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Stockholders' Equity
12 Months Ended
Dec. 31, 2021
Stockholders Equity Note [Abstract]  
Stockholders' Equity

Note 12 — Stockholders’ Equity

Incentive Plan

The Amended and Restated Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, restricted stock, unrestricted share grants, RSUs and PSUs. Options under the Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Plan). Grants of restricted stock outstanding under the Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Plan generally vest based on service, performance, or a combination of both. On July 30, 2020, stockholders approved a proposal to increase the number of shares under the Plan by 2,650,000 shares, for a total of 18,035,000 shares. As of December 31, 2021, there were 3,020,430 shares available for grant under the Plan.

Stock-Based Compensation

The Company recognized a net income tax benefit in the Consolidated Statements of Income for stock-based compensation expense for incentive stock options and non-qualified stock options, as a result of disqualifying dispositions and exercises, respectively.  The Company does not recognize deferred income taxes for incentive stock option compensation expense, and records a tax deduction only when a disqualified disposition has occurred (see Note 10).

The following table represents the fair value of stock-based compensation granted during the year ended 2021 (in thousands):

 

 

 

Fair Value

 

Stock options

 

$

12,309

 

RSUs

 

 

6,661

 

Restricted stock

 

 

466

 

Total stock-based compensation expense

 

$

19,436

 

 

The Company recorded stock-based compensation expense by award as follows (in thousands):

 

 

 

Years Ended

 

 

 

2021

 

 

2020

 

 

2019

 

Employee stock option

 

$

10,373

 

 

$

9,577

 

 

$

8,144

 

Restricted stock

 

 

616

 

 

 

428

 

 

 

320

 

RSUs

 

 

2,667

 

 

 

1,732

 

 

 

1,905

 

PSUs

 

 

371

 

 

 

147

 

 

 

 

Nonemployee stock options

 

 

578

 

 

 

262

 

 

 

178

 

Total stock-based compensation expense

 

$

14,605

 

 

$

12,146

 

 

$

10,547

 

The Company recorded stock-based compensation expense in the following categories (in thousands):

 

 

 

Years Ended

 

 

 

2021

 

 

2020

 

 

2019

 

Cost of sales

 

$

215

 

 

$

112

 

 

$

52

 

General and administrative

 

 

6,495

 

 

 

4,925

 

 

 

4,010

 

Selling and marketing

 

 

3,454

 

 

 

3,471

 

 

 

3,318

 

Research and development

 

 

4,441

 

 

 

3,638

 

 

 

3,167

 

Total stock-based compensation expense, net

 

 

14,605

 

 

 

12,146

 

 

 

10,547

 

Amounts capitalized as part of inventory

 

 

1,295

 

 

 

1,129

 

 

 

1,017

 

Total stock-based compensation expense, gross

 

$

15,900

 

 

$

13,275

 

 

$

11,564

 

 

 

Note 12 — Stockholders’ Equity (Continued)

Stock-Based Compensation (Continued)

As of December 31, 2021, total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plan were as follows (in thousands):

 

 

 

2021

 

Stock options

 

$

12,682

 

Restricted stock, RSUs and PSUs

 

 

6,981

 

Total unrecognized stock-based compensation cost

 

$

19,663

 

 

This cost is expected to be recognized over a weighted-average period of approximately one and a half years.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations, and represents the period of time that options granted are expected to be outstanding. The Company has calculated a 6% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.  

 

 

 

Years Ended

 

 

 

2021

 

 

2020

 

 

2019

 

Expected dividend yield

 

 

0

%

 

 

0

%

 

 

0

%

Expected volatility

 

 

53

%

 

 

53

%

 

 

53

%

Risk-free interest rate

 

 

0.84

%

 

 

0.53

%

 

 

2.40

%

Expected term (in years)

 

 

5.38

 

 

 

5.72

 

 

 

5.66

 

 

Stock Options

A summary of option activity under the Plan for the year ended December 31, 2021 was as follows:

 

 

 

Shares

(in 000’s)

 

 

Weighted-

Average

Exercise

Price

 

 

Weighted-

Average

Remaining

Contractual

Term (years)

 

 

Aggregate

Intrinsic

Value

(in 000’s)

 

Outstanding at January 1, 2021

 

 

3,418

 

 

$

19.80

 

 

 

 

 

 

 

 

 

Granted

 

 

273

 

 

 

95.32

 

 

 

 

 

 

 

 

 

Exercised

 

 

(1,206

)

 

 

16.12

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(50

)

 

 

33.77

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2021

 

 

2,435

 

 

$

29.81

 

 

 

6.34

 

 

$

151,033

 

Exercisable at December 31, 2021

 

 

1,863

 

 

$

20.54

 

 

 

5.75

 

 

$

131,837

 

 

 

Note 12 — Stockholders’ Equity (Continued)

Stock Options (Continued)

A summary of unvested options activity under the Plan for the year ended December 31, 2021 was as follows:

 

 

 

Shares

(in 000’s)

 

 

Weighted-Average

Grant-Date

Fair Value

 

Unvested at January 1, 2021

 

 

1,046

 

 

$

15.09

 

Granted

 

 

273

 

 

 

45.08

 

Forfeited or expired

 

 

(50

)

 

 

7.89

 

Vested

 

 

(697

)

 

 

15.74

 

Unvested at December 31, 2021

 

 

572

 

 

$

28.63

 

The weighted average grant date fair value of options granted and the total intrinsic value of options exercised were as follows:

 

 

 

Years Ended

 

 

 

2021

 

 

2020

 

 

2019

 

Weighted-average grant-date fair value

 

$

45.08

 

 

$

13.85

 

 

$

17.95

 

Intrinsic value of options (in thousands)

 

$

127,024

 

 

$

59,771

 

 

$

9,955

 

 

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSU and PSU activity under the Plan for the year ended December 31, 2021 was as follows:

 

 

 

Restricted Stock

 

 

Restricted Stock Units

 

 

Performance Stock Units

 

 

 

Units

(in 000’s)

 

 

Weighted-

Average Grant-

Date Fair Value

 

 

Units

(in 000’s)

 

 

Weighted-

Average Grant-

Date Fair Value

 

 

Units

(in 000’s)

 

 

Weighted-

Average Grant-

Date Fair Value

 

Outstanding at January 1, 2021

 

 

11

 

 

$

59.06

 

 

 

122

 

 

$

32.97

 

 

 

15

 

 

$

51.42

 

Granted

 

 

3

 

 

 

148.36

 

 

 

63

 

 

 

105.62

 

 

 

 

 

 

 

Vested

 

 

(11

)

 

 

59.95

 

 

 

(54

)

 

 

35.34

 

 

 

(5

)

 

 

51.42

 

Outstanding at December 31, 2021

 

 

3

 

 

$

154.96

 

 

 

131

 

 

$

66.94

 

 

 

10

 

 

$

51.42