8. Stock Awards

2015 Stock Option and Incentive Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Stock Option and Incentive Plan (the 2015 Plan), which replaced the Company’s 2011 Stock Option and Grant Plan, as amended (the 2011 Plan). The 2015 Plan includes incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards and cash‑based awards. The Company initially reserved a total of 1,460,084 shares of common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will be cumulatively increased on January 1 of each calendar year by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2017, the number of shares reserved for issuance under the 2015 Plan was increased by 1,325,019 shares. In addition, the total number of shares reserved for issuance is subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization. At March 31, 2017, there were 2,138,101 shares available for future grant under the 2015 Plan.

Awards

Options and restricted stock awards granted by the Company generally vest ratably over four years, with a one‑year cliff for new employee awards, and are exercisable from the date of grant for a period of ten years.

A summary of the Company’s unvested restricted stock and related information follows:


		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested at December 31, 2016	2,125	$	1.25
Vested	(1,871)		1.22
Repurchased	—		—
Unvested at March 31, 2017	254		1.49

The total fair value of restricted stock that vested during the three months ended March 31, 2017 and 2016 was $0.1 million and $0.7 million, respectively.

A summary of the Company’s stock option activity and related information follows:


		Weighted-		Remaining	Aggregate
		Average		Contractual	Intrinsic
		Exercise		Life	Value(1)
	Shares	Price		(in Years)	(in thousands)
Outstanding at December 31, 2016	2,622,741	$	11.67	8.30	$	44,025
Granted	750,300		35.94
Exercised	(124,135)		7.87
Canceled	(11,863)		6.80
Outstanding at March 31, 2017	3,237,043	$	17.45	8.58	$	72,949
Exercisable at March 31, 2017	958,200	$	7.76	7.78	$	30,882
Vested and expected to vest at March 31, 2017	3,237,043	$	17.45	8.58	$	72,949

(1)

Intrinsic value represents the amount by which the fair market value as of March 31, 2017 of the underlying common stock exceeds the exercise price of the option.

The fair value of stock options is estimated on the grant date using the Black‑Scholes option‑pricing model based on the following weighted average assumptions:


	Three Months Ended

	March 31, 2017		March 31, 2016
Risk-free interest rate	2.11	%	1.59	%
Expected dividend yield	—	%	—	%
Expected term (years)	6.0		6.0
Expected stock price volatility	75.43	%	76.74	%

The weighted‑average grant date fair value of options granted in the three months ended March 31, 2017 and 2016 was $23.98 and $10.29 respectively. The total intrinsic value of options exercised in the three months ended March 31, 2017 and 2016 was $3.5 million and $0.4 million, respectively.

Total stock‑based compensation expense recognized for all stock‑based compensation awards in the condensed consolidated statements of operations and comprehensive loss is as follows (in thousands):


	Three Months Ended
	March 31,
	2017		2016
Research and development	$	1,124	$	526
General and administrative		1,116		576
Total stock-based compensation expense	$	2,240	$	1,102

At March 31, 2017, the Company had $31.4 million of total unrecognized compensation cost related to non-vested stock awards, which is expected to be recognized over a weighted‑average period of 2.73 years. Due to an operating loss, the Company does not record tax benefits associated with stock‑based compensation or option exercises. Tax benefit will be recorded when realized.

2015 Employee Stock Purchase Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which became effective upon the closing of the IPO in May 2015. The Company initially reserved a total of 243,347 shares of common stock for issuance under the 2015 ESPP. The 2015 ESPP provides that the number of shares reserved and available for issuance under the 2015 ESPP will be cumulatively increased on January 1 of each calendar year by 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2017, the number of shares reserved for issuance under the 2015 ESPP was increased by 331,254 shares. The Company issued no shares under the ESPP during the three months ended March 31, 2017.