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Stock-Based Compensation
 6 Months Ended
Jul. 01, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
We allocated the stock-based compensation expense for our equity incentive plans and our Employee Stock Purchase Plan (ESPP) as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Research and development$9,549 $13,667 $18,448 $26,063 
Selling, general and administrative15,073 14,368 25,933 36,625 
Total stock-based compensation expense$24,622 $28,035 $44,381 $62,688 
Stock-based compensation for each type of award under our equity incentive plans and ESPP were as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Stock options$3,493 $5,902 $7,171 $10,596 
Restricted stock units18,928 15,412 32,001 27,081 
Performance stock units1,581 4,698 3,290 22,645 
ESPP620 2,023 1,919 2,366 
Total stock-based compensation expense$24,622 $28,035 $44,381 $62,688 
On May 25, 2022, at the 2022 Annual Meeting of Stockholders, our stockholders approved the amendment and restatement of Exelixis, Inc. 2017 Equity Incentive Plan (as amended and restated, the 2017 Plan). The amendment and restatement increased the share reserve under the 2017 Plan by 28,500,000 shares. As of June 30, 2022, 31,687,133 shares were available for grant under the Exelixis, Inc. 2017 Equity Incentive Plan. The share reserve is reduced by 1 share for each share issued pursuant to a stock option and 2 shares for full value awards, including restricted stock units (RSUs). 
During the six months ended June 30, 2022, we granted 587,762 stock options with a weighted average exercise price of $19.99 per share and a weighted average grant date fair value of $8.36 per share. As of June 30, 2022, there were 12,307,775 stock options outstanding and $23.6 million of related unrecognized compensation expense.
In March 2022, we awarded to certain employees an aggregate of 1,003,482 (the target amount) RSUs that are subject to a total shareholder return (TSR) market condition (the TSR-based RSUs). The TSR market condition is based on our relative TSR percentile rank compared to companies in the NASDAQ Biotechnology Index during the performance period, which is January 1, 2022 through January 3, 2025. Depending on the results relative to the TSR market condition, the holders of the TSR-based RSUs may earn up to 175% of the target amount of shares. 50% of the shares earned pursuant to the TSR-based RSU awards will vest at the end of the performance period, and the remainder will vest approximately one year later, subject to employee’s continuous service. These TSR-based RSUs will be forfeited if the market condition at or above a threshold level is not achieved at the end of the performance period on January 3, 2025.
We used a Monte Carlo simulation model and the following assumptions to determine the grant date fair value of $33.17 per share for the TSR-based RSUs:
Fair value of the Company’s common stock on grant date
$20.70 
Expected volatility
46.85 %
Risk-free interest rate
1.59 %
Dividend yield
— %
The Monte Carlo simulation model also assumed correlations of returns of the stock prices of the Company’s common stock and the common stock of a peer group of companies and historical stock price volatility of the peer group of companies. The valuation model also used terms based on the length of the performance period and compound annual growth rate goals for total stockholder return based on the provisions of the award.
During the six months ended June 30, 2022, we granted 4,585,618 service-based RSUs with a weighted average grant date fair value of $20.64 per share. As of June 30, 2022, there were 11,496,162 RSUs outstanding, including the TSR-based RSUs, and $207.2 million of related unrecognized compensation expense.
Stock options and service-based RSUs granted to employees during the six months ended June 30, 2022 have vesting conditions and contractual lives of a similar nature to those described in “Note 8. Employee Benefit Plans” of the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Fiscal 2021 Form 10-K.
As of June 30, 2022, there were 5,662,157 performance-based restricted stock units (PSUs) outstanding and $113.5 million of related unrecognized stock-based compensation expense. Expense recognition for PSUs commences when it is determined that achievement of the performance target is probable. For more information about our PSUs, see “Note 8. Employee Benefit Plans” of the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Fiscal 2021 Form 10-K.