We have one active stockholder-approved stock-based compensation plan, the 2018 Long- Term Incentive Plan (the “2018 Plan”). In June 2018, the 2018 Plan replaced our former 2009 Incentive Award Plan (the “2009 Plan”). Under the 2018 Plan we may grant incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, performance awards, stock appreciation rights and other stock-based awards.

The stated maximum availability of common stock under the 2018 Plan is 9.5 million shares, except for additional availability provided on a one-for-one basis for awards formerly issued under the 2009 Plan that are terminated, forfeited, cancelled or expire unexercised. Awards issued under the 2018 Plan reduce share availability on a one-to-one basis for stock options and on a 1.5-to-one basis for restricted stock awards and restricted stock units. Accordingly, as of December 31, 2019, 5.9 million awards were available for grant under the 2018 Plan, assuming all were issued in the form of stock options, though would be reduced to 4.0 million awards available for grant if all were issued in the form of restricted stock.

It is our policy that before stock is issued through the exercise of stock options, we must first receive all required cash payment for such shares (whether through an upfront cash exercise or net-settlement exercise). At the time of vesting of restricted stock, by our policy, requisite shares are automatically sold on the open market by our designated broker to the extent required to cover the employee’s federal and state taxes due.

Stock-based awards are governed by agreements between us and the recipients. Incentive stock options (“ISOs”) and nonqualified stock options may be granted under the 2018 Plan at an exercise price of not less than 100% of the fair market value of our common stock on the respective date of grant and for certain recipients may not be less than 110% of such fair market value. The grant date is generally the date the terms of the award are approved by the Compensation Committee of our Board of Directors.

Stock-based awards generally vest at 25% to 33% on the first anniversary following the date of grant. Awards generally vest annually thereafter on a straight-line basis over three to four years. Stock options must generally be exercised, if at all, no later than 10 years from the date of grant. Upon termination of employment, vested stock options may generally be exercised based on the option termination rules including the following: six months after the date of termination upon retirement; 12 months after the date of termination upon disability or death; ninety days after the date of termination for all other separations (though whether vested or unvested, stock options of the employee recipient are immediately forfeited upon termination for “Cause” as defined in the 2018 Plan).

Under the terms of our 2009 Employee Stock Purchase Plan (the “ESPP”), eligible employees can purchase common stock through scheduled payroll deductions. The purchase price is equal to the closing price of our common stock on the first or last day of the offering period (whichever is less), minus a 15% discount. We use the Black-Scholes option-pricing model, in combination with the discounted employee price, in determining the value of ESPP expense to be recognized during each offering period. A participant may purchase a maximum of 50,000 shares of common stock during a six-month offering period, not to exceed $25,000 at full market value on the offering date during each plan year.

As of December 31, 2019, a total of 8.7 million shares of common stock are authorized and remain available for issuance under the ESPP. Beginning on January 1, 2010, and each January 1st thereafter, the number of shares of common stock available for issuance under the ESPP shall automatically increase by an amount equal to the lesser of (i) one million shares or (ii) an amount determined by the ESPP administrator. However, in no event shall the number of shares of common stock available for future sale under the ESPP exceed 10 million shares, subject to capitalization adjustments occurring due to dividends, splits, dissolution, liquidation, mergers, or changes in control.

We report our stock-based compensation expense (inclusive of our incentive stock plan, employee stock purchase plan, and 401(k) contribution matching program) in the accompanying Consolidated Statements of Operations, based on the assigned department of the recipient. Stock-based compensation expense included within “total operating costs and expenses” for the years ended December 31, 2019, 2018, and 2017, was as follows:



	Year Ended December 31,
	2019		2018		2017
Selling, general and administrative	$	14,118	$	9,268	$	9,178
Research and development	4,316		2,566		1,885
Total stock-based compensation	$	18,434	$	11,834	$	11,063

Employee stock-based compensation expense for the years ended December 31, 2019, 2018, and 2017 was recognized (reduced for estimated forfeitures) on a straight-line basis over the vesting period. Forfeitures are estimated at the time of grant and prospectively revised if actual forfeitures differ from those estimates. We estimate forfeitures of stock options using the historical exercise behavior of our employees. For purposes of this estimate, we have applied an estimated forfeiture rate of 16%, 15%, and 14% for the years ended December 31, 2019, 2018, and 2017, respectively.

The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model. The following assumptions were used to determine fair value for the stock awards granted in the applicable year:



	Year Ended December 31,
	2019	2018	2017
Expected option life (in years) (a)	5.34	4.73	4.84
Risk-free interest rate (b)	1.47% - 2.49%	1.81% - 2.75%	0.82% - 1.90%
Volatility (c)	61.6% - 76.1%	50.0% - 56.2%	49.3% - 61.4%
Dividend yield (d)	—%	—%	—%
Weighted-average grant-date fair value per stock option	$5.85	$8.64	$2.89



	Number of Shares		Weighted- Average Exercise Price/Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding — December 31, 2016	14,340,582		$	6.86
Granted	1,223,483		6.51
Exercised	(937,482	)	6.40			$	6,813	(1	)
Forfeited	(244,793	)	6.26
Expired	(524,577	)	6.27
Outstanding — December 31, 2017	13,857,213		6.89
Granted	1,094,358		18.87
Exercised	(7,858,141	)	6.74			$	84,758	(1	)
Forfeited	(214,464	)	6.54
Expired	(35,381	)	6.94
Outstanding — December 31, 2018	6,843,585		8.98
Granted	1,113,081		10.54
Exercised	(1,121,403	)	6.38			$	2,919	(1	)
Forfeited	(172,074	)	9.84
Expired	(223,253	)	11.09
Outstanding — December 31, 2019	6,439,936		$	9.61	6.16	$	1	(2	)
Vested (exercisable) — December 31, 2019	4,682,766		$	8.66	5.29	$	1	(2	)
Unvested (unexercisable) — December 31, 2019	1,757,170		$	12.14	8.47	$	—	(2	)



	Outstanding				Exercisable
Exercise Price	Granted Stock Options Outstanding	Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price		Granted Stock Options Exercisable	Weighted- Average Exercise Price
$1.47 - 4.96	91,599	2.80	$	4.16	82,428	$	4.15
$4.97 - 6.91	2,210,050	6.18	6.00		1,866,277	5.97
$6.92 - 9.00	1,801,136	4.91	7.84		1,565,804	7.76
$9.01 - 12.00	1,135,793	7.23	11.03		509,250	10.70
$12.01 - 22.64	1,201,358	7.24	17.97		659,007	17.39
	6,439,936	6.16	$	9.61	4,682,766	$	8.66

As of December 31, 2019, there was unrecognized compensation expense of $7.3 million related to unvested stock options, which we expect to recognize over a weighted average period of 2.0 years.



	Number of Restricted Stock Awards		Weighted Average Fair Value per Share at Grant Date
Unvested — December 31, 2016	2,152,157		$	6.29
Granted	927,306		6.22
Vested	(1,137,555	)	6.38
Forfeited	(378,990	)	5.95
Unvested — December 31, 2017	1,562,918		6.27
Granted	1,092,534		17.35
Vested	(635,320	)	6.51
Forfeited	(218,002	)	7.56
Unvested — December 31, 2018	1,802,130		12.75
Granted	1,091,353		10.50
Vested	(972,404	)	11.70
Forfeited	(261,320	)	11.48
Unvested — December 31, 2019	1,659,759		$	11.67

As of December 31, 2019, there was approximately $13.5 million of unrecorded expense related to issued restricted stock awards that will be recognized over an estimated weighted average period of 1.9 years. These unvested shares are included in our reported issued and outstanding common stock as of December 31, 2019.

Our outstanding restricted stock units substantially relate to awards that contain “market-based” vesting conditions that are issued to our executive officers. These conditions are specified in each award agreement and result in a variable number of shares that become issuable at the assessment date, after review and approval by our Compensation Committee. A summary of restricted stock unit activity is as follows:



	Number of Restricted Stock Units		Weighted Average Fair Value per Share at Grant Date
Outstanding — December 31, 2017	217,206		$	6.49
Granted	138,334		28.31
Market-based achievement adjustment at vesting	100,326		6.49
Share issuance upon approved achievement date	(200,652	)	6.49
Outstanding — December 31, 2018	255,214		17.91
Granted	257,585		12.87
Market-based achievement adjustment at vesting	116,880		6.49
Share issuance	(243,760	)	7.04
Outstanding — December 31, 2019	385,919		$	18.00