The Company has six share-based payment plans for employees, directors and consultants. The share options granted under these plans will be settled in equity. Options granted under each of the six plans have a maximum life of 10 years.

In 2018, share options were granted under the following share-based payment plan:

Options granted under these plans will vest if the option holder remains under their respective contract of employment or contract of service for the agreed vesting period. The share options granted under these plans will vest equally over a period of four years, with the exception of options granted to a consultant, which vested immediately.

Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date.

In 2019, share options were granted under the following share-based payment plans:

Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date.

Options granted under these plans will vest if the option holder remains under their respective employment contract for the agreed vesting period. The share options granted under these plans will vest equally over a period of four years.

Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date.

In 2020, share options were granted under the following share-based payment plans:

Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date.

Options granted under this plan will vest if the option holder remains under their respective contract of employment or contract of service for the agreed vesting period. The share options granted under this plan will vest equally over a period of four years.

Upon vesting, each option allows the holder to purchase one ordinary share at a specified option price determined at grant date. Options granted as RSU-style options are automatically exercised on vesting.

If the Company determines, and at its discretion, an arrangement may be made under the 2020 Long-Term Incentive Plan to substitute the right to acquire shares with a cash alternative of equivalent value.

Share options and weighted average exercise prices are as follows for the reporting periods presented:

	Number of shares			Weighted average exercise price per share
				£
Outstanding at January 1, 2018		4,711,502			1.29
Granted		253,500			17.01
Forfeited		(143,438	)		12.74
Exercised¹		(415,312	)		0.50
Outstanding at December 31, 2018		4,406,252			1.90
Granted		1,202,150			10.82
Forfeited		(48,625	)		10.42
Lapsed		(8,750	)		3.90
Exercised²		(252,187	)		0.50
Outstanding at December 31, 2019		5,298,840			3.91
Granted		2,665,639			4.03
Forfeited		(192,750	)		10.89
Lapsed		(14,438	)		7.42
Exercised³		(32,500	)		0.45
Outstanding at December 31, 2020⁴		7,724,791			3.78
Vested and exercisable at December 31, 2020		4,176,281			2.07
Vested and exercisable at December 31, 2019		3,811,736			1.15
Vested and exercisable at December 31, 2018		3,847,305			0.68

1. The weighted average share price at the date of exercise of these options was £18.23
2. The weighted average share price at the date of exercise of these options was £7.65
3. The weighted average share price at the date of exercise of these options was £4.63
4. The exercise price of outstanding share options ranges from £0.04 to £18.05

The weighted average remaining contractual life of the share options outstanding as at December 31, 2020 is 5.77 years (2019: 4.63; 2018: 3.96).

The following principal assumptions were used in the valuation for the 2018 share options.

	Options granted on
	Apr 11, 2018			Apr 11, 2018			May 8, 2018			Aug 14, 2018
Vesting dates	Apr 11, 2019			Apr 11, 2018			May 8, 2019			Aug 14, 2019
	Apr 11, 2020						May 8, 2020			Aug 14, 2020
	Apr 11, 2021						May 8, 2021			Aug 14, 2021
	Apr 11, 2022						May 8, 2022			Aug 14, 2022
Volatility		64.48	%		60.06	%		65.80	%		68.14	%
Dividend yield		0	%		0	%		0	%		0	%
Risk-free investment rate		1.04	%		0.83	%		1.02	%		0.93	%
Fair value of option at grant date	£	8.97		£	17.35		£	8.63		£	9.65
Fair value of share at grant date	£	17.51		£	17.51		£	16.57		£	18.05
Exercise price at date of grant	£	17.51		£	0.16		£	16.57		£	18.05
Lapse date	Apr 11, 2028			Apr 11, 2028			May 8, 2028			Aug 14, 2028
Expected option life (years)		4.50			2.00			4.50			4.50
Number of options granted		71,500			7,500			62,000			112,500

The fair values of options granted were determined using the Black-Scholes model that takes into account factors specific to the share incentive plan such as the assumption that the options are exercised at a point in time being 2 years after vesting. This has been incorporated into the measurement by means of actuarial modelling. As NuCana plc was unlisted until October 2, 2017, it is not possible to derive historical volatility from the Company’s own share price. The underlying expected volatility was therefore determined by using the historical volatility of similar listed entities as a proxy. The volatility percentage applied to each tranche is the average of the historical volatility of companies comparable to NuCana plc. In the year ended December 31, 2018, an employee remuneration expense, all of which related to equity-settled share-based payments, of £1.8 million has been included in the statement of operations and credited to equity.

The following principal assumptions were used in the valuation for 2019 share options.

	Options granted on
	Mar 13, 2019			May 15, 2019			Sept 11, 2019
Vesting dates	Mar 13, 2020			May 15, 2020			Sept 11, 2020
	Mar 13, 2021			May 15, 2021			Sept 11, 2021
	Mar 13, 2022			May 15, 2022			Sept 11, 2022
	Mar 13, 2023			May 15, 2023			Sept 11, 2023
Volatility		69.05	%		69.08	%		70.14	%
Dividend yield		0	%		0	%		0	%
Risk-free investment rate		0.85	%		0.77	%		0.44	%
Fair value of option at grant date	£	5.46		£	6.07		£	4.22
Fair value of share at grant date	£	10.13		£	11.26		£	7.79
Exercise price at date of grant	£	10.13		£	11.26		£	7.79
Lapse date	Mar 13, 2029			May 15, 2029			Sept 11, 2029
Expected option life (years)		4.50			4.50			4.50
Number of options granted		120,750			967,400			114,000

The fair values of options granted were determined using the Black-Scholes model that takes into account factors specific to the share incentive plan such as the assumption that the options are exercised at a point in time being 2 years after vesting. This has been incorporated into the measurement by means of actuarial modelling. As NuCana plc was unlisted until October 2, 2017, it is not possible to derive historical volatility from the Company’s own share price. The underlying expected volatility was therefore determined by using the historical volatility of similar listed entities as a proxy. The volatility percentage applied to each tranche is the average of the historical volatility of companies comparable to NuCana plc. In the year ended December 31, 2019, an employee remuneration expense, all of which related to equity-settled share-based payments, of £3.2 million (2018: £1.8 million) has been included in the statement of operations and credited to equity.

The following principal assumptions were used in the valuation for 2020 share options.

	Options granted on
	June 10, 2020			Sept 9, 2020			Sept 9, 2020			Dec 9, 2020
Vesting dates	June 10, 2021			Sept 9, 2021			Sept 9, 2021			Dec 9, 2021
	June 10, 2022			Sept 9, 2022			Sept 9, 2022			Dec 9, 2022
	June 10, 2023			Sept 9, 2023			Sept 9, 2023			Dec 9, 2023
	June 10, 2024			Sept 9, 2024			Sept 9, 2024			Dec 9, 2024
Volatility		76.59	%		82.98	%		87.21	%		81.26	%
Dividend yield		0	%		0	%		0	%		0	%
Risk-free investment rate		0.003	%		(0.08	)%		(0.08	)%		(0.03	)%
Fair value of option at grant date	£	2.76		£	4.24		£	4.24		£	2.10
Fair value of share at grant date	£	4.78		£	4.28		£	4.28		£	3.48
Exercise price at date of grant	£	4.78		£	0.04		£	0.04		£	3.48
Lapse date	June 10, 2030			Sept 9, 2030			-			Dec 9, 2030
Expected option life (years)		4.50			3.50			2.50			4.50
Number of options granted		2,186,780			290,356			108,503			80,000

The fair values of options granted were determined using the Black-Scholes model that takes into account factors specific to the share incentive plan such as the assumption that the options are exercised at a point in time of up to 2 years after vesting. This has been incorporated into the measurement by means of actuarial modelling. As NuCana plc was unlisted until October 2, 2017, it is not possible to derive historical volatility from the Company’s ADSs prior to October 2017. For options with an estimated life of greater than three years, the underlying expected volatility was determined by using the historical volatility of similar listed entities as a proxy. The volatility percentage applied to each tranche is the average of the historical volatility of comparable companies to the Company. Options granted with an estimated life of three years or less, have been valued using the Company’s own historical volatility rates.

In the year ended December 31, 2020, an employee remuneration expense, all of which related to equity-settled share-based payments, of £4.3 million (2019: £3.2 million; 2018: £1.8 million) has been included in the statement of operations and credited to equity.