In January 2021, the Company’s board of directors adopted and the stockholders approved the 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan replaced the Company’s 2014 Plan. The 10,526,235 shares reserved for future issuance under the 2014 Plan were removed and added to the share reserve under the 2021 Plan. The 2021 Plan provided for the grant of incentive stock options, non-statutory stock options, restricted shares, restricted stock units (“RSU”), share appreciation rights, performance based awards and cash based awards to the Company’s employees, directors, and consultants.

In July 2021, the Company’s board of directors adopted and the stockholders approved the 2021 Incentive Plan (the “2021 Incentive Plan”), which includes an employee stock purchase plan as an addendum (the “ESPP Addendum”). The 2021 Incentive Plan replaced the 2021 Plan. The 2021 Incentive Plan provides for the grant of restricted shares, non-qualified stock options, incentive stock options, unrestricted shares, stock appreciation rights, restricted stock units and cash awards. Shares of common stock underlying awards that are forfeited or cancelled generally are returned to the pool of shares available for issuance under the 2021 Incentive Plan.

The ESPP Addendum authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. The purchase price for each share purchased during an offering period will be the lesser of 85% of the fair market value of the share on the purchase date or 85% of the fair market value of the share on the offering date. The offering dates and purchase dates for the ESPP Addendum are determined at the discretion of the Company’s board of directors. As of September 30, 2021, the Company had not yet launched its ESPP Addendum.

The number of shares of common stock that remain available for issuance under the 2021 Incentive Plan, including the ESPP Addendum, was 12,894,374 as of September 30, 2021.

The Company’s outstanding stock options generally expire 10 years from the date of grant and are exercisable when the options vest. Incentive stock options and non-statutory options generally vest over four years, the majority of which vest at a rate of 25% on the first anniversary of the grant date, with the remainder vesting ratably each month over the next three years. A summary of stock option activity is as follows:


	Outstanding Options
	Number of Options	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term	Intrinsic Value (in thousands)
Balance—December 31, 2020	70,675,318	$	0.84	7.8	$	647,218
Options granted	8,402,925	2.85
Options exercised	(8,966,272)	0.69
Options canceled	(3,098,349)	1.68
Balance—September 30, 2021	67,013,622	$	1.07	6.8	$	1,628,923
Options vested and exercisable September 30, 2021	41,932,824	$	0.75	5.7	$	1,032,660

Aggregate intrinsic value represents the difference between the exercise price of the options and the fair value of common shares. The aggregate intrinsic value of options exercised was approximately $152.8 million for the nine months ended September 30, 2021, and $3.4 million for the nine months ended September 30, 2020.

The total fair value of stock options granted during the nine months ended September 30, 2021 and 2020, was approximately $24.0 million and $16.1 million, respectively, which is recognized over the respective vesting periods. The total fair value of stock options vested during the nine months ended September 30, 2021 and 2020, was approximately $4.7 million and $3.1 million, respectively.

The Company estimates the fair value of the options utilizing the Black-Scholes option pricing model, which is dependent upon several variables, including expected option term, expected volatility of the Company’s share price over the expected term, expected risk-free interest rate over the expected option term, and expected dividend yield rate over the expected option term, and actual forfeiture rates. A summary of the assumptions the Company utilized to record compensation expense for stock options granted during the three and nine months ended September 30, 2021 and 2020, is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Weighted average volatility	—%		50.4%		41.9%		65.2%
Expected term (in years)	0.0		5.8		5.9		5.9
Risk-free interest rate	—%		1.6%		0.6%		0.9%
Expected dividends	$	—	$	—	$	—	$	—


	Restricted Stock Units
	Time-Based Shares	Performance-Based Shares	Total Shares	Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2020	—	—	—	$	—
Granted	27,500,001	16,024,411	43,524,412	19.41
Cancelled/Forfeited	(341,135)	—	(341,135)	22.79
Nonvested balance as of September 30, 2021	27,158,866	16,024,411	43,183,277	$	19.38

Time-based RSUs vest based on a performance condition and a service condition. The performance condition was satisfied upon the Closing of the Merger, and the service condition will be met generally over 4.0 years. The Company granted 13,834,748 shares of the time-based RSUs to the CEO that will vest in sixteen equal quarterly installments beginning on December 5, 2021, subject to continuous employment. The service condition for 25% of the Company’s non-CEO RSUs will be satisfied 375 days after the Closing. The remaining RSUs will be satisfied in equal quarterly installments thereafter, subject to continuous employment. The fair value of these time-based RSUs was measured using the fair

value of the Company’s common stock on the date of the grant, as based on the market price of Churchill’s stock adjusted for the expected exchange ratio at the time, and discounted for lack of marketability.

All performance-based RSUs are granted to the CEO. The CEO performance RSUs will vest subject to the performance and market conditions. The performance condition was satisfied upon the Closing. The market conditions will be satisfied and vest in five tranches based on the achievement of market capitalization goals applicable to each tranche over a six-month period subject to the CEO’s continuous employment through the applicable vesting date. Any CEO performance RSUs that have not vested within five years after the Closing will be forfeited. As of September 30, 2021, none of the market capitalization goals had been achieved. The fair value of these performance-based RSUs was measured on the grant date, March 27, 2021, using a Monte Carlo simulation model, with the following assumptions:

The Company recognizes compensation expense on a graded vesting schedule over the requisite vesting period for the time-based awards and over the derived service period for the CEO performance RSUs. Stock-based compensation expense is recognized when the relevant performance condition is considered probable of achievement for the performance-based award.

Total employee and nonemployee stock-based compensation expense for the three and nine months ended September 30, 2021 and 2020, is classified in the consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Research and development	$	59,196	$	679	$	85,899	$	2,072
Selling, general and administrative	177,760		597		280,301		1,185
Total	$	236,956	$	1,276	$	366,200	$	3,257

Total stock-based compensation expense for the three and nine months ended September 30, 2021 includes $235.6 million stock-based compensation expense related to the RSUs. The nine months ended September 30, 2021 also includes $123.6 million stock-based compensation expense related to the Series E convertible preferred stock issuances in March 2021 and April 2021. Refer to Note 6 “Contingent Forward Contracts” and Note 9 “Convertible Preferred Stock” for more information.

The unamortized share-based compensation related to awards that are not vested was $732.2 million as of September 30, 2021, and weighted average remaining amortization period as of September 30, 2021 was 2.7 years.