Kodiak Sciences Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 103 The Company determined the exchange of the original award of annual equity incentive awards with the modified award of options granted under the LTPIP Program represented a change in the original terms and conditions. The modification resulted in additional compensation cost equal to the incremental value between the original and modified awards to be recognized. For the annual equity incentive awards, the Company continues to record the unrecognized compensation expense over the original vesting period. For the options granted under the LTPIP Program, the stock-based compensation expense recognized during the years ended December 31, 2023, 2022 and 2021 was $53.7 million, $65.1 million and $15.7 million, respectively. As of December 31, 2023, there was $165.4 million of unrecognized stock-based compensation expense related to the 6,207,334 options granted under the LTPIP Program, but not yet earned or vested, to be recognized over a weighted-average period of 3.04 years. Stoc t k Options Stock option activity, including stock options and performance-based stock options under the 2021 LTPIP, 2018 Plan and 2015 Plan is summarized as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2022 16,542,107 $ 51.48 7.91 $ 5,410 Granted 3,305,000 $ 7.09 Exercised (7,528) $ 7.96 Forfeited or canceled (2,238,113) $ 45.99 Outstanding at December 31, 2023 17,601,466 $ 43.86 7.29 $ 933 Shares exercisabl a e December 31, 2023 9,671,905 $ 38.37 6.41 $ 903 Vested and expected to vest December 31, 2023 17,601,466 $ 43.86 7.29 $ 933 The weighted-average grant date fair value of the time-vested stock options granted for 2023, 2022 and 2021 was $4.51, $6.31 and $51.55 per share, respectively. The total intrinsic value of stock options exercised during 2023 was not significant. The total intrinsic value of stock options exercised during 2022 and 2021 was $6.1 million and $40.2 million, respectively. The intrinsic value represents the amount by which the market price of the underlying stock exceeds the exercise price of an option. Empl m oy l ee Stoc t k Options The Company estimated the fair value of employee stock options using the Black-Scholes valuation model. The fair value of time-vested employee stock options was estimated using the following weighted-average assumptions: Year Ended December 31, 2023 2022 2021 Expected volatility 86% 83% 61% Risk-free interest rate 3.55% 2.86% 1.03% Dividend yield 0% 0% 0% Expected term 4.00 5.98 6.25 The Company granted 3,282,500 options to employees in 2023. The total fair value of employee options vested during the years ended December 31, 2023, 2022 and 2021 was $25.6 million, $28.9 million and $26.9 million, respectively. Stock- based compensation expense recognized during the years ended December 31, 2023, 2022 and 2021 for options granted to employees, including the options granted under the LTPIP Program, was $80.8 million, $93.8 million and $44.1 million, respectively.