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STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
The following table summarizes the components of stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the periods indicated:
Three Months Ended
March 31,
20222021
Cost of revenues (exclusive of depreciation and amortization)$(424)$11,117 
Selling, general and administrative expenses7,536 13,436 
Total$7,112 $24,553 


Stock Options
Stock option activity under the Company’s plans is set forth below:
 Number of
Options 		Weighted Average
Exercise Price 		Aggregate
Intrinsic Value 		Weighted Average
Remaining Contractual Term (in years)
Options outstanding at January 1, 2022
2,318 $77.79 
Options granted105 $272.17 
Options exercised(160)$22.72 
Options outstanding at March 31, 2022
2,263 $90.75 $477,283 3.9
Options vested and exercisable as of March 31, 2022
1,976 $64.10 $461,284 3.2
Options expected to vest as of March 31, 2022
262 $273.03 $14,872 8.9
As of March 31, 2022, $28.5 million of total remaining unrecognized stock-based compensation cost related to unvested stock options, net of estimated forfeitures, is expected to be recognized over the weighted-average remaining requisite service period of 3.1 years.
Restricted Stock and Restricted Stock Units
Service-Based Awards
The table below summarizes activity related to the Company’s equity-classified and liability-classified service-based awards for the three months ended March 31, 2022:
Equity-Classified
 Restricted Stock
Equity-Classified
Equity-Settled
Restricted Stock Units
Liability-Classified
Cash-Settled
Restricted Stock Units
 
Number of
Shares 
Weighted Average Grant Date
Fair Value Per Share 
Number of
Shares 
Weighted Average Grant Date
Fair Value Per Share 
Number of
Shares 
Weighted Average Grant Date
Fair Value Per Share 
Unvested service-based awards outstanding at January 1, 2022
9 $167.18 576 $277.38 112 $217.28 
Awards granted— $— 366 $278.53 42 $266.75 
Awards modified— $— (3)$387.74 3 $220.00 
Awards vested— $— (193)$199.32 (52)$181.18 
Awards forfeited/cancelled— $— (5)$368.35 — $253.51 
Unvested service-based awards outstanding at March 31, 2022
9 $167.18 741 $297.23 105 $254.85 
As of March 31, 2022, $0.2 million of total remaining unrecognized stock-based compensation cost related to service-based equity-classified restricted stock is expected to be recognized over the weighted-average remaining requisite service period of 0.4 years.
As of March 31, 2022, $183.2 million of total remaining unrecognized stock-based compensation cost related to service-based equity-classified restricted stock units (“RSUs”), net of estimated forfeitures, is expected to be recognized over the weighted-average remaining requisite service period of 3.2 years.
As of March 31, 2022, $26.9 million of total remaining unrecognized stock-based compensation cost related to service-based liability-classified cash-settled RSUs, net of estimated forfeitures, is expected to be recognized over the weighted-average remaining requisite service period of 2.8 years.
The liability associated with the service-based liability-classified RSUs as of March 31, 2022 and December 31, 2021, was $11.2 million and $31.5 million, respectively, and was classified as Accrued compensation and benefits expenses in the condensed consolidated balance sheets.
Performance-Based Awards
The table below summarizes activity related to the Company’s equity-classified performance-based awards for the three months ended March 31, 2022:
Equity-Classified
Equity-Settled
Restricted Stock
Equity-Classified
Equity-Settled
Restricted Stock Units
 
Number of
Shares 
Weighted Average Grant Date
Fair Value Per Share 
Number of
Shares 
Weighted Average Grant Date
Fair Value Per Share 
Unvested performance-based awards outstanding at January 1, 2022
9 $165.87 23 $339.69 
Awards granted— $— 1 $556.68 
Unvested performance-based awards outstanding at March 31, 2022
9 $165.87 24 $344.04 
As of March 31, 2022, $0.6 million of total remaining unrecognized stock-based compensation cost related to performance-based equity-classified restricted stock is expected to be recognized over the weighted-average remaining requisite service period of 1.4 years.
As of March 31, 2022, $4.7 million of total remaining unrecognized stock-based compensation cost related to performance-based equity-classified RSUs is expected to be recognized over the weighted-average remaining requisite service period of 3.0 years.
2021 Employee Stock Purchase Plan
On November 1, 2021, the first offering period of the 2021 Employee Stock Purchase Plan ("ESPP") commenced. As of March 31, 2022, no purchases have been made under the ESPP as the first anticipated purchase date will be on April 29, 2022. The Company recognizes compensation expense related to shares issued pursuant to the ESPP on a straight-line basis over the six-month offering period. For the three months ended March 31, 2022, the Company recognized $1.7 million of stock-based compensation expense related to the ESPP. As of March 31, 2022, total unrecognized stock-based compensation cost related to the ESPP was $0.6 million, which is expected to be recognized over a period of 0.08 years.

Commitments for Future Equity Awards
In connection with the Company’s acquisitions of businesses as discussed in Note 3 “Acquisitions,” EPAM enters into agreements that contractually commit it to granting equity awards at future dates. The agreements are unique to each acquisition and terms vary to specify the number of future awards to be issued or a monetary value that will be settled with equity awards valued at future stock prices.
As of March 31, 2022, the Company has commitments to grant up to $43.1 million of equity awards with the number of awards to be determined based on future stock prices. There is a service-based vesting requirement after the grant date associated with these awards and certain of these awards contain performance criteria that will determine the amount of future awards to be issued. These awards are considered granted for accounting purposes. In determining the expense, the Company adjusts the expected settlement based on the probability of achievement of such performance criteria. Related to these awards, the Company recorded $1.1 million and $1.2 million of stock-based compensation expense in the condensed consolidated statements of income for the quarters ended March 31, 2022 and 2021, respectively.
As of March 31, 2022, the Company has commitments to grant 7 thousand RSUs in the future as the grantee has not yet been determined. In addition, as of March 31, 2022, the Company has issued 7 thousand performance-based equity-classified RSUs which are not considered granted for accounting purposes as the future vesting conditions have not yet been determined.
On April 15, 2022, the Company granted stock-based compensation awards to employees including 22 thousand stock options, 198 thousand equity-classified RSUs and 7 thousand liability-classified cash-settled RSUs, vesting over 4 years from the grant date.