In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Employee Share Purchase Plan (“ESPP”). The maximum number of common shares that may be issued under the ESPP was initially 327,000. Additionally, the number of shares reserved and available for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2021 and each January 1 thereafter through January 31, 2030, by the lesser of (1) 1.0% of the total number of common shares outstanding on December 31 of the preceding calendar year, (2) 3,300,000 common shares, or (3) such smaller number of common shares as the Company’s board of directors may designate. As of January 1, 2023, the number of common shares that may be issued under the ESPP is 1,487,035.

The ESPP enables eligible employees to purchase common shares of the Company at the end of each offering period at a price equal to 85% of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower. Participation in the ESPP is voluntary. Eligible employees become participants in the ESPP by enrolling in the plan and authorizing payroll deductions. At the end of each offering period, accumulated payroll deductions are used to purchase the Company’s shares at the discounted price. The Company makes no contributions to the ESPP. A participant may withdraw from the ESPP or suspend contributions to the ESPP. If the participant elects to withdraw during an offering, all contributions are refunded as soon as administratively practicable. If a participant elects to withdraw or suspend contributions, they will not be able to re-enroll in the current offering but may elect to participate in future offerings. The ESPP purchases only whole shares of the Company’s shares. The Company’s first ESPP offering period began February 16, 2021 and ended on August 15, 2021, with a second offering period commencing on August 16, 2021. Subsequent offering periods will be on a rolling six-month basis.

For the years ended December 31, 2022 and 2021 the Company issued 37,915 and 9,943 common shares under the ESPP, respectively, at an average price per share of $11.43 and $28.46, respectively. Cash received from purchases under the ESPP for the years ended December 31, 2022 and 2021 was $0.4 million and $0.3 million, respectively. In February 2023, the Company issued 41,703 common shares under the ESPP at an average price per share of $9.80.

The assumptions that the Company used in the Black Scholes option-pricing model to determine the grant date fair value under the ESPP offering were as follows:


	Year Ended December 31,
	2022			2021
Risk-free interest rate		2.36	%		0.05	%
Expected term (in years)		0.50			0.50
Expected volatility		85.37	%		61.91	%
Expected dividend yield		0.00	%		0.00	%

The weighted average grant date fair value under the ESPP offering during the years ended December 31, 2022 and 2021 was $4.91 and $10.94, respectively.

In December 2016, as further amended in December 2017 and September 2019, the Company adopted the Repare Therapeutics Inc. Option Plan (the “Option Plan”) for the issuance of stock options and other share-based awards to directors, officers, employees or consultants. The Option Plan authorized up to 4,074,135 shares of the Company’s common shares to be issued.

In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan became effective on the effective date of the IPO, at which time the Company ceased making awards under the Option Plan. The 2020 Plan allows the Company’s compensation committee to make equity-based and cash-based incentive awards to the Company’s officers, employees, directors and consultants including but not limited to stock options and restricted share units. A total of 3,600,000 common shares were initially reserved for issuance under the 2020 Plan, plus the number of shares (not to exceed 3,807,448 shares) consisting of (i) 298,605 common shares that were available for issuance of awards under the Option Plan at the time the 2020 Plan became effective, which ceased to be available for future issuance under the Option Plan at such time and (ii) any shares subject to outstanding options or other share awards that were granted under the Option Plan that terminate or expire prior to exercise or settlement; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. In addition, the number of shares reserved and available for issuance under the 2020 Plan will automatically increase each January 1, beginning on January 1, 2021 and each January 1 thereafter through January 1, 2030, by 5% of the outstanding number of common shares on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s board of directors. As of January 1, 2023, the number of common shares reserved for issuance under the 2020 Plan is 10,025,525.

The 2020 Plan is administered by the board of directors. The exercise prices, vesting and other restrictions are determined by the board of directors, except that the exercise price per share of stock option may not be less than 100% of the fair value of the common share on the date of grant, determined based on the average of the daily volume-weighted average trading price of shares on each of the five trading days immediately preceding the date of grant.

Stock options awarded under the 2020 Plan expire 10 years after the grant and generally have vesting conditions of 25% on the first anniversary of the date of grant and 75% on a monthly basis at a rate of 1/36th unless otherwise decided by the Company’s board of directors.

The assumptions that the Company used in the Black Scholes option-pricing model to determine the grant date fair value of stock options granted to employees and non-employees were as follows, presented on a weighted-average basis:


	Year Ended December 31,
	2022			2021
Risk-free interest rate		2.17	%		0.80	%
Expected term (in years)		5.99			6.00
Expected volatility		78.95	%		75.99	%
Expected dividend yield		0.00	%		0.00	%

The weighted average grant date fair value of stock options granted during the years ended December 31, 2022, 2021 and 2020 was $9.54 and $22.49, respectively.

The following table summarizes the Company’s share option activity:


	Number of shares			Weighted average exercise price		Weighted average remaining contractual term (in years)		Intrinsic value (in thousands)
Outstanding, January 1, 2022		5,322,591		$	14.76		8.15	$	55,722
Granted		3,346,567		$	14.41
Exercised		(148,116	)	$	3.02
Forfeited		(488,140	)	$	22.15
Outstanding, December 31, 2022		8,032,902		$	14.38		7.90	$	37,250

Options exercisable, December 31, 2022		3,592,087		$	11.41		6.94	$	28,538
Options unvested, December 31, 2022		4,440,815		$	16.79		8.65	$	8,712

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common shares for those stock options that had an exercise price lower than the fair value of the Company’s common shares.

The aggregate intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was $1.7 million and $8.5 million, respectively.

The total fair value of options vested during the years ended December 31, 2022 and 2021 was $20.1 million and $7.4 million, respectively.

During the year ended December 31, 2022, an aggregate of 148,116 options were exercised at a weighted-average exercise price of $3.02 per share, for aggregate proceeds of $0.4 million. As a result, an amount of $0.3 million previously included in additional paid-in-capital related to the exercised options has been credited to common shares and deducted from additional paid-in-capital.

In January and February 2023, the Company granted an aggregate of 1,495,240 stock options at a weighted average exercise price of $12.42 per share and an aggregate of 626,260 restricted share units to employees under the 2020 Plan.

Share-based compensation expense for all awards was allocated as follows:


	Year Ended December 31,
	2022		2021
	(in thousands)
Research and development	$	10,020	$	5,681
General and administrative		9,671		7,148
Total share-based compensation expense	$	19,691	$	12,829

Share-based compensation expense by type of award was as follows:


	Year Ended December 31,
	2022		2021
	(in thousands)
Stock options	$	19,400	$	12,632
ESPP		291		197
Total share-based compensation expense	$	19,691	$	12,829

As of December 31, 2022, there was $42.9 million of unrecognized share-based compensation expense related to unvested stock options. The unrecognized share-based compensation expense is expected to be recognized over a weighted-average remaining vesting period of 1.8 years as of December 31, 2022.