XML 120 R20.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Employee Benefits and Share-Based Compensation
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Employee Benefits and Share-Based Compensation Employee Benefits and Share-Based Compensation
Stock Purchase Plan
1997 Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan (“ESPP”), under which employees can purchase shares of its common stock based on a percentage of their compensation, but not greater than 15% of their earnings; provided, however, an eligible employee’s right to purchase shares of the Company’s common stock may not accrue at a rate which exceeds $25,000 of the fair market value of such shares for each calendar year in which such rights are outstanding. The purchase price per share must be equal to the lower of 85% of the fair value of the common stock at the beginning of a 24-month offering period or the end of each six-month purchasing period.
There was a total of 1.5 million shares reserved for future issuance under the ESPP as of December 31, 2019.
Stock Award Plans
2009 Equity Incentive Plan
The 2009 Equity Incentive Plan (“2009 Plan”), as amended, provides for the issuance of incentive stock options, RSAs, RSUs, PSUs, and other stock awards to the Company’s employees, directors, and consultants. There were 7.5 million shares of common stock reserved for future issuance under the 2009 Plan as of December 31, 2019.
Options granted under the 2009 Plan generally become exercisable over periods of up to four years, with one-fourth of the shares vesting one year from the vesting commencement date with respect to initial grants, and the remaining shares vesting in 36 equal monthly installments thereafter. The exercise prices of the options is the fair market value of common stock on the date of grant. RSUs generally vest over periods of up to four years, with one-fourth of the shares vesting one year from the vesting commencement date with respect to initial grants, and the remaining shares vesting in 12 equal quarterly installments thereafter. Awards of restricted stock to non-employee directors are granted on the date of the annual meeting of stockholders and vest in full on the date of the next annual meeting of stockholders, provided such non-employee director remains a director on such date. The fair value of the awards on the date of issuance is amortized to expense from the date of grant to the date of vesting and are expensed ratably on a straight-line basis over the vesting period. PSUs granted to the Company’s executives might include performance and market conditions. PSUs become eligible for vesting when certain market or performance conditions are met.
Share-Based Compensation Expense
The following table sets forth the total share-based compensation expense recognized in the Company’s Consolidated Statements of Operations:
Year Ended December 31,
201920182017
(In thousands)
Cost of product and service revenues$5,648  $4,634  $3,478  
Research and development6,604  5,746  3,590  
Selling, general, and administrative21,797  18,505  14,789  
Total share-based compensation expense$34,049  $28,885  $21,857  
The Company did not capitalize any share-based compensation as inventory as such amounts were not material for the years ended December 31, 2019 and December 31, 2018. Income tax benefits realized from share-based compensation were $11.0 million, $6.5 million, and $8.2 million, for the years ended December 31, 2019, 2018, and 2017, respectively.
In the first quarter of 2019, the Company modified the terms of its stock options by extending the post-employment exercise period for certain employees. The Company recorded share-based compensation expense related to this modification of approximately $0.2 million on the stock options modification date. As of December 31, 2019, share-based compensation expense related to unvested stock options impacted by the modification was approximately $0.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.9 years.
Stock Options and ESPP Shares
The following assumptions were used to value stock options and ESPP shares granted pursuant to the Company’s equity incentive plans for the years ended December 31, 2019, 2018, and 2017:
Year Ended December 31,
201920182017
Stock options
Expected life, years4.44.84.7
Expected volatility, %33.7 %31.1 %29.6 %
Risk-free interest rate, %2.0 %2.8 %1.9 %
Estimated forfeiture rate, %7.2 %6.9 %7.7 %
Dividend yield, %— %— %— %

Year Ended December 31,
201920182017
Employee stock purchase plan shares
Expected life, years
0.5 - 2.0
0.5 - 2.0
0.5 - 2.0
Expected volatility, %
28.2% - 39.9%
28.1% - 33.8%
25.8% - 32.8%
Risk-free interest rate, %
1.3% - 2.7%
0.8% - 2.7%
0.5% - 1.4%
Dividend yield, %— %— %— %
Stock Options Activity
The following table summarizes the share option activity under the Company’s 2009 Plan during the year ended December 31, 2019:
Number of
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining Years
Aggregate
Intrinsic Value
(In thousands, except per share data)
Outstanding at December 31, 20183,748  $41.27  7.6$78,365  
Granted1,169  76.44  
Exercised(744) 33.83  
Expired(10) 37.79  
Forfeited(261) 48.57  
Outstanding at December 31, 20193,902  $52.75  7.7$113,198  
Exercisable at December 31, 20191,580  $36.48  6.2$71,485  
Vested and expected to vest at December 31, 2019 and thereafter3,677  $51.83  7.7$110,048  
The weighted-average fair value per share of options granted during the years ended December 31, 2019, 2018, and 2017 was $23.54, $17.22, and $13.25, respectively. The intrinsic value of options exercised during the years ended December 31, 2019, 2018, and 2017 was $32.8 million, $20.1 million, and $18.2 million, respectively.
As of December 31, 2019, total unrecognized compensation cost related to unvested stock options was $39.5 million, which is expected to be recognized over a weighted-average vesting period of 2.8 years.
Employee Stock Purchase Plan Activity
For the year ended December 31, 2019, employees purchased approximately 374,000 shares of common stock under the ESPP at a weighted-average price of $41.44. As of December 31, 2019, the unrecognized compensation cost related to the shares to be purchased under the ESPP was approximately $1.6 million and is expected to be recognized over a weighted-average period of 1.3 years.
Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs)
Summaries of the restricted stock activity under the 2009 Plan are presented below for the year ended December 31, 2019:
Number of
Shares
Weighted-Average
Grant Date Fair Value
Weighted-Average
Remaining Years
Aggregate
Intrinsic Value
(In thousands, except per share data)
Restricted stock units
Outstanding at December 31, 2018538  $51.52  1.6$32,935  
Granted (Awarded)277  78.49  
Vested (Released)(216) 48.88  
Forfeited(55) 48.40  
Outstanding and unvested at December 31, 2019544  $66.65  1.6$44,492  
The weighted-average grant date fair value per share of RSUs granted during the years ended December 31, 2019, 2018, and 2017 was $78.49, $59.52, and $45.97, respectively. The total fair value of RSUs that vested in the years ended December 31, 2019, 2018, and 2017 was $10.6 million, $7.9 million, and $6.5 million, respectively.
As of December 31, 2019, total unrecognized compensation cost related to RSUs was $31.5 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.0 years.
Number of
Shares
Weighted-Average
Grant Date Fair Value
(In thousands, except per share data)
Restricted stock awards
Outstanding at December 31, 201821  $46.60  
Granted (Awarded)17  81.86  
Vested (Released)(21) 46.96  
Outstanding and unvested at December 31, 201917  $81.92  
The weighted-average grant date fair value per share of RSAs granted during the years ended December 31, 2019, 2018, and 2017 was $81.86, $46.60, and $41.10, respectively. The total fair value of RSAs that vested in the years ended December 31, 2019, 2018, and 2017 was $1.0 million, for each period.
As of December 31, 2019, total unrecognized compensation cost related to RSAs was $0.5 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.4 years.
Performance-Based Restricted Stock Units (PSUs)
In 2018, the Company granted 110,432 PSUs to its executive officers, all of which became eligible for vesting upon the achievement of a certain level of shareholder return. In 2019, the Company granted 61,098 PSUs to its executive officers, all, none, or a portion of which may become eligible for vesting depending on the level of shareholder return for the period from March 1, 2019 through March 1, 2020.
The fair value of a PSU award is determined using a Monte Carlo simulation model. The number of shares that vest at the end of the performance period depends on the percentile ranking of the total shareholder return for Omnicell stock over the performance period relative to the total shareholder return of each of the other companies in the NASDAQ Healthcare Index (the “Index”).
For PSUs granted on February 13, 2019, stock price appreciation is calculated based on the trailing 20-day average stock price just prior to the first trading day of March 2019, compared to the trailing 20-day average stock price just prior to the first trading day of March 2020. For PSUs granted on February 6, 2018, stock price appreciation is calculated based on the trailing 20-day average stock price just prior to the first trading day of March 2018, compared to the trailing 20-day average stock price just prior to the first trading day of March 2019.
On March 6, 2018, the Compensation Committee confirmed the Company's total stockholder return at the 60th percentile rank of the Index. This resulted in 100% of the 2017 PSUs, or 147,830 shares, as eligible for further time-based vesting. The eligible PSUs will vest as follows: 25% of the shares vested immediately on March 6, 2018 with the remaining shares vesting on a semi-annual basis period of 36 months commencing on June 15, 2018. Vesting is contingent upon continued service. Of the 147,830 shares eligible for time-based vesting under the 2017 PSUs, 81,322 shares, net of forfeitures, have vested as of December 31, 2019.
On March 5, 2019, the Compensation Committee confirmed the Company's total stockholder return at the 90th percentile rank of the Index. This resulted in 100% of the 2018 PSUs, or 110,432 shares, as eligible for further time-based vesting. The eligible PSUs will vest as follows: 25% of the shares vested immediately on March 5, 2019 with the remaining shares vesting on a semi-annual basis period of 36 months commencing on June 15, 2019. Vesting is contingent upon continued service. Of the 110,432 shares eligible for time-based vesting under the 2018 PSUs, 46,376 shares, net of forfeitures, have vested as of December 31, 2019.
A summary of the performance-based restricted stock activity under the 2009 Plan is presented below for the year ended December 31, 2019:
Number of
Shares
Weighted-Average
Grant Date Fair Value Per Unit
(In thousands, except per share data)
Outstanding at December 31, 2018197  $34.83  
Granted71  73.38  
Vested(101) 34.37  
Forfeited(33) 33.84  
Outstanding and unvested at December 31, 2019134  $55.82  
The weighted-average grant date fair value per share of PSUs granted during the years ended December 31, 2019, 2018, and 2017 was $73.38, $38.03, and $34.05, respectively. The total fair value of PSUs that vested in the years ended December 31, 2019, 2018, and 2017 was $3.5 million, $3.2 million, and $2.6 million, respectively.
As of December 31, 2019, total unrecognized compensation cost related to PSUs was approximately $3.1 million, which is expected to be recognized over the remaining weighted-average period of 1.3 years.
Summary of Shares Reserved for Future Issuance under Equity Incentive Plans
The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of December 31, 2019:
Number of Shares
(In thousands)
Share options outstanding3,902  
Non-vested restricted stock awards696  
Shares authorized for future issuance2,873  
ESPP shares available for future issuance1,539  
Total shares reserved for future issuance  9,010  
401(k) Plan
The Company has established a pre-tax savings plan under Section 401(k) of the Internal Revenue Code. The 401(k) Plan allows eligible employees in the United States to voluntarily contribute a portion of their pre-tax salary, subject to a maximum limit specified in the Internal Revenue Code. The Company matches 50% of employee contributions up to $3,000, annually. The Company’s contributions under this plan were $5.1 million, $4.6 million, and $3.8 million in the years ended December 31, 2019, 2018, and 2017, respectively.