In April 2021, the Board of Directors and the stockholders of the Company adopted the 2021 Equity Incentive Plan (the 2021 Plan). Under the 2021 Plan, 16.2 million shares of Class A common stock were reserved. Additionally, shares were reserved for all outstanding awards under the previous 2016 Plan. The Company may grant stock options, restricted stock units (RSUs), stock appreciation rights, restricted stock awards and other forms of stock-based compensation.

As of December 31, 2023, 10.9 million shares of Class A common stock were available for grant.

The following table presents the classification of stock-based compensation expense for employees and non-employees within the Consolidated Statements of Operations:


	Years ended December 31,
(in thousands)	2023		2022		2021
Cost of revenue	$	5,326	$	2,755	$	—
Research and development	21,992		10,065		4,841
General and administrative	24,361		14,052		8,989
Total	$	51,679	$	26,872	$	13,830

Stock options are primarily granted to executive leaders at the Company, generally vest over four years and expire no later than 10 years from the date of grant. Stock option activity during the year ended December 31, 2023 was as follows:


(in thousands except share and per share amounts)	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2022	16,154,924	$	5.10	7.5	$	67,997
Granted	5,083,268	6.23
Cancelled	(1,460,517)	8.67
Exercised	(4,820,058)	2.20			32,621
Outstanding as of December 31, 2023	14,957,617	$	6.13	7.0	$	72,416
Exercisable as of December 31, 2023	9,844,841	$	5.07	6.3	$	59,144

The fair value of options granted to employees is calculated on the grant date using the Black-Scholes option valuation model. The weighted-average grant-date fair values of stock options granted during the years ended December 31, 2023, 2022 and 2021 were $5.64, $6.57 and $7.66, respectively.

The following weighted-average assumptions were used to calculate the grant-date fair value of stock options:


	Years ended December 31,
	2023		2022		2021
Expected term (in years)	5.8		6.2		6.3
Expected volatility	66	%	63	%	65	%
Expected dividend yield	—		—		—
Risk-free interest rate	3.6	%	1.9	%	1.1	%

As of December 31, 2023, $32.6 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years.

Equity awards granted to employees primarily consist of RSUs and generally vest over four years. The weighted-average grant-date fair value of RSUs generally is determined based on the number of units granted and the quoted price of Recursion’s common stock on the date of grant.

The following table summarizes Recursion’s RSU activity during the year ended December 31, 2023:


	Stock units	Weighted-average grant date fair value
Outstanding as of December 31, 2022	6,894,525	$	8.17
Granted	14,332,216	8.61
Vested	(3,385,863)	8.52
Forfeited	(2,617,114)	8.29
Outstanding as of December 31, 2023	15,223,764	$	8.39

The fair market value of RSUs vested was $26.9 million during the year ended December 31, 2023. As of December 31, 2023, $119.5 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over approximately the next three years.