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EQUITY INCENTIVE PLANS | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
EQUITY INCENTIVE PLANS | EQUITY INCENTIVE PLANS 2016 Plan In October 2016, the Company adopted the 2016 Equity Incentive Plan, (the “2016 Plan”). The 2016 Plan was approved by the Company’s stockholders and became effective on October 19, 2016. On the first day of each fiscal year starting from the 2017 fiscal year, the 2016 Plan authorizes an annual increase in the number of shares available for issuance equal to the least of (i) 3,865,000 shares, (ii) 5% of the shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year or (iii) such number of shares determined by the Board. As of December 31, 2022, the Company has reserved 7,822,637 shares of common stock for issuance under the 2016 Plan. Pursuant to the 2016 Plan, stock options, restricted stock, restricted stock units, performance units, performance shares, and stock appreciation rights may be granted to employees, consultants and directors of the Company. Options were not granted during the years ended December 31, 2022, 2021 and 2020. Employee Stock Purchase Plan In October 2016, the Board and stockholders approved the 2016 Employee Stock Purchase Plan (“ESPP”). Under the ESPP, the Company initially reserved 483,031 shares of common stock for issuance as of its effective date of October 19, 2016. On the first day of each fiscal year starting from the 2017 fiscal year, the number of shares reserved for the ESPP increases by the least of (i) 966,062 shares, (ii) 1.5% of the shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Board. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides for 12 month offering periods that each contain two 6-month purchase periods. At the end of each purchase period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on (i) the first trading day of the offering period or (ii) the last trading day of the purchase period. Equity Incentive Plan A summary of awards available for grant under the 2016 Plan is as follows:
| Shares Available for Grant
Balance as of December 31, 2020 | 6,505,390 |
Additional awards authorized | 1,450,967 |
Awards granted | (1,289,567) |
Awards forfeited | 356,999 |
Awards withheld for tax purposes | 135,886 |
Balance as of December 31, 2021 | 7,159,675 |
Additional awards authorized | 1,476,018 |
Awards granted | (1,036,109) |
Awards forfeited | 223,053 |
Balance as of December 31, 2022 | 7,822,637 |
Restricted Stock Units and Performance-Based Restricted Stock Units The fair value of restricted stock units (“RSUs”) and performance-based restricted stock units ("PRSUs") are based on the Company’s closing stock price on the date of grant. The fair value of market based PRSUs were estimated at the date of grant using the Monte-Carlo option pricing model. A summary is as follows:
| Restricted Stock Units |  | Performance Based Restricted Stock Units and Market-Based Units
| Shares Underlying RSUs |  | Weighted Average Grant Date Fair Value |  | Shares Underlying PRSUs 1 |  | Weighted Average Grant Date Fair Value
Balance as of December 31, 2020 | 837,204 |  |  | $ | 82.82 |  |  | 276,955 |  |  | $ | 128.54 |
Granted | 1,009,457 |  |  | 88.67 |  |  | 280,110 |  |  | 135.31 |
Vested | (285,335) |  |  | 78.10 |  |  | (126,671) |  |  | 165.39 |
Forfeited | (201,079) |  |  | 104.19 |  |  | (142,144) |  |  | 127.95 |
Balance as of December 31, 2021 | 1,360,247 |  |  | 84.99 |  |  | 288,250 |  |  | 119.21 |
Granted | 691,128 |  |  | 147.94 |  |  | 344,981 |  |  | 138.99 |
Vested | (390,238) |  |  | 85.55 |  |  | (46,934) |  |  | 257.61 |
Forfeited | (196,471) |  |  | 110.22 |  |  | (25,208) |  |  | 109.82 |
Balance as of December 31, 2022 | 1,464,666 |  |  | 111.16 |  |  | 561,089 |  |  | 120.22 |
1 Based on the maximum number of performance based restricted stock units in the key executive grant agreements, the actual number of units granted will be based on the annual unit volume CAGR as described below. As of December 31, 2022, there was total unamortized compensation costs of $112.5 million, net of estimated forfeitures, related to unrecognized RSU expense, which the Company expects to recognize over a weighted average period of 1.9 years. Aggregate intrinsic value of the RSUs was $137.2 million, $160.1 million and $198.6 million as of December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, 1.4 million shares of RSUs were expected to vest with an aggregate intrinsic value of $128.2 million. Total vest date fair value of RSUs was $33.4 million, $22.3 million, and $16.3 million during the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, there was total unamortized compensation costs of $28.2 million, net of estimated forfeitures, related to unrecognized PRSU expense, which the Company expects to recognize over a weighted average period of 2.1 years. Aggregate intrinsic value of the PRSUs was $52.6 million, $33.9 million and $65.7 million as of December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, 0.5 million shares of PRSUs were expected to vest with an aggregate intrinsic value of $49.9 million. The vest date fair value of PRSUs was $12.1 million, $20.9 million, and $0.0 million during the years ended December 31, 2022, 2021, and 2020, respectively. PRSUs and Market-based RSUs The Company grants PRSUs to key executives of the Company. PRSUs can be earned in accordance with the performance equity program for each respective grant: In February 2020, the Company granted PRSUs (“February 2020 awards”) to be earned based on compound annual growth rate (“CAGR”) of fiscal year 2022's annual unit volume compared to fiscal year 2019's annual unit volume CAGR, measuring a minimum performance threshold of 19.7% to earn 50.0% of target, and a maximum threshold of 29.0% achieved to earn 200.0% of target. These February 2020 awards are subject to the recipient's continued employment through the vesting date of March 15, 2023. In January 2021, the Company granted PRSUs (“January 2021 awards”) to be earned based on fiscal year 2021's annual consolidated revenue compared to fiscal year 2020's annual consolidated revenue, measuring a performance threshold of 10.0% to earn 100.0% of target. These January 2021 awards were subject to the recipient's continued employment through the vesting date of March 15, 2022. In February 2021, the Company granted PRSUs (“February 2021 awards”) to be earned based on fiscal year 2023's annual unit volume CAGR compared to fiscal year 2020's annual unit volume CAGR, measuring a minimum performance threshold of 19.7% to earn 50.0% of target, and a maximum threshold of 29.0% achieved to earn 200.0% of target. These February 2021 awards are subject to recipient's continued employment through the vesting date of March 15, 2024. In February 2022, the Company granted PRSUs (“February 2022 awards”) to be earned based on fiscal year 2024's annual unit volume CAGR compared to fiscal year 2021's annual unit volume CAGR, measuring a minimum performance threshold of 13.0% to earn 50.0% of target, and a maximum threshold of 23.0% achieved to earn 200.0% of target. These February 2022 awards are subject to the recipient's continued employment through the vesting date of March 15, 2025. In addition, in February 2022, the Company granted market-based RSUs to its Chief Executive Officer. These RSUs to be earned based on both the fiscal year 2024's annual unit volume CAGR compared to fiscal year 2021's annual unit volume CAGR and a comparison of the S&P Healthcare Index to the Company's total shareholder return (“TSR”). The fair value of the TSR was based on the expected term of 2.9 years, interest risk free rate of 1.7%, implied volatility of 81.2% and no dividend yield. These February 2022 awards are subject to the Chief Executive Officer's continued employment through the vesting date of March 15, 2025. Options The following table summarizes stock option activity:
|  |  | Options Outstanding
Options Outstanding |  | Weighted- Average Exercise Price Per Share |  | Weighted- Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2020 | 609,881 |  |  | $ | 40.18 |  |  | 6.24 |  | $ | 120,163 |
Options exercised | (90,939) |  |  | 31.15 |  |  |  |  |
Options forfeited | (14,836) |  |  | 68.81 |  |  |  |  |
Balance at December 31, 2021 | 504,106 |  |  | 40.97 |  |  | 5.20 |  | 38,675 |
Options exercised | (174,539) |  |  | 36.82 |  |  |  |  |
Options forfeited | (1,374) |  |  | 83.15 |  |  |  |  |
Balance at December 31, 2022 | 328,193 |  |  | 43.00 |  |  | 4.43 |  | 16,635 |
Options exercisable – December 31, 2022 | 327,768 |  |  | 42.95 |  |  | 4.43 |  | 16,631 |
Options vested and expected to vest – December 31, 2022 | 328,191 |  |  | 43.00 |  |  | 4.43 |  | 16,635 |
There have been no options granted since December 31, 2019. As of December 31, 2022, there was an immaterial amount of unamortized compensation costs as the options are fully vested. The total estimated grant date fair value of options vested during the period was $2.4 million, $2.8 million and $4.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. Employee Stock Purchase Plan The ESPP provides for 12 month offering periods that each contain two 6-month purchase periods. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15.0% of their eligible compensation, subject to any plan limitations. At the end of each purchase period, employees purchase shares at 85% of the lower of the fair value of the Company's stock price at the enrollment date and the purchase date. During the year ended December 31, 2022, 87,664 shares of common stock have been issued to employees participating in the ESPP and 2,206,279 shares were available for issuance under the ESPP. On each purchase date, participating employees will purchase common stock at a price per share equal to 85% of the lesser of the fair market value of the shares of the Company’s common stock on (i) the first trading day of the applicable offering period, or (ii) the last trading day of each purchase period in the applicable offering period. If the stock price of the Company's common stock on any purchase date in an offering period is lower than the stock price on the first trading date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period ("ESPP reset"). During the November 30, 2022 purchase period, there was an ESPP reset that resulted in additional expense of approximately $0.2 million, which will be recognized over an offering period from December 1, 2022 to May 31, 2023. The ESPP provides for 12 month offering periods that contain two six-month purchase periods. The fair value using the Black-Scholes option pricing model is estimated on the enrollment date. For the offering period which started on June 1, 2022, the assumptions included the expected term ranging from 0.5 year to 1.0 year, expected volatility ranging from 81.4% to 96.3%, risk-free rate ranging from 1.6% to 2.2% and dividend yield of 0.0%. For the offering period which started on December 1, 2022 the assumptions included the expected term ranging from 0.5 year to 1.0 year, expected volatility ranging from 68.1% to 73.4%, risk-free rate ranging from 4.7% to 4.7% and dividend yield of 0.0%. The fair value of ESPP shares to be purchased during the six-month period from June 1, 2022 to November 30, 2022 was $55.02 per share, for the one-year period from June 1, 2022 to May 31, 2023 was $68.52 per share and the six-month period from December 1, 2022 to May 31, 2023 was $48.34 per share. As of December 31, 2022, the Company had $4.4 million of unrecognized compensation expense that will be recognized over a weighted average period of 0.7 years.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 + Details
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