NOTE 17: STOCK CAPITAL

a.	Common stock rights:

Common stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each share of common stock shall have one vote for all purposes; to share equally, on a per share basis, in bonuses, profits, or distributions out of fund legally available therefor; and to participate in the distribution of the surplus assets of the Company in the event of liquidation of the Company.

b.	Equity Incentive Plans:

The Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. The 2007 Plan terminated upon the Company’s IPO on March 31, 2015 and no further awards may be granted thereunder. All outstanding awards will continue to be governed by their existing terms and 379,358 available options for future grant were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 plan. The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, RSUs, PSUs,and other share-based awards to directors, employees, officers and non-employees of the Company and its subsidiaries. As of December 31, 2021, a total of 15,406,316 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”).

The Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan, commencing on January 1st of the year following the year in which the 2015 Plan becomes effective, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year; provided, however, that the Company’s board of directors may determine that there will not be a January 1st increase in the Share Reserve in a given year or that the increase will be less than 5% of the shares of capital stock outstanding on the preceding December 31st.

The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is 10,000,000. As of December 31, 2021, an aggregate of 8,617,974 options are still available for future grant under the 2015 Plan.

The Company has also granted non-plan awards, which have been authorized by the Company's board of directors and granted as PSUs.

A summary of the activity in the stock options granted to employees and members of the board of directors for the year ended December 31, 2021 and related information are as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual term in years		Aggregate intrinsic Value
Outstanding as of December 31, 2020		691,732		$	31.86		5.07	$	198,709
Granted		19,489			311.35
Exercised		(231,008	)		28.02
Forfeited or expired		(10,432	)		44.24
Outstanding as of December 31, 2021		469,781		$	45.07		5.25	$	111,236
Vested and expected to vest as of December 31, 2021		441,238		$	40.48		5.53	$	106,377
Exercisable as of December 31, 2021		373,664		$	29.58		5.16	$	93,897

The aggregate intrinsic value in the tables above represents the total intrinsic value (the difference between the fair value of the Company’s common stock as of the last day of each period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last day of each period.

The total intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $65,668, $251,564, and $37,509, respectively.

The weighted average grant date fair value of options granted to employees and directors during the years ended December 31, 2021, 2020, and 2019, was $168.71, $62.11 and $19.83, respectively.

A summary of the activity in the RSUs and PSUs granted to employees and directors for the year ended December 31, 2021, is as follows:

	Number of RSUs and PSUs			Weighted average grant date fair value
Unvested, at beginning of the period		2,216,841		$	103.79
Granted (1)		703,039			278.03
Vested		(955,125	)		81.76
Forfeited		(125,804	)		136.71
Unvested, at end of the period		1,838,951		$	178.64

The number of PSUs granted to employees was 132,673 with a weighted average grant date fair value of $294.04.

The weighted-average grant-date fair value of RSUs and PSUs granted during the years ended December 31, 2021, 2020 and 2019, was $278.03, $71.46 and $41.45, respectively.

c.	Employee Stock Purchase Plan:

The Company adopted an ESPP effective upon the consummation of the IPO. As of December 31, 2021, total of 3,175,094 shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1% of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares. However, the Company’s board of directors may reduce the amount of the increase in any particular year at their discretion, including a reduction to zero.

The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 15% of their salaries to purchase common stock up to an aggregate limit of $15 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date.

As of December 31, 2021, 661,827 shares of common stock had been purchased under the ESPP.

As of December 31, 2021, 2,513,267 shares of common stock were available for future issuance under the ESPP.

In accordance with ASC No. 718, the ESPP is compensatory and, as such, results in recognition of compensation cost.

d.	Stock-based compensation expenses for employees and non-employees:

The Company recognized stock-based compensation expenses related to stock options, RSUs and PSUs granted to employees and non-employees and the ESPP in the consolidated statement of income for the years ended December 31, 2021, 2020 and 2019, as follows:

	Year ended December 31,
	2021		2020		2019
Cost of revenues	$	18,743	$	11,082	$	6,964
Research and development		45,424		27,048		16,872
Selling and marketing		22,834		19,413		11,062
General and administrative		15,592		9,766		6,991
Other operating expenses		-		-		18,464
Total stock-based compensation expenses	$	102,593	$	67,309	$	60,353

As of December 31, 2021, there were total unrecognized compensation expenses in the amount of $309,177 related to non-vested equity-based compensation arrangements granted under the Company’s Plans and non-plan awards. These expenses are expected to be recognized during the period from January 1, 2022 through May 31, 2026.