STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

The Company maintains the 2010 Omnibus Long-Term Incentive Plan (As Amended and Restated Effective July 27, 2017), the 2019 Omnibus Long-Term Incentive Plan, the 2010 Employee Stock Purchase Plan, and the 2016 Inducement Award Plan (collectively, the “Stock Plans”).

Stock-Based Compensation Expense

The Company records stock-based compensation expense in connection with the amortization of restricted stock and restricted stock unit awards (“RSUs”), stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non-employee consultants and non-employee directors. The Company recorded $56.3 million and $40.0 million in stock-based compensation expense during the three months ended June 30, 2021 and 2020, respectively. The Company recorded $219.7 million and $69.6 million in stock-based compensation expense during the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, there was $433.2 million of expected total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans. The Company expects to recognize that cost over a weighted average period of 2.9 years.

In connection with the acquisition of Thrive, the Company accelerated the vesting of shares of previously unvested stock options and restricted stock units for employees with qualifying termination events. During the three months ended June 30, 2021, the Company accelerated 4,982 shares of previously unvested stock options and 5,827 shares of previously unvested restricted stock awards and restricted stock units and recorded $1.0 million of non-cash stock-based compensation for the accelerated awards. During the six months ended June 30, 2021, the Company accelerated 103,996 shares of previously unvested stock options and 33,306 shares of previously unvested restricted stock awards and restricted stock units and recorded $14.5 million of non-cash stock-based compensation for the accelerated awards. As further discussed in Note 17, the Company also recorded $86.2 million in stock-based compensation related to accelerated vesting of awards held by Thrive employees in connection with the acquisition.

Stock Options

The Company determines the fair value of each service-based option award on the date of grant using the Black-Scholes option-pricing model, which utilizes several key assumptions which are disclosed in the following table:


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Option Plan Shares
Risk-free interest rates	(1)	(1)	(1)	0.98% - 1.47%
Expected term (in years)	(1)	(1)	(1)	4.68 - 6.15
Expected volatility	(1)	(1)	(1)	65.67% - 77.51%
Dividend yield	(1)	(1)	(1)	—%

______________

(1)The Company did not grant stock options under its 2010 Omnibus Long-Term Incentive Plan or 2019 Omnibus Long-Term Incentive Plan during the period.

A summary of stock option activity under the Stock Plans is as follows:


Options	Shares	Weighted Average Exercise Price (1)		Weighted Average Remaining Contractual Term(Years)	Aggregate Intrinsic Value(2)
(Aggregate intrinsic value in thousands)
Outstanding, January 1, 2021	2,231,059	$	39.67	6.0
Granted	—	—
Assumed through acquisition	1,393,748	5.51
Exercised	(1,107,613)	10.51
Forfeited	(31,234)	64.77
Outstanding, June 30, 2021	2,485,960	$	33.20	6.2	$	226,506
Vested and expected to vest, June 30, 2021	2,485,960	$	33.20	6.2	$	226,506
Exercisable, June 30, 2021	1,825,975	$	25.29	5.5	$	180,809

______________

(1)The weighted average grant date fair value of options granted during the three and six months ended June 30, 2020 was $58.77.

(2)The total intrinsic value of options exercised during the six months ended June 30, 2021 and 2020 was $140.2 million and $20.4 million, respectively, determined as of the date of exercise.

The Company received approximately $11.6 million and $10.9 million from stock option exercises during the six months ended June 30, 2021 and 2020, respectively.

Restricted Stock and Restricted Stock Units

The fair value of restricted stock and restricted stock units is determined on the date of grant using the closing stock price on that day.

A summary of restricted stock and restricted stock unit activity during the six months ended June 30, 2021 is as follows:


Restricted stock and restricted stock units	Shares	Weighted Average Grant Date Fair Value (2)
Outstanding, January 1, 2021	3,968,214	$	79.46
Granted	1,680,182	140.63
Assumed through acquisition	242,123	127.79
Released (1)	(1,308,929)	71.15
Forfeited	(247,183)	95.88
Outstanding, June 30, 2021	4,334,407	$	107.44

______________

(1)The fair value of restricted stock units vested and converted to shares of the Company’s common stock was $93.1 million and $63.5 million during the six months ended June 30, 2021 and 2020, respectively.

(2)The weighted average grant date fair value of the restricted stock units granted during the six months ended June 30, 2020 was $92.29.

Performance Share Units

The Company has issued performance-based equity awards to certain employees which vest upon the achievement of certain performance goals, including financial performance targets and operational milestones.

In February 2021, the Company issued additional performance-based equity awards to certain employees which vest upon the achievement of certain performance goals, including financial performance targets and operational milestones.

A summary of performance share-based compensation arrangements granted under all equity compensation unit activity is as follows:


Performance share units	Shares (1)	Weighted Average Grant Date Fair Value (2)
Outstanding, January 1, 2021	618,515	$	93.22
Granted	253,120	140.96
Released	—	—
Forfeited	(4,150)	147.81
Outstanding, June 30, 2021	867,485	$	106.89

______________

(1)The performance share units listed above assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding performance share units as of June 30, 2021 was 174,904.

(2)The weighted average grant date fair value of the performance share units granted during the six months ended June 30, 2020 was $90.17.

Employee Stock Purchase Plan (“ESPP”)

The fair value of ESPP shares is based on the assumptions in the following table:


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
ESPP Shares
Risk-free interest rates	0.04% - 0.16%	0.12% - 0.20%	0.04% - 0.16%	0.12% - 0.20%
Expected term (in years)	0.5 - 2	0.5 - 2	0.5 - 2	0.5 - 2
Expected volatility	48.38% - 68.51%	63.67% - 89.04%	48.38% - 68.51%	63.67% - 89.04%
Dividend yield	—%	—%	—%	—%