As of March 31, 2024, the 2005 Incentive Plan, as amended, has a total reserve of 32,168,895 shares of which 3,393,482 shares are available for issuance.

The stock-based compensation related to our stock-based awards and employee stock purchase plan for the three months ended March 31, 2024 and 2023 is as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Cost of net revenues	$	2,064	$	1,807
Selling, general and administrative	28,494		28,691

Research and development	8,230		7,237
Total stock-based compensation	$	38,788	$	37,735

The fair value of RSUs is based on our closing stock price on the date of grant. RSUs granted generally vest over a period of four years. A summary for the three months ended March 31, 2024 is as follows:


	Number of Shares Underlying RSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2023	736	$	367.63
Granted	610	311.35
Vested and released	(231)	377.91
Forfeited	(20)	377.56
Unvested as of March 31, 2024	1,095	$	333.90	2.0	$	359,130

As of March 31, 2024, we expect to recognize $311.9 million of total unamortized compensation costs, net of estimated forfeitures, related to RSUs over a weighted average period of 3.2 years.

We grant MSUs to members of senior management. Each MSU represents the right to one share of our common stock. The actual number of MSUs which will be eligible to vest will be based on the performance of Align’s stock price relative to the performance of a stock market index over the vesting period. MSUs vest over a period of three years and the maximum number eligible to vest in the future is 250% of the MSUs initially granted.

The following table summarizes the MSU performance activity for the three months ended March 31, 2024:


	Number of Shares Underlying MSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2023	158	$	811.06
Granted	83	617.79
Vested and released 1	(32)	1,102.09
Forfeited	(5)	1,102.09
Unvested as of March 31, 2024	204	$	679.52	2.1	$	66,889

1 Includes MSUs vested during the period below 100% of the original grant as actual shares released is based on Align’s stock performance over the vesting period.

As of March 31, 2024, we expect to recognize $82.2 million of total unamortized compensation costs, net of estimated forfeitures, related to MSUs over a weighted average period of 2.1 years.

During the three months ended March 31, 2024, we did not grant any PSUs to any employees. In the fourth quarter of 2022, we granted PSUs to certain employees which are eligible to vest based on the achievement of project-based milestones over a term of 2.2 years. Total PSUs granted were 4,728 and the weighted average grant date fair value for the PSUs was $201.63. Compensation costs related to PSUs is not material to our operating results.

As of March 31, 2024, we have 1,931,910 shares available for future issuance under our Amended and Restated 2010 Employee Stock Purchase Plan (the “2010 Purchase Plan”).

The fair value of the option component of the 2010 Purchase Plan shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:


	Three Months Ended March 31,
		2024			2023
Expected term (in years)		0.9			1.8
Expected volatility		56.0		%	58.6		%
Risk-free interest rate		4.8		%	4.8		%
Expected dividends		—			—
Weighted average fair value at grant date		$	100.10		$	138.13

As of March 31, 2024, we expect to recognize $14.1 million of total unamortized compensation costs related to future employee stock purchases over a weighted average period of 0.8 years.