In July 2015, we adopted the 2015 Stock Plan, or the 2015 Plan. Under the 2015 Plan, 4,681,544 shares of our common stock were initially reserved for the issuance of stock options and restricted stock to employees, directors, and consultants under terms and provisions established by the Board of Directors, or the Board, and approved by our stockholders. As of June 30, 2019 and December 31, 2018, there were 4,625,878 and 4,364,963 shares available for future grant, respectively.

Under the terms of the 2015 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive stock options may not be less than 110% of fair market value, as determined by the Board. The terms of options granted under the 2015 Plan may not exceed ten years. All options issued to date have had a ten-year life. To date, options granted generally vest in three ways: 1) over four years at a rate of 25% upon the first anniversary of the issuance date and 1/48^th per month thereafter, 2) over two years at a rate of 1/24^th per month, or 3) over four years at a rate of 1/48^th per month. The 2015 Plan contains certain change of control provisions and the employment offer letters of certain employees provide for varied acceleration of vesting in the event of a change of control and/or termination without cause. It also contains a net exercise provision and allows for cashless exercise upon the class of shares subject to the option becoming publicly traded in an established securities market.

In August 2015, we adopted the 2015 ESPP, which commenced on January 1, 2018. Under the 2015 ESPP our employees may purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock at the beginning of the offering period or at the end of each applicable purchase period. The 2015 ESPP generally provides for offering periods of six months in duration with purchase periods ending on either May 15 or November 15. Contributions under the 2015 ESPP are limited to a maximum of 15% of an employee’s eligible compensation. ESPP purchases are settled with common stock from the ESPP’s previously authorized and available pool of shares. We issued 41,030 shares at a weighted average price of $25.28 per share during the year ended December 31, 2018. As of June 30, 2019, we had issued 59,722 shares under the ESPP at a weighted average price of $17.75 per share and 2,346,064 shares under the ESPP remain available for purchase.

Our 2013 Stock Plan, or the 2013 Plan, which was originally adopted during January 2013, was terminated upon consummation of our IPO in August 2015. As a terminated plan, no further options can be granted from the 2013 Plan, and no further shares are reserved for issuance under the 2013 Plan.

	Options Outstanding
	Number of Options			Weighted- Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Balance, December 31, 2018		7,133,113		$	20.08		7.6	$	27,413
Options granted		2,318,442			22.52
Options exercised and shares vested		(366,221	)		14.23
Options cancelled		(515,002	)		28.19
Balance, June 30, 2019		8,570,332			20.50		7.6	$	28,934
Options vested and expected to vest as of June 30, 2019		8,017,038			20.22		7.5	$	28,771
Options exercisable as of June 30, 2019		3,891,087		$	15.93		6.3	$	26,175

The aggregate intrinsic values of options outstanding, exercisable, and vested and expected to vest were calculated as the difference between the exercise price of the options and the market price for shares of our common stock as of June 30, 2019. The 2013 Plan provided for early exercise, therefore, all our outstanding stock options issued under that plan are exercisable.

	Shares			Weighted Average Grant Date Fair Value
Unvested Balance, December 31, 2018		309,847		$	33.37
Awarded		476,127			23.06
Released		(91,354	)		33.28
Forfeited		(54,791	)		29.72
Unvested Balance, June 30, 2019		639,829		$	26.02

RSUs are measured based on the fair market value of the underlying stock on the date of grant and recognized as expense on a straight-line basis over the employee’s requisite service period (generally the vesting period).

In connection with the expansion and extension of our long-term exclusive commercial supply agreement with GPC, we issued 300,000 shares of restricted common stock in January 2018. The restricted common stock vests in four tranches over a 3.5 year period and is measured based on the fair market value of the underlying stock as the shares vest. As of June 30, 2019, 75,000 shares had vested, and the remaining shares were restricted. As of June 30, 2019, total estimated unrecognized expense related to these restricted shares was $3.6 million based upon the fair market value of our common stock on December 31, 2018, which is expected to be recognized over the remaining vesting period of 2.03 years as general and administrative expense. Stock-based compensation expense recognized during the quarters and six months ended June 30, 2019 and 2018 related to these shares was as follows (in thousands):

In February 2019, we issued 52,000 RSUs with a grant date fair value of approximately $1.3 million, to certain key employees that include service and performance vesting conditions related to the achievement of certain regulatory approvals for AR101. Stock-based compensation expense will be recognized when we conclude that it is probable that the performance conditions will be achieved. We will reassess the probability of vesting at each reporting period and adjust stock-based compensation expense based on this probability assessment. As the vesting is contingent upon specific performance conditions, stock-based compensation expense related to the grant will not be recognized until the specified conditions are determined to be probable of achievement. As none of the performance criteria were met during the six months ended June 30, 2019, we have not recognized any stock-based compensation related to these RSUs.

The weighted-average assumptions used to estimate the fair value of stock options using the Black-Scholes option valuation model and the resulting weighted average fair value of stock options granted were as follows:

	Quarter Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Expected term (in years)		6.0			6.0			6.0			6.0
Expected volatility		62.2	%		68.3	%		63.2	%		68.4	%
Risk free interest rate		2.3	%		2.6	%		2.5	%		2.4	%
Dividend yield		—	%		—	%		—	%		—	%
Weighted average estimated fair value	$	11.93		$	19.10		$	13.38		$	20.51

The weighted-average assumptions used to estimate the fair value of ESPP using the Black-Scholes option valuation model were as follows:

	Quarter Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Expected term (in years)		0.5			0.5			0.5			0.9
Expected volatility		50.7	%		47.0	%		50.7	%		50.4	%
Risk free interest rate		2.4	%		2.1	%		2.4	%		1.8	%
Dividend yield		—	%		—	%		—	%		—	%
Weighted average estimated fair value	$	6.00		$	8.41		$	6.00		$	12.42

Stock-based compensation expense, net of estimated forfeitures, reflected in the condensed consolidated statements of comprehensive loss is as follows (in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Research and development	$	2,957	$	2,923	$	5,700	$	4,970
General and administrative		5,783		5,751		10,805		11,311
Total stock-based compensation expense	$	8,740	$	8,674	$	16,505	$	16,281

During the quarter and six months ended June 30, 2019, we recorded approximately $0.5 million and $1.0 million, respectively, of stock-based compensation expense related to the acceleration of certain former executives’ stock options. Such expense was approximately $0.9 million and $2.1 million for the quarter and six months ended June 30, 2018, respectively.

As of June 30, 2019, total unrecognized stock-based compensation expense and expected period over which such compensation will be recognized were as follows ($ in thousands):

	As of June 30, 2019
Stock-option
Unrecognized stock compensation expense	$	60,246
Weighted-average remaining vesting period (years)	2.8
RSU
Unrecognized stock compensation expense	$	11,753
Weighted-average remaining vesting period (years)	2.94
ESPP
Unrecognized stock compensation expense	$	237
Weighted-average remaining vesting period (years)		0.38