Restricted Share Units The Company grants RSUs to employees. RSUs that are granted vest over either three or four years in equal annual installments beginning on the one-year anniversary of the date of grant, provided that the employee is employed by the Company on such vesting date. If and when the RSUs vest, the Company will issue one share of common stock for each whole RSU that has vested, subject to satisfaction of the employee’s tax withholding obligations. Stock-based compensation expense related to RSUs is recognized on a straight-line basis over the employee’s requisite service period. A summary of outstanding RSU awards and the activity for the year ended December 31, 2021 was as follows: Number of Units Weighted Average Grant Date Fair Value Per Share Unvested balance - January 1, 2021 766,550 $ 7.07 Granted 1,817,594 4.62 Vested (458,416) 6.29 Forfeited (120,687) 4.94 Unvested balance - December 31, 2021 2,005,041 $ 5.15 As of December 31, 2021, there was $7.1 million of unrecognized stock-based compensation expense related to RSUs, which is expected to be recognized over the weighted-average remaining vesting period of 2.2 years. Employee Stock Purchase Plan The fair value of the ESPP Plan shares was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions: Years Ended December 31, 2021 2020 Expected term (years) 0.5 0.5 Risk-free interest rate 0.08 % 1.01 % Expected volatility 77.40 % 108.70 % Expected dividends — — The following table summarizes the reporting of total stock-based compensation expense resulting from stock options, RSUs and the ESPP (in thousands): Years Ended December 31, 2021 2020 Cost of goods sold $ 106 $ 151 Research and development 1,696 1,229 Selling, general and administrative 9,579 6,893 Total stock-based compensation expense $ 11,381 $ 8,273 XERIS BIOPHARMA HOLDINGS, INC. Notes to Consolidated Financial Statements 118
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