Kodiak Sciences Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 104 The Company estimated the fair value of the 2021 Feb PSO using the Black-Scholes valuation model. Significant assumptions utilized in estimating the fair value of 2021 Feb PSO include an expected volatility of 66%, a risk-free rate of 0.66%, expected dividend yield of 0%, and expected term of 5.94 years. In August 2021, the Company granted 478,750 performance-based stock options ("2021 Aug PSO"). These stock options will vest upon the achievement of specific clinical development milestones with the percentage of shares earned being dependent on the relative total stockholder return over the performance period. The remaining shares will then vest in 12 successive equal monthly installments after the performance criteria is achieved. As of December 31, 2022, the requisite performance criteria for the 2021 Aug PSO was not achieved and not probable and no stock-based compensation expense was recognized during the year ended December 31, 2022. The Company estimated the weighted-average fair value of the 2021 Aug PSO using the Monte Carlo simulation model. Significant assumptions utilized in estimating the fair value of 2021 Aug PSO include an expected volatility of 60%, a risk-free rate of 1.05%, expected dividend yield of 0%, and expected term of 6.49 years. Performance-based awards are recorded as expense beginning when vesting events are determined to be probable. Stock-based compensation expense recognized during the years ended December 31, 2022, 2021 and 2020 for the performance-based equity awards was $6.3 million, $11.4 million and $7.2 million, respectively. 2018 Employee Share Purchase Plan In August 2018, the Company adopted the 2018 Employee Share Purchase Plan (“ESPP”), which became effective on the business day prior to the effectiveness of the registration statement relating to the IPO. A total of 460,000 shares of common stock were initially reserved for issuance under the ESPP. The initial offering period of the ESPP was authorized by the Company’s board of directors and commenced on January 4, 2021. Each offering period is twelve months long, with two purchase periods. ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of (1) the fair market value per share of the common stock on the enrollment date or (2) the fair market value of the common stock on the exercise date. The Company issued 27,863 shares under the ESPP during the year ended December 31, 2022. Stock-based compensation expense recognized during the year ended December 31, 2022 and 2021 for the ESPP was $0.2 million and $0.3 million, respectively. Stock-Based Compensation Expense Stock-based compensation is classified in the consolidated statements of operations and comprehensive loss as follows (in thousands): Year Ended December 31, 2022 2021 2020 Research and development............................................. $ 59,288 $ 33,237 $ 16,957 General and administrative............................................. 46,745 28,148 13,711 Total stock-based compensation .................................... $ 106,033 $ 61,385 $ 30,668 As of December 31, 2022, the Company had $311.3 million of unrecognized compensation expense related to unvested share-based awards including options granted under the LTPIP Program and ESPP, which is expected to be recognized over a weighted-average period of 3.61 years.