CAPITAL STOCK AND SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

CAPITAL SOCK AND SHARE-BASED COMPENSATION

CAPITAL STOCK AND SHARE-BASED COMPENSATION

We are authorized by our Certificate of Incorporation to issue 60,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value. As of December 31, 2019, there were 36,638,021 and 32,284,051 shares of common stock issued and outstanding, respectively, and no shares of preferred stock issued or outstanding. Our Board of Directors is authorized to fix the dividend rights and terms, conversion and voting rights, redemption rights and other privileges and restrictions applicable to our preferred stock.

Share-Based Awards

On March 29, 2018, our Board of Directors and the Compensation Committee approved, subject to stockholder approval, the Amedisys, Inc. 2018 Omnibus Incentive Compensation Plan (the “2018 Plan”). On June 6, 2018, our stockholders approved the 2018 Plan at the Company's annual meeting of stockholders. The 2018 Plan replaces our 2008 Omnibus Incentive Compensation Plan (the “2008 Plan”), which terminated on June 6, 2018 when the stockholders approved the 2018 Plan. The 2018 Plan authorizes the grant of various types of equity-based awards, such as stock awards, restricted stock units, stock appreciation rights and stock options to eligible participants, which include all of our employees and all employees of our 50% or more owned subsidiaries, our non-employee directors and certain consultants. The vesting terms of the awards may be tied to continued employment (or, for our non-employee directors, continued service on the Board of Directors) and/or achievement of certain pre-determined performance goals. We refer to stock awards subject to service-based vesting conditions as “non-vested stock” and restricted stock units subject to service-based or a combination of service-based and performance-based vesting conditions as “non-vested stock units.” The 2018 Plan is administered by the Compensation Committee of our Board of Directors, which determines, within the provisions of the 2018 Plan, those eligible participants to whom, and the times at which, awards shall be granted. The Compensation Committee, in its discretion, may delegate its authority and duties under the 2018 Plan to specified officers; however, only the Compensation Committee may approve the terms of awards to our executive officers.

Equity-based awards may be granted for a number of shares not to exceed, in the aggregate, approximately 2.5 million shares of common stock. We had approximately 2.0 million shares available at December 31, 2019. The price per share for stock options shall be no less than the greater of (a) 100% of the fair value of a share of common stock on the date the option is granted or (b) the aggregate par value of the shares of our common stock on the date the option is granted. If a stock option is granted to any owner of 10% or more of the total combined voting power of us and our subsidiaries, the price is to be at least 110% of the fair value of a share of our common stock on the date the award is granted. Each equity-based award vests ratably over a 12 month to four year period, with the exception of those issued under contractual arrangements that specify otherwise, and may be exercised during a period as determined by our Compensation Committee or as otherwise approved by our Compensation Committee. The contractual terms of stock options exercised shall not exceed ten years from the date such option is granted. The Company analyzes historical data of forfeited awards to develop an estimated forfeiture rate that is applied to the Company's non-cash compensation expense; however, all non-cash compensation expense is adjusted to reflect actual vestings and forfeitures.

Employee Stock Purchase Plan (“ESPP”)

We have a plan whereby our eligible employees may purchase our common stock at 85% of the market price at the time of purchase. On June 7, 2012, our stockholders ratified an amendment adopted by our Board of Directors to increase the total number of shares of our common stock authorized for issuance under our ESPP from 2,500,000 shares to 4,500,000 shares, and as of December 31, 2019, there were 1,348,327 shares available for future issuance. The following is a detail of the purchases that were made under the plan:

Employee Stock Purchase Plan Period	Shares Issued	Price
2017 and Prior	3,089,489	$	15.25
January 1, 2018 to March 31, 2018	10,913	51.29
April 1, 2018 to June 30, 2018	8,673	72.64
July 1, 2018 to September 30, 2018	6,052	106.22
October 1, 2018 to December 31, 2018	7,856	99.54
January 1, 2019 to March 31, 2019	7,181	104.77
April 1, 2019 to June 30, 2019	8,230	103.20
July 1, 2019 to September 30, 2019	7,216	111.36
October 1, 2019 to December 31, 2019	6,063	141.88
	3,151,673

ESPP expense included in general and administrative expense in our accompanying consolidated statements of operations was $0.6 million, $0.5 million and $0.4 million for each of 2019, 2018 and 2017, respectively.

Stock Options

We use the Black-Scholes option pricing model to estimate the fair value of our stock options. There were 142,122, 163,666 and 308,292 options granted during 2019, 2018 and 2017, respectively. Stock option compensation expense included in general and administrative expense in our accompanying consolidated statements of operations was $6.2 million, $5.7 million and $5.6 million for 2019, 2018 and 2017, respectively.

The fair values of the awards were estimated using the following assumptions for each 2019, 2018 and 2017:

	For the Years Ended December 31,
	2019	2018	2017
Risk Free Rate	1.44% - 2.53%	2.56% - 3.04%	1.99% - 2.16%
Expected Volatility	42.46% - 43.83%	42.00% - 45.32%	50.18% - 51.81%
Expected Term	6.00 - 6.25 years	4.12 - 6.25 years	5.78 - 6.25 years
Weighted Average Fair Value	$54.42	$42.48	$28.02
Dividend Yield	—%	—%	—%

We used the simplified method to estimate the expected term for the stock options granted during 2019, 2018 and 2017 as adequate historical experience is not available to provide a reasonable estimate.

The following table presents our stock option activity for 2019:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (Years)
Outstanding options at January 1, 2019	833,315		$	36.79	6.76
Granted	142,122		121.32
Exercised	(87,068	)	41.48
Canceled, forfeited or expired	(12,395	)	66.18
Outstanding options at December 31, 2019	875,974		$	49.62	6.26
Exercisable options at December 31, 2019	570,224		$	29.73	5.31

The aggregate intrinsic value of our outstanding options and exercisable options at December 31, 2019 was $102.7 million and $78.2 million, respectively. Total intrinsic value of options exercised was $7.3 million, $9.7 million and $3.9 million for 2019, 2018 and 2017, respectively. The tax benefit from stock options exercised during the period amounted to $1.3 million, $1.6 million and $0.3 million for 2019, 2018 and 2017, respectively.

The following table presents our non-vested stock option activity for 2019:

	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested stock options at January 1, 2019	370,470		$	30.97
Granted	142,122		54.42
Vested	(194,638	)	31.19
Forfeited	(12,204	)	32.84
Non-vested stock options at December 31, 2019	305,750		$	41.66

At December 31, 2019, there was $6.1 million of unrecognized compensation cost related to stock options that we expect to be recognized over a weighted-average period of 1.8 years.

Non-Vested Stock

We issue shares of non-vested stock with a vesting term of one year. The compensation expense is determined based on the market price of our common stock at the date of grant applied to the total number of shares that are anticipated to fully vest. Non-vested stock compensation expense included in general and administrative expenses in our accompanying consolidated statements of operations was $1.2 million, $1.4 million and $1.7 million for 2019, 2018 and 2017, respectively.

The following table presents our non-vested stock activity for 2019:

	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested stock at January 1, 2019	14,904		$	80.54
Granted	9,859		119.12
Vested	(14,904	)	80.54
Canceled, forfeited or expired	—		—
Non-vested stock at December 31, 2019	9,859		$	119.12

The weighted average grant date fair value of non-vested stock granted was $119.12, $80.54 and $62.67 in 2019, 2018 and 2017, respectively.

At December 31, 2019, there was $0.8 million of unrecognized compensation cost related to non-vested stock awards that we expect to be recognized over a weighted average period of 0.4 years.

Non-Vested Stock Units

We issue non-vested stock unit awards that are service-based, performance-based or a combination of both with vesting terms ranging from one to four years. Based on the terms and conditions of these awards, we determine if the awards should be recorded as either equity or liability instruments. The compensation expense is determined based on the market price of our common stock at the date of grant, applied to the total number of units that are anticipated to vest, unless the award specifies differently. We account for such awards similar to our non-vested stock awards; however, no shares of stock are issued to the recipient until the stock unit awards have vested and after the pre-determined delivery date has occurred.

Non-Vested Stock Units – Service-Based

Service-based non-vested stock unit compensation expense included in general and administrative expenses in our accompanying consolidated statements of operations was $8.7 million, $4.5 million and $3.6 million for 2019, 2018 and 2017, respectively.

The following table presents our service-based non-vested stock units activity for 2019:

	Number of  Shares		Weighted Average Grant Date Fair Value
Non-vested stock units at January 1, 2019	240,400		$	69.49
Granted	82,605		123.70
Vested	(78,119	)	58.75
Canceled, forfeited or expired	(13,468	)	79.68
Non-vested stock units at December 31, 2019	231,418		$	91.87

The weighted average grant date fair value of service-based non-vested stock units granted was $123.70, $95.14 and $53.79 in 2019, 2018 and 2017, respectively.

At December 31, 2019, there was $11.4 million of unrecognized compensation cost related to our service-based non-vested stock units that we expect to be recognized over a weighted average period of 1.9 years.

Non-Vested Stock Units – Service-Based and Performance-Based Awards

During 2019, we awarded performance-based awards to certain employees. The target level established by the award, which is based on the Company’s 2019 adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), provided for the recipients to receive 102,585 non-vested stock units if the target was achieved. For a select group of employees, if the target objective is surpassed to the point of achieving the projected maximum payout, the recipients will receive an additional 18,327 non-vested stock units during the three-month period ending March 31, 2020. The target number of shares to be potentially awarded has been reduced by forfeitures as indicated in the table below. Performance-based non-vested stock units compensation expense included in general and administrative expenses in our consolidated statements of operations was $8.4 million, $5.8 million and $5.0 million for 2019, 2018 and 2017, respectively.

The following table presents our performance-based non-vested stock units activity for 2019:

	Number of  Shares		Weighted Average Grant Date Fair Value
Non-vested stock units at January 1, 2019	226,677		$	65.76
Granted	102,585		128.89
Vested	(101,156	)	61.12
Canceled, forfeited or expired	(20,682	)	82.72
Non-vested stock units at December 31, 2019	207,424		$	97.55

The weighted average grant date fair value of performance-based non-vested stock units granted was $128.89, $79.59 and $52.99 in 2019, 2018 and 2017, respectively.

At December 31, 2019, there was $13.2 million in unrecognized compensation costs related to our performance-based non-vested stock units that we expect to be recognized over a weighted average period of 2.0 years.