In April 2006, the Company adopted the 2006 Long Term Incentive Plan (the “2006 Plan”). The 2006 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”) performance awards and other stock awards, to eligible directors, employees and consultants of the Company. The Company’s 2006 Plan expired on April 13, 2016 by its terms. No further equity awards can be granted under the 2006 Plan. Outstanding awards under the 2006 Stock Plan remain subject to the terms and conditions of the 2006 plan.

In April 2016, the Company’s Board of Directors adopted the 2016 Equity Incentive Plan (the “2016 Plan”) which was approved by the Company’s stockholders at the 2016 Annual Meeting of Stockholders on June 3, 2016. The 2016 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible directors, employees and consultants of the Company. The original maximum aggregate number of shares that could be issued under the 2016 Plan was 2.5 million Shares, plus (i) any shares that were available for grant under the Company’s 2006 Plan as of immediately prior to the 2006 Plan’s expiration by its terms, which was 699,827 shares, plus (ii) any shares granted under the 2006 Plan that expire, are forfeited to or repurchased by the Company. In May 2018, the Company adopted amendments to the 2016 Plan which increased the number of shares of the Company’s common stock that may be issued under the 2016 plan by an additional 1.7 million shares. In January 2019, the Company received the approval from its Compensation Committee to increase the number of shares that the Company may be issued under the 2016 plan to a new total of 3.1 million shares, pursuant to the adjustment provisions of the 2016 Plan. In May 2020, the Company adopted amendments to the 2016 Plan which increased the number of shares of the Company’s common stock that may be issued under the 2016 plan by an additional 2.0 million shares. As of December 31, 2022, approximately 1.0 million shares remained available for future grants under the 2016 Plan.

Options granted generally vest over four years with the first tranche at the end of twelve months from the date of grant and the remaining shares vesting monthly over the remaining three years. Options granted generally expire in 10 years from the date of grant. RSUs granted generally vest in annual installments over four years and do not have an expiration date. Performance shares granted generally vest at the end of a three-year period if performance conditions are met and do not have an expiration date.

Any shares that are tendered by a participant of the 2016 Plan or retained by the Company as full or partial payment to the Company for the purchase of an award or to satisfy tax withholding obligations in connection with an award shall no longer again be made available for issuance under the 2016 Plan.

The Company sponsors an Employee Stock Purchase Plan (the “ESPP”), pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain income limits, to purchase shares of the Company’s

common stock. The terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period and the purchase date. The duration of each offering period is generally six-months. In April 2022, the Company approved an amendment to the plan to increase the number of shares of common stock authorized for sale under the plan by 1.0 million shares to a total of 3.0 million shares. For the years ended December 31, 2022, 2021, and 2020, the Company recognized ESPP compensation expense of $1.3 million, $1.7 million and $1.5 million, respectively. Approximately 196,000 shares of common stock were purchased at an average exercise price of $22.58 in the year ended December 31, 2022. As of December 31, 2022, approximately 1.0 million shares were reserved for future issuance under the ESPP.

Stock option activity was as follows:


(In thousands, except per share amounts)	Number of Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)			(In dollars)		(In years)		(In thousands)
Outstanding as of December 31, 2021		912		$	30.19
Exercised		(37	)	$	20.16
Expired		(3	)	$	20.57
Outstanding as of December 31, 2022		872		$	30.64		5.37	$	—

As of December 31, 2022
Vested and expected to vest		872		$	30.64		5.37	$	—
Exercisable Options		804		$	30.98		5.27	$	—

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of 2022, or December 30, 2022, and the exercise price, multiplied by the number of shares underlying the in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2022. This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the years ended December 31, 2022, 2021, and 2020 was $0.2 million, $6.7 million and $7.3 million, respectively.

The total fair value of options vested during the years ended December 31, 2022, 2021, and 2020 was $1.3 million, $2.3 million and $3.2 million, respectively.

The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2022:


	Options Outstanding						Options Exercisable
Range of Exercise Prices	Shares Outstanding		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price Per Share		Shares Exercisable		Weighted- Average Exercise Price Per Share
	(In thousands)		(In years)		(In dollars)		(In thousands)		(In dollars)
$18.58 - $25.37		224		3.74	$	24.01		224	$	24.01
$26.61 - $26.61		370		6.55	$	26.61		302	$	26.61
$38.32 - $41.67		278		5.12	$	41.37		278	$	41.37
$18.58 - $41.67		872		5.37	$	30.64		804	$	30.98

RSU activity was as follows:


(In thousands, except per share amounts)	Number of Shares			Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term		Average Intrinsic Value
Outstanding as of December 31, 2021		1,555		$	33.86
Granted		815		$	22.19
Vested		(624	)	$	34.55
Cancelled		(200	)	$	30.87
Outstanding as of December 31, 2022		1,546		$	27.82		1.39	$	27,998

The total fair value of RSUs vested during the years ended December 31, 2022, 2021 and 2020 was $14.6 million, $24.3 million and $16.1 million, respectively. The grant date fair value of RSUs vested during the years ended December 31, 2022, 2021 and 2020 was $21.5 million, $20.4 million and $20.4 million, respectively.

In July 2020, July 2021 and April 2022, the Company’s executive officers were granted performance shares with vesting occurring at the end of a three-year period if performance conditions are met. The number of performance shares earned and eligible to vest are determined based on achievement of the pre-determined performance conditions and the recipients’ continued service with the Company. The number of performance shares to vest could range from 0% to 150% of the target shares granted. At the end of each reporting period, the Company evaluates the probability of achieving the performance conditions and records the related stock-based compensation expense based on performance to date over the service period.

Performance shares were never granted in the years prior to 2020. Performance shares activity was as follows:


(In thousands, except per share amounts)	Number of Shares			Weighted Average Grant Date Fair Value Per Share
	(In thousands)
Outstanding as of December 31, 2019		—			—
Granted		141		$	28.22
Vested		—			—
Cancelled		—			—
Outstanding as of December 31, 2020		141		$	28.22
Granted		152		$	37.58
Vested		—			—
Cancelled		—			—
Outstanding as of December 31, 2021		293		$	33.07
Granted		145			22.37
Vested		—			—
Cancelled		(8	)		27.17
Outstanding as of December 31, 2022		430		$	29.38

The Company measures stock-based compensation at the grant date based on the estimated fair value of the award. Estimated compensation cost relating to RSUs and performance shares is based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of options granted and the purchase rights granted under the ESPP is estimated on the date of grant using a Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. The estimated expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free interest rate of options granted and the purchase rights granted under the ESPP is based on the implied yield currently available on U.S. Treasury securities with a remaining term commensurate with the estimated expected term. Expected volatility of options granted under the 2016 Plan and the purchase rights granted under the ESPP is based on historical volatility

over the most recent period commensurate with the estimated expected term. The Company has never declared or paid cash dividends on its capital stock and does not anticipate paying cash dividends in the foreseeable future.

No stock options were granted during the years ended December 31, 2022, 2021 and 2020. The following table sets forth the weighted-average assumptions used to estimate the fair value of purchase rights granted under the ESPP:


	Year Ended December 31,
	2022			2021			2020

Expected life (in years)		0.5			0.5			0.5
Risk-free interest rate		2.25	%		0.05	%		0.72	%
Expected volatility		39.6	%		40.8	%		54.8	%
Dividend yield		—			—			—

The following table sets forth the stock-based compensation expense resulting from stock options, RSUs, performance shares and the ESPP included in the Company’s consolidated statements of operations:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Cost of revenue	$	1,353	$	2,103	$	4,091
Research and development		4,177		5,161		5,183
Sales and marketing		5,603		7,628		7,634
General and administrative		6,601		11,103		13,597
Total	$	17,734	$	25,995	$	30,505

Total stock-based compensation cost capitalized in inventory was less than $0.9 million as of each of the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, $0.3 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 0.6 years and $33.0 million of unrecognized compensation cost related to unvested RSUs and performance shares is expected to be recognized over a weighted-average period of 2.2 years. If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel all or a portion of the remaining unearned stock-based compensation expense.