		$	11.57		4.08	$	41,321
Exercisable at December 31, 2021		5,796		$	13.07		2.64	$	20,488

The total intrinsic value of stock options exercised during the years ended December 31, 2021, 2020 and 2019 was $7.9 million, $0.1 million and $26,000, respectively. The total intrinsic value of exercised stock options is calculated based on the difference between the exercise price and the quoted market price of our common stock as of the close of the exercise date.

The total fair value of stock options vested during the years ended December 31, 2021, 2020 and 2019 was $9.0 million, $13.8 million and $19.5 million, respectively.

Our non-vested stock awards are comprised of restricted stock units granted with performance and time-based vesting criteria. A summary of the status of non-vested restricted stock units as of December 31, 2021, and activities during 2021 are summarized as follows:


	Number of Shares (In thousands)			Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2020		1,794		$	7.23
Granted		1,818			9.50
Vested		(537	)		8.85
Forfeited		(424	)		8.21
Non-vested as of December 31, 2021		2,651		$	8.30

Stock-based compensation expense related to restricted stock units was approximately $7.9 million for the year ended December 31, 2021. The aggregate intrinsic value of the restricted stock units outstanding as of December 31, 2021, based on our stock price on that date, was $37.3 million.

The total fair value of restricted stock units vested during the years ended December 31, 2021, 2020 and 2019 was $4.7 million, $4.9 million and $7.9 million, respectively.

We granted performance-based restricted stock unit (“PSU”) to certain executives in February 2021. These PSUs vest upon a specified market condition. The summary of PSU activities for the year ended December 31, 2021 is as follows:


	Number of Shares (in thousands)			Weighted-Average Grant-Date Fair Value Per Share
Non-vested as of December 31, 2020		-		$	-
Granted		297			8.40
Forfeited		(60	)		8.40
Non-vested as of December 31, 2021		237		$	8.40

Stock-based compensation expense related to PSUs was approximately $1.8 million for the year ended December 31, 2021. The aggregate intrinsic value of the PSUs outstanding as of December 31, 2021, based on our stock price on that date, was $3.3 million. None of the PSUs vested as of December 31, 2021.

Under our stock-based compensation plans, option awards generally vest over a three-year or four-year period contingent upon continuous service and unless exercised, expire seven or ten years from the date of grant (or earlier upon termination of continuous service).

The fair value of each option is estimated on the date of grant using the Black-Scholes option valuation model. The fair value of each RSU is determined at the date of grant using our closing stock price. The fair value of each PSU is estimated using the Monte Carlo simulation method on the date of grant. The weighted-average assumptions used in the calculations of these fair value measurements are as follows:


	Stock Options									Market-Based Performance Stock Unit (“PSUs”)		Employee Stock Purchase Plan
	Year Ended December 31,									Year Ended December 31,		Year Ended December 31,
	2021			2020			2019			2021		2021			2020			2019
Weighted-average fair value	$	7.17		$	3.91		$	4.58		$	8.40	$	6.48		$	2.82		$	2.72
Risk-free interest rate		0.7	%		1.0	%		2.1	%	From 0.03% to 1.92%			0.1	%		0.9	%		1.9	%
Expected life (in years)		4.5			4.5			4.5			2.9		1.2			1.2			1.2
Expected Volatility		0.9			0.9			0.9			0.9		1.0			0.7			0.7

Expected volatility is based on historical volatility of our stock price. The expected life of options granted is estimated based on historical option exercise and employee termination data. Our senior management, who hold a majority of the options outstanding, and other employees were grouped and considered separately for valuation purposes. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant. Forfeiture estimates are based on historical employee turnover. The dividend yield is zero percent for all years and is based on our history and expectation of dividend payouts.

Compensation expense is based on awards ultimately expected to vest and reflects estimated forfeitures. For equity awards with time-based vesting, the fair value is amortized to expense on a straight-line basis over the vesting periods. Stock-based compensation for the year ended December 31, 2020 included reversal of expenses related to cancellation of certain equity grants in the first quarter of 2020. Stock-based compensation cost for the year ended December 31, 2019 includes incremental cost of $4.1 million for accelerated vesting of stock awards and extension of exercise period of stock options in connection with the retirement of our Chief Executive Officer. See Note 17.

The Company has also granted performance-based equity awards to certain of our employees. For equity awards with performance-based vesting criteria, the fair value is amortized to expense when the achievement of the vesting criteria becomes probable. No stock-based compensation expense for awards with performance-based vesting criteria was recognized during the year ended December 31, 2021. We recognized stock-based compensation expense for awards with performance-based vesting criteria during the years ended December 31, 2020 and 2019 of $0.1 million and $0.5 million, respectively. As of December 31, 2021, approximately 117,000 shares underlying stock options and approximately 202,050 restricted stock unit awards with performance-based vesting criteria were outstanding. None of the awards with performance-based vesting criteria were deemed probable as of December 31, 2021.

We recognized the following amounts of stock-based compensation expense (in thousands):


	Year Ended December 31,
	2021		2020		2019
Employees and directors stock-based compensation expense	$	21,285	$	13,484	$	25,456

	Year Ended December 31,
	2021		2020		2019
Research and development	$	3,818	$	1,000	$	8,058
Selling, general and administrative		14,894		9,585		10,224
Cost of sales - product		553		619		1,088
Inventory		2,020		2,280		1,964
Restructuring		-		-		4,122
Total	$	21,285	$	13,484	$	25,456

As of December 31, 2021, the total unrecognized compensation cost related to non-vested stock options and awards deemed probable of vesting, including all stock options with time-based vesting, net of estimated forfeitures, amounted to $33.0 million, which is expected to be recognized over the remaining weighted-average vesting period of 2 years. As of December 31, 2021, the total unrecognized compensation cost related to equity awards with performance-based vesting criteria amounted to $1.0 million. As of December 31, 2021, the total unrecognized compensation cost related to PSUs amounted to $0.2 million.

The Amended and Restated 2014 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”) provides for the purchase of common stock by eligible employees. In May 2021, our stockholders approved the amendment and restatement of the Employee Stock Purchase Plan to increase the authorized number of shares of common stock by 1,000,000. The maximum number of shares of common stock that may be issued under the Employee Stock Purchase Plan will not exceed 1,850,000 shares of common stock.

The purchase price per share is the lesser of (i) 85% of the fair market value of the common stock on the commencement of the two-year offer period (generally, the sixteenth day in February or August) or (ii) 85% of the fair market value of the common stock on the exercise date, which is the last day of a purchase period (generally, the fifteenth day in February or August). For the year ended December 31, 2021, employees have acquired 217,270 shares of our common

stock under the Employee Stock Purchase Plan and 1,038,313 shares of our common stock remained available for future purchases under the Employee Stock Purchase Plan.

As of December 31, 2021, the total unrecognized compensation cost related to shares of our common stock under the Employee Stock Purchase Plan amounted to $1.1 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.5 years.