10. Stock Based Compensation

The Company may grant qualified and non-qualified stock options, common stock and other stock-based awards under various plans to directors, officers, employees and other individuals. Stock options are granted at exercise prices of not less than the fair market value of the Company’s common stock on the date of grant. Additionally, the Company has an ESPP that allows employees to purchase Company shares at a purchase price equal to 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last day of the offering period.

Stock Options

Stock options generally vest monthly over three years for employees and one year for directors. Stock options held by employees who qualify for retirement age (defined as employees that are a minimum of 55 years of age and the sum of their age plus years of full-time employment with the Company exceeds 70 years) vest on the earlier of scheduled vest date or the date of retirement.

The fair value of the stock options granted during the three and nine months ended September 30, 2022 and 2021, was estimated based on the following weighted average assumptions:

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(1)No stock options were granted during the three months ended September 30, 2022.

Stock option activity for the nine months ended September 30, 2022, was as follows:

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The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2022 and 2021 was $2.8 million and $1.6 million, respectively.

The weighted-average grant-date fair value per share of the options granted during the nine months ended September 30, 2022 and 2021 was $12.21 and $26.21, respectively.

As of September 30, 2022, $4.2 million of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted average period of 1.95 years.

Stock-based Compensation Expense

All stock-based compensation expense is recorded in G&A expense. The following table shows total stock-based compensation expense for stock options and ESPP in the condensed consolidated statements of operations and comprehensive loss (in thousands):

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In April 2022, the Company entered into a letter agreement with Thomas Burns that amends and supplements his amended and restated employment agreement. Pursuant to the letter agreement, in the event Mr. Burns remains employed

by the Company for a twelve-month period following the first day of employment of the Company’s new Chief Executive Officer, he will be deemed “retirement eligible” for purposes of his equity awards under the terms of his equity award agreements. Conditioned on his execution of a release in favor of the Company, Mr. Burns will also receive this benefit upon any involuntary termination for reasons other than cause.