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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION On November 30, 2017, the Company’s stockholders approved the adoption of the 2017 Employee, Director and Consultant Equity Incentive Plan (as amended, the “2017 Plan”). The 2017 Plan allows the Company, under the direction of the Compensation and Human Capital Committee of the Board of Directors (the "CHCC"), to make grants of restricted and unrestricted stock and stock unit awards to employees, consultants and directors. Stockholders have subsequently approved amendments to the 2017 Plan increasing the shares available to grant thereunder, including most recently at the Company's annual meeting of stockholders held on June 1, 2023, when stockholders approved an amendment to the 2017 Plan to increase the aggregate number of shares of common stock available thereunder for the granting of awards by an additional 4.8 million shares. As of December 31, 2023, the Company had 4.7 million shares of common stock available for grant under the 2017 Plan. If an RSU awarded under the 2017 Plan is cancelled or forfeited without the issuance of shares of common stock, the unissued or reacquired shares that were subject to the RSU will again be available for issuance pursuant to the 2017 Plan. The number of shares, terms, and vesting periods are generally determined by the Company’s Board of Directors or the CHCC on an award-by-award basis. RSUs granted to employees generally vest either ratably over three or four years or as a cliff vesting after three years either on the anniversary of the date on which the RSUs were granted or during the month in which such anniversary dates occur. The number of PSUs awarded to certain employees may be increased or may be reduced based on certain additional performance and market metrics. RSUs granted to non-employee directors vest in full upon the earlier of the completion of one year of service following the date of the grant or the date of the next annual meeting of stockholders following such grant. Options granted to the Company's President and Chief Executive Officer as an inducement to his employment expire on August 13, 2027. The performance and market conditions associated with PSU awards granted during the year ended December 31, 2023 include vesting that is based on revenue targets (34% weighting), adjusted earnings per share targets (33% weighting), and relative total stockholder return (33% weighting) measured against the Nasdaq Health Care Index (IXHC) using the 20-trading day averages at the beginning and end of the measurement period. The measurement period for the relative total stockholder return metric is January 1, 2023 to December 31, 2025, and the revenue and adjusted earnings per share metrics will be measured based on fiscal year 2025 results. The Company estimates the likelihood of achievement of performance conditions at the end of each period. To the extent those awards or portions thereof are considered probable of being achieved, such awards or portions thereof are expensed over the performance period. The portion of the awards pertaining to relative total stockholder return represent market conditions and, accordingly, the estimated fair value of such awards are recognized over the performance period. Stock Options A summary of the stock option activity under the Company's equity plans, and inducement awards for the year ended December 31, 2023 is as follows:
(number of shares in millions) | Number of shares |  | Weighted average exercise price |  | Weighted average remaining contractual life (years)
Options outstanding at December 31, 2022 | 0.7 |  |  | $ | 13.38 |  |  |
Options outstanding at December 31, 2023 | 0.7 |  |  | 13.38 |  |  | 3.62
Options exercisable at December 31, 2023 | 0.5 |  |  | 13.38 |  |  | 3.62
Options vested and expected to vest | 0.7 |  |  | $ | 13.38 |  |  | 3.62
There were no options granted during the years ended December 31, 2023, 2022 and 2021. Restricted Stock Units A summary of the RSU awards activity under the Company's equity plans and inducement awards, including PSU awards, for the year ended December 31, 2023 is as follows:
| 2023
(number of shares in millions) | Number of shares |  | Weighted average grant date fair value
RSUs unvested and outstanding at December 31, 2022 | 3.7 |  |  | $ | 25.08 |
RSUs granted | 2.4 |  |  | 23.02 |
Less: |  |  |
RSUs vested | (1.3) |  |  | 23.55 |
RSUs canceled | (0.4) |  |  | 24.38 |
RSUs unvested and outstanding at December 31, 2023 | 4.4 |  |  | $ | 24.37 |
The weighted average grant-date fair value of RSUs granted during the years ended December 31, 2023, 2022, and 2021 was $23.02, $25.78, and $29.83, respectively. The fair value of RSUs that vested during the years ended December 31, 2023, 2022, and 2021 was $30.5 million, $31.0 million, and $22.6 million, respectively. Stock-based compensation expense recognized and included in the Consolidated Statements of Operations was allocated as follows:
| Years Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Cost of testing revenue | $ | 1.4 |  |  | $ | 1.7 |  |  | $ | 1.5 |
Cost of other revenue | — |  |  | — |  |  | 0.1 |
Research and development expense | 4.0 |  |  | 5.2 |  |  | 4.2 |
Selling, general, and administrative expense | 35.3 |  |  | 31.2 |  |  | 30.5 |
Total stock-based compensation expense | $ | 40.7 |  |  | $ | 38.1 |  |  | $ | 36.3 |
As of December 31, 2023, there was $66.2 million of total unrecognized stock-based compensation expense that will be recognized over a weighted-average period of 1.9 years. The Company recognizes forfeitures as they occur. The aggregate intrinsic value of options outstanding, aggregate intrinsic value of options that are fully vested and aggregate intrinsic value of RSUs vested and expected to vest is as follows:
(in millions) | As of December 31, 2023
Aggregate intrinsic value of options outstanding | $ | 3.9 |
Aggregate intrinsic value of options fully vested | 2.6 |
Aggregate intrinsic value of RSUs outstanding | 84.1 |
The total intrinsic value of options exercised was as follows:
| Years Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Total intrinsic value of options exercised | $ | — |  |  | $ | — |  |  | $ | 29.2 |
Employee Stock Purchase Plan The Company also has an Employee Stock Purchase Plan that was initially approved by stockholders in 2012 and was amended and approved by the Board of Directors of the Company on September 23, 2021 and the stockholders on June 2, 2022 (the “Amended and Restated 2012 Purchase Plan”), under which 4.0 million shares of common stock were authorized. Shares are issued under the Amended and Restated 2012 Purchase Plan twice yearly at the end of each offering period and the number of shares that may be purchased by any participant during an offering period is limited to 5,000 shares. The first offering period of 2023 started on December 1, 2022 and ended on May 31, 2023. The second offering period of 2023 began on June 1, 2023 and ended on November 30, 2023. As of December 31, 2023, 1.3 million shares of common stock were available for issuance under the Amended and Restated Purchase Plan. Shares purchased under, and compensation expense associated with, the Amended and Restated 2012 Purchase Plan for the periods reported are as follows:
| Years Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Shares purchased under the plans | 0.4 |  |  | 0.3 |  |  | 0.2 |
Plan compensation expense | $ | 2.2 |  |  | $ | 1.9 |  |  | $ | 1.5 |
The fair value of shares issued under the Amended and Restated 2012 Purchase Plan that was in effect for each period reported was calculated using the Black‑Scholes option-pricing model using the weighted-average assumptions below. Each of these inputs is subjective and its determination generally requires significant judgment.
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Risk-free interest rate | 5.1% |  | 1.4% |  | 0.1%
Expected dividend yield | —% |  | —% |  | —%
Expected life (in years) | 0.5 |  | 0.5 |  | 0.5
Expected volatility | 56% |  | 53% |  | 60%

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