In June 2011, the Company’s stockholders approved the 2011 Equity Incentive Plan (“2011 Plan”). The 2011 Plan, which authorized 13.0 million shares of common stock to be issued, allows for the grant of stock options, SARs, RSAs, RSUs, performance shares and performance units. In June 2016 and 2015, shareholders authorized the issuance of an additional 1.3 million and 1.7 million shares, respectively, of common stock under the 2011 Plan. As of December 31, 2018, the 2011 Plan was merged into the 2018 Plan (defined below). As a result, there were no shares of common stock remaining available for future grant under the 2011 Plan.

In June 2013, the Company’s stockholders approved the 2013 ESPP with approximately 0.3 million shares of common stock available to be issued. In June 2016, the Company’s stockholders approved an additional approximately 0.3 million shares of common stock available to be issued to be added to the 2013 ESPP. As of December 31, 2018, 0.2 million shares of common stock remain available for future grant under the 2013 ESPP.

In September 2014, the Company initiated the 2014 Employment Commencement Incentive Plan (“2014 Plan”) with approximately 0.6 million shares of common stock available to be issued. In October 2015, June 2017 and July 2018, the 2014 Plan was increased by 1.0 million, 3.8 million and 1.2 million shares of common stock available to be issued, respectively. As of December 31, 2018, 0.9 million shares of common stock remain available for future grant under the 2014 Plan.

In June 2018, the Company’s stockholders approved the 2018 Equity Incentive Plan (“2018 Plan”). The 2018 Plan, which authorized 2.9 million shares of common stock to be issued, allows for the grant of stock options, SARs, RSAs, RSUs, performance shares and performance units. The 2011 Plan was merged into the 2018 Plan and, as a result, all remaining shares in the 2011 Plan were transferred into the 2018 Plan. As of December 31, 2018, 4.4 million shares of common stock remain available for future grant under the 2018 Plan.

In general, stock options have a ten-year term and vest over a four-year period, with one-fourth of the underlying shares vesting on the first anniversary of the grant and 1/48th of the underlying shares vesting monthly thereafter, such that the underlying shares will be fully vested on the fourth anniversary of the grant, subject to the terms of the applicable plan under which they were granted.

The fair values of stock options granted during the periods presented were measured on the date of grant using the Black-Scholes-Merton option-pricing model, with the following assumptions:

The amounts estimated according to the Black-Scholes-Merton option-pricing model may not be indicative of the actual values realized upon the exercise of these options by the holders.

The following tables summarize the Company’s stock option activity for each of the periods indicated:

	For the Year Ended December 31,
	2018					2017							2016
				Weighted							Weighted					Weighted
				Average							Average					Average
				Exercise							Exercise					Exercise
	Shares			Price		Shares					Price		Shares			Price
Grants outstanding at beginning of the period		8,806,204		$	29.74		5,436,951				$	22.70		6,515,976		$	23.91
Granted		2,152,439			90.15		4,805,722		(1	)		35.09		1,285,051			14.89
Exercised		(2,119,306	)		22.89		(792,845	)				17.40		(1,056,821	)		18.31
Cancelled		(448,166	)		46.11		(643,624	)				25.44		(1,307,255	)		24.61
Grants outstanding at end of the period		8,391,171		$	46.09		8,806,204				$	29.74		5,436,951		$	22.70

Grants exercisable at end of the period		2,304,791		$	27.69		3,288,712				$	24.76		2,942,624		$	24.42
Grants vested and expected to vest at end of the period		6,643,835		$	45.43		6,910,022				$	28.49		5,116,409		$	22.83

(1)

In June 2017, the Company granted its new CEO 3,300,000 options with service and market conditions. These options have a five-year cliff vesting schedule. The fair value of $13.48 for these options was determined by a lattice model with Monte Carlo simulations. The remaining are service-based options which have a four-year vesting schedule with 25% vesting on the first anniversary and 1/48 monthly thereafter.

The weighted-average grant date fair value per share of stock options granted during the years ended December 31, 2018, 2017 and 2016 was $44.66, $14.78 and $12.46, respectively.

			Weighted
	Aggregate		Average
	Intrinsic		Remaining
	Value		Contractual
	(in thousands)		Life (Years)
Options outstanding at December 31, 2018	$	551,131	7.7
Options exercisable at December 31, 2018	$	187,693		5.5
Options vested and expected to vest at December 31, 2018	$	433,681	7.4

The following table summarizes the Company’s stock options vested and exercised for each of the periods indicated:

In February 2016, the Company granted to executives approximately 0.3 million stock options with service- and performance-based conditions (“February 2016 Performance Grants”). Vesting is achieved based upon the FDA approval of EXONDYS 51 and submission of MAA for eteplirsen to the EMA and continuing service over a four-year period. As a result of both milestones achieved in 2016, 50% of the February 2016 performance grants were triggered to be vested immediately and the remaining 50% are subject to the remaining service conditions of the awards. Additionally, in June 2013, the Company granted to executives approximately 0.4 million stock options with service- and performance-based conditions (“June 2013 Performance Grants”). Vesting was achieved based upon various regulatory approval for EXONDYS 51 and filings of investigational new drug submissions for other drug candidates and continuing service over a four-year period. 80% of the June 2013 Performance Grants was vested as of December 31, 2016 and the remaining 20% were forfeited.

For the years ended December 31, 2018, 2017 and 2016, the Company has recognized approximately $0.2 million, $0.9 million and $5.0 million in stock-based compensation expense related to the options with performance-based criteria, respectively.

As of December 31, 2018, the total stock-based compensation expense related to non-vested awards with only service-vesting conditions not yet recognized is approximately $73.0 million, those with service- and performance-based conditions approximates $0.2 million and those with market-based conditions approximates $31.0 million.

The Company grants RSAs to members of its board of directors and certain employees. The following table summarizes the Company’s RSA activity for each of the periods indicated:

	For the Year Ended December 31,
	2018					2017					2016
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Grants outstanding at beginning of the period		411,781		$	37.23		153,170		$	34.53		161,320		$	21.50
Granted		27,590			98.57		341,500			34.58		117,553			41.22
Vested		(187,050	)		39.34		(63,264	)		14.60		(59,703	)		13.62
Forfeited		—			—		(19,625	)		43.02		(66,000	)		33.51
Grants outstanding at end of the period		252,321		$	42.37		411,781		$	37.23		153,170		$	34.53

In September 2016, the Company granted certain executives RSAs with a performance condition relating to certain sales targets. If the sales targets are achieved within the required time frame, the number of RSAs may be increased from 71,925 to 89,906 shares. In December 2017, the Company modified the expiration date of these RSAs from June 30, 2018 to January 1, 2019. As a result of this modification, the fair value was changed from $48.94 to $54.29. Through December 31, 2017, the Company had not recorded any stock-based compensation expense associated with these awards as the achievement of the performance conditions was not deemed probable. However, as of December 31, 2018, the first sales target related to these RSAs was achieved and the second target was not deemed as probable of being achieved. Accordingly, the Company recognized approximately $3.3 million of stock-based compensation expense during the year ended December 31, 2018, related to the achievement of the first performance condition.

The Company also grants RSUs to members of its board of directors and employees. The following table summarizes the Company’s RSU activity for the periods indicated:

	For the Year Ended December 31
	2018					2017
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Shares			Price		Shares			Price
Grants outstanding at beginning of the period		66,552		$	33.72		—		$	—
Granted		230,736			87.95		181,029			33.03
Vested		(30,276	)		33.23		(78,017	)		32.63
Forfeited		(15,714	)		71.45		(36,460	)		32.63
Grants outstanding at end of the period		251,298		$	81.21		66,552		$	33.72

In March 2017, the Company granted executives 156,029 RSUs with performance conditions relating to certain sales target and regulatory milestones. The first performance condition of these RSUs was achieved in June 2017. The second performance condition was deemed as probable of being achieved in September 2017 and was achieved in May 2018. For the years ended December 31, 2018 and 2017, the Company recognized approximately $0.2 million and $2.9 million of stock-based compensation expense, respectively, related to the performance conditions of these RSUs. The third performance milestone was not deemed as probable of being achieved as of December 31, 2018. If and when deemed probable that the last performance milestone may be achieved within the required time frame, the Company may recognize up to $0.7 million of stock-based compensation related to the third performance milestone of these grants.

The Company issues SARs to employees on the same terms as options granted to employees. The grant date fair value of the SARs is determined using the same valuation assumptions as for stock options described above. Stock-based compensation expense is recognized on a straight-line basis over the vesting period of the SARs.

As of December 31, 2018, there were 100,000 SARs vested and outstanding. These SARs were granted to the Company’s Executive Vice President and CFO in November 2012 and have an exercise price of $23.85 per share. The SARs are classified as equity as the agreements require settlement in shares of stock.

The following table summarizes the Company’s SAR activity for each of the periods indicated:

	For the Year Ended December 31,
	2018				2017				2016
			Weighted				Weighted				Weighted
			Average				Average				Average
			Exercise				Exercise				Exercise
	Shares		Price		Shares		Price		Shares		Price
Grants outstanding at beginning of the period		100,000	$	23.85		100,000	$	23.85		100,000	$	23.85
Grants outstanding at end of the period		100,000	$	23.85		100,000	$	23.85		100,000	$	23.85
Grants exercisable at end of the period		100,000	$	23.85		100,000	$	23.85		100,000	$	23.85
Grants vested and expected to vest at end of the period		100,000	$	23.85		100,000	$	23.85		100,000	$	23.85

			Weighted
	Aggregate		Average
	Intrinsic		Remaining
	Value		Contractual
	(in thousands)		Life (Years)
SARs outstanding, exercisable and vested at December 31, 2018	$	8,528	3.9

Under the Company’s ESPP, participating employees purchase common stock through payroll deductions. The purchase price is equal to 85% of the lower of the closing price of the Company’s common stock on the first business day and the last business day of the relevant purchase period. The 24-month offering period will end between February 28, 2018 and August 31, 2019. The following table summarizes the Company’s ESPP activity for each of the periods indicated:

For the years ended December 31, 2018, 2017 and 2016, total stock-based compensation expense was $50.1 million, $30.5 million and $30 million, respectively. Included in the amounts for the year ended December 31, 2017 is $2.1 million of stock-based compensation expense incurred in connection with the resignation of the Company’s former CEO. The following table summarizes stock-based compensation expense by function included within the consolidated statements of operations and comprehensive loss:

The following table summarizes stock-based compensation expense by grant type included within the consolidated statements of operations and comprehensive loss:

	For the Year Ended December 31,
	2018		2017		2016
	(in thousands)
Stock options	$	37,671	$	23,416	$	26,320
Restricted stock awards/units		10,632		5,295		872
Employee stock purchase plan		1,824		1,754		2,380
Other		—		—		390
Total stock-based compensation	$	50,127	$	30,465	$	29,962