In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Employee Share Purchase Plan (the “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 automatically increases 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 September 30, 2023, the total number of common shares that may be issued under the ESPP is 1,411,426.

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. ESPP offering periods occur on a rolling six-month basis.

The Company issued 75,608 common shares under the ESPP during the nine months ended September 30, 2023 at a weighted-average price per share of $9.11. Cash received from purchases under the ESPP for the nine months ended September 30, 2023 was $0.7 million.

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 share 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 granting awards under the Option Plan. The 2020 Plan allows the Company’s compensation committee to grant 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 the 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 September 30, 2023, the total number of common shares reserved for issuance under the 2020 Plan is 10,033,406.

In May 2023, the Compensation Committee of the Board of Directors approved the grant of an inducement award to a newly hired member of the senior leadership team. The equity award, which was granted outside of the 2020 Plan, was an inducement material to such executive entering into employment with the Company, in accordance with Nasdaq Listing Rule 5635(c)(4). The stock option award to purchase an aggregate of 240,000 of the Company’s common shares has a ten-year term and an exercise price of $9.83 per share. The award has terms and conditions consistent with those set forth under the 2020 Plan and vests under the similar vesting schedules as stock option awards granted under the 2020 Plan. The inducement grant is included in the stock options table below.

Total outstanding stock options as of September 30, 2023 was as follows:


	Number of shares			Weighted average exercise price
Outstanding at January 1, 2023		8,032,902		$	14.38
Granted		2,306,940		$	11.73
Exercised		(17,450	)	$	2.65
Cancelled or forfeited		(234,801	)	$	14.99
Outstanding at September 30, 2023		10,087,591		$	13.78

During the nine months ended September 30, 2023, an aggregate of 17,450 options were exercised at a weighted-average exercise price of $2.65 per share.

The fair value of stock options, and the assumptions 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:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

Fair value of stock options	$	7.77		$	8.45		$	8.31		$	9.40
Risk-free interest rate		4.36	%		2.89	%		3.71	%		2.09	%
Expected terms (in years)		6.08			6.08			6.01			5.98
Expected volatility		81.73	%		81.20	%		81.49	%		78.82	%
Expected dividend yield		0.00	%		0.00	%		0.00	%		0.00	%

Total outstanding restricted share units as of September 30, 2023 was as follows:


	Number of shares			Weighted average grant date fair value
Outstanding at January 1, 2023		—		$	-
Awarded		626,260		$	12.42
Forfeited		(21,300	)	$	12.42
Outstanding at September 30, 2023		604,960		$	12.42

The fair value of each restricted share unit is estimated on the date of grant based on the fair value of our common shares on that same date.

Share-based compensation expense was allocated as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in thousands)
Research and development	$	3,339	$	2,600	$	9,887	$	7,351
General and administrative		3,038		2,453		8,817		7,202
Total share-based compensation expense	$	6,377	$	5,053	$	18,704	$	14,553

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in thousands)
Stock options	$	5,678	$	4,969	$	16,776	$	14,376
Restricted share units		625		—		1,670		—
ESPP		74		84		258		177
Total share-based compensation expense	$	6,377	$	5,053	$	18,704	$	14,553

As of September 30, 2023, there was $43.0 million and $5.9 million of unrecognized share-based compensation expense to be recognized over a weighted average period of 1.6 years and 2.3 years related to unvested stock options and unvested restricted share units, respectively.