7. Stock Based Compensation

Our Board of Directors and the requisite stockholders previously approved the 2010 Equity Incentive Plan (the 2010 Plan). In October 2013, our Board of Directors approved the 2013 Equity Incentive Plan (the 2013 Plan) and in November 2013 our stockholders approved the 2013 Plan which became effective as of December 3, 2013. As of December 2, 2013, we suspended the 2010 Plan and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the 2010 Plan that terminate after December 2, 2013 by expiration, forfeiture, cancellation or other means without the issuance of such shares will be added to the 2013 Plan reserve.

As of September 30, 2018, the total number of shares of common stock available for issuance under the 2013 Plan is 9,618,155 which includes 2,684,456 shares of common stock that were available for issuance under the 2010 Plan as of the effective date of the 2013 Plan. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 of each year by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediate preceding year. Pursuant to approval by our board on January 1, 2018, the total number of shares of common stock available for issuance under the 2013 Plan was increased by 1,880,100 shares. As of September 30, 2018, a total of 6,624,750 options have been issued under the 2013 Plan.

In November 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (ESPP), which became effective as of December 5, 2013. We have reserved a total of 581,286 shares of common stock for issuance under the ESPP. Unless otherwise determined by our Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number of shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. Pursuant to approval by our board, there was no increase in the number of authorized shares in the ESPP in 2018. As of September 30, 2018, we have issued a total of 318,945 shares of common stock under the ESPP.

During the nine months ended September 30, 2018, the Company awarded 33,933 Restricted Stock Units (RSUs) to certain employees. Vesting of these awards will be in three equal annual installments and is contingent on continued employment terms. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period.

Total employee, director and non-employee stock-based compensation expense recognized for the three and nine months ended September 30, 2018 and 2017 are as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
General and administrative	$	2,732	$	1,422	$	6,037	$	4,305
Research and development		3,388		2,183		9,436		5,906
	$	6,120	$	3,605	$	15,473	$	10,211

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Stock options	$	5,832	$	3,462	$	14,723	$	9,820
ESPP		209		143		562		391
Restricted stock units		79		—		188		—
	$	6,120	$	3,605	$	15,473	$	10,211

The following table summarizes option activity under our stock plans and related information:


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining		Aggregate
	Shares subject	Price		Contractual		Intrinsic
	to outstanding	(Per		Term		Value
	options	Share)		(in years)		(in thousands)
Balances at December 31, 2017	5,093,442	$	15.32		7.62
Options granted	1,679,400	$	26.63
Options forfeited	(107,720)	$	21.66
Options exercised	(788,409)	$	8.96
Balance at September 30, 2018	5,876,713	$	19.29		7.70	$	115,992
Exercisable	2,857,873	$	14.76		6.56	$	69,180

We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $38.97 per share as of September 30, 2018.

Weighted average fair value of options granted during the nine-month period ended September 30, 2018 and 2017 was $17.57 and $16.91 per share, respectively. There were 1,438,100 options granted during the nine-month period ended September 30, 2017. We estimated the fair value of each stock option using the Black-Scholes option-pricing model based on the date of grant of such stock option with the following weighted average assumptions for the three and nine months ended September 30, 2018 and 2017:


	Options				Options
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Expected term (years)	6.1		6.1		6.1		6.1
Expected volatility	72.8	%	96.7	%	73.1	%	89.8	%
Risk-free interest rate	2.87	%	1.95	%	2.56	%	2.03	%
Expected dividend yield	—	%	—	%	—	%	—	%


	ESPP				ESPP
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Expected term (years)	0.5 - 2.0		0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Expected volatility	61.2 - 71.4	%	67.8 - 79.8	%	61.2 - 71.4	%	67.8 - 79.8	%
Risk-free interest rate	1.47 - 2.41	%	.47 - 1.09	%	1.47 - 2.41	%	.47 - 1.09	%
Expected dividend yield	—	%	—	%	—	%	—	%

As of September 30, 2018, the unamortized compensation expense related to unvested stock options was $44.5 million. The remaining unamortized compensation expense will be recognized over the next 2.8 years. As of September 30, 2018, the unamortized compensation expense under our ESPP was $1.0 million. The remaining unamortized expense will be recognized over the next 1.2 years.

The following table summarizes the restricted stock unit activity for the nine-month period ended September 30, 2018:


		Weighted
	Restricted	Average Grant
	Stock	Date Fair Value
	Units	(Per unit)

Unvested at December 31, 2017	—	$	—
Granted	33,933	$	27.64
Vested	—	$	—
Forfeited	—	$	—
Unvested at September 30, 2018	33,933	$	27.64

As of September 30, 2018, the unamortized compensation expense related to unvested restricted stock units was $0.75 million. The remaining unamortized expense will be recognized over the next 2.4 years.