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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2020
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and nine months ended September 30, 2020 and 2019 was as follows (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Cost of sales | $ | 4.3 |  |  | $ | 3.6 |  |  | $ | 13.6 |  |  | $ | 11.5 |
Selling, general, and administrative expenses | 13.8 |  |  | 12.4 |  |  | 43.5 |  |  | 39.4 |
Research and development expenses | 4.9 |  |  | 3.8 |  |  | 14.6 |  |  | 12.0 |
Total stock-based compensation expense | $ | 23.0 |  |  | $ | 19.8 |  |  | $ | 71.7 |  |  | $ | 62.9 |
At September 30, 2020, the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units, and employee stock purchase plan ("ESPP") subscription awards amounted to $160.1 million, which will be amortized on a straight-line basis over the weighted-average remaining requisite service period of 32 months. During the nine months ended September 30, 2020, the Company granted 1.8 million stock options at a weighted-average exercise price of $72.84, and 0.7 million restricted stock units at a weighted-average grant-date fair value of $73.16. During the nine months ended September 30, 2020, the Company also granted 0.1 million market-based restricted stock units at a weighted-average grant-date fair value of $82.67 and issued an additional 0.1 million shares of common stock related to a previous year's grant of market-based restricted stock units since the payout percentage achieved at the end of the performance period was in excess of the targeted shares. The market-based restricted stock units vest based on a combination of certain service and market conditions. The actual number of shares issued will be determined based on the Company's total shareholder return relative to a selected industry peer group over a three-year performance period, and may range from 0% to 175% of the targeted number of shares granted. Fair Value Disclosures The fair value of the market-based restricted stock units was determined using a Monte Carlo simulation model, which uses multiple input variables to determine the probability of satisfying the market condition requirements. The weighted-average assumptions used to determine the fair value of the market-based restricted stock units granted during the nine months ended September 30, 2020 and 2019 included a risk-free interest rate of 0.2% and 2.2%, respectively, and an expected volatility rate of 32.7% and 29.4%, respectively. The following table includes the weighted-average grant-date fair values of stock options granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model:
Option Awards | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Average risk-free interest rate | 0.3 | % |  | 1.8 | % |  | 0.3 | % |  | 2.3 | %
Expected dividend yield | None |  |  | None |  |  | None |  |  | None |
Expected volatility | 33.4 | % |  | 29.7 | % |  | 34.2 | % |  | 29.6 | %
Expected term (years) | 5.2 |  |  | 5.2 |  |  | 5.1 |  |  | 5.1 |
Fair value, per option | $ | 22.24 |  |  | $ | 19.36 |  |  | $ | 22.19 |  |  | $ | 18.10 |
The following table includes the weighted-average grant-date fair values for ESPP subscriptions granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model:
ESPP | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Average risk-free interest rate | 0.1 | % |  | 2.0 | % |  | 1.3 | % |  | 2.4 | %
Expected dividend yield | None |  |  | None |  |  | None |  |  | None |
Expected volatility | 37.5 | % |  | 32.0 | % |  | 33.1 | % |  | 27.1 | %
Expected term (years) | 0.7 |  |  | 0.7 |  |  | 0.6 |  |  | 0.6 |
Fair value, per share | $ | 21.79 |  |  | $ | 19.10 |  |  | $ | 16.61 |  |  | $ | 16.43 |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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- References No definition available. + Details
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