The Company has issued options under the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007 Omnibus Plan”) and the Genpact Limited 2017 Omnibus Incentive Compensation Plan (the “2017 Omnibus Plan”) to eligible persons, including employees, directors and certain other persons associated with the Company.

Under the 2007 Omnibus Plan, shares underlying options forfeited, expired, terminated or cancelled under any of the Company’s predecessor plans were added to the number of shares otherwise available for grant under the 2007 Omnibus Plan. The 2007 Omnibus Plan was amended and restated on April 11, 2012 to increase the number of common shares authorized for issuance by 5,593,200 shares to 15,000,000 shares.

On May 9, 2017, the Company’s shareholders approved the adoption of the 2017 Omnibus Plan, pursuant to which 15,000,000 Company common shares are available for issuance. The 2017 Omnibus Plan was amended and restated on April 5, 2019 to increase the number of common shares authorized for issuance by 8,000,000 shares to 23,000,000 shares. No grants may be made under the 2007 Omnibus Plan after the date of adoption of the 2017 Omnibus Plan. Grants that were outstanding under the 2007 Omnibus Plan as of the date of Company’s adoption of the 2017 Omnibus Plan remain subject to the terms of the 2007 Omnibus Plan.

Stock-based compensation costs relating to the foregoing plans during the three months ended March 31, 2019 and March 31, 2020 were $18,231 and $17,135, respectively. These costs have been allocated to “cost of revenue” and “selling, general, and administrative expenses.”

All options granted under the 2007 and 2017 Omnibus Plans are exercisable into common shares of the Company, have a contractual period of ten years and vest over four to five years unless specified otherwise in the applicable award agreement. The Company recognizes compensation cost over the vesting period of the option.

Compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholes option-pricing model.

The following table shows the significant assumptions used in determining the fair value of options granted in the three months ended March 31, 2019 and March 31, 2020. 1,771,068 options were granted in the three months ended March 31, 2019.

	Three months ended March 31, 2019	Three months ended March 31, 2020
Dividend yield	1.08%			0.89%
Expected life (in months)	84			84
Risk-free rate of interest	2.63%		1.50%
Volatility	21.38%		20.96%

A summary of stock option activity during the three months ended March 31, 2020 is set out below:

	Three months ended March 31, 2020
	Shares arising out of options			Weighted average exercise price		Weighted average remaining contractual life (years)				Aggregate intrinsic value
Outstanding as of January 1, 2020		8,360,212		$	25.33		6.5			$		—
Granted		431,924			43.94		—					—
Forfeited		(572,261)			27.98		—					—
Expired		—			—		—					—
Exercised		(87,528	)		14.27		—					1,307
Outstanding as of March 31, 2020		8,132,347		$	26.25		6.4			$		34,731
Vested as of March 31, 2020 and expected to vest thereafter (Note a)	7,801,794			$	25.99			6.4	$		34,397
Vested and exercisable as of March 31, 2020		3,318,511		$	19.72		3.5			$		31,454
Weighted average grant date fair value of grants during the period	$	9.72

As of March 31, 2020, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $25,809, which will be recognized over the weighted average remaining requisite vesting period of 3.5 years.

The Company has granted restricted share units (“RSUs”) under the 2007 and 2017 Omnibus Plans. Each RSU represents the right to receive one common share. The fair value of each RSU is the market price of one common share of the Company on the date of the grant. The RSUs granted to date have graded vesting schedules of three months to four years. The compensation expense is recognized on a straight-line basis over the vesting term. A summary of RSU activity during the three months ended March 31, 2020 is set out below:

	Three months ended March 31, 2020
	Number of Restricted Share Units			Weighted Average Grant Date Fair Value
Outstanding as of January 1, 2020		1,261,706		$	31.41
Granted		6,598			30.31
Vested (Note a)		(15,200	)		25.31
Forfeited		(518)			25.53
Outstanding as of March 31, 2020		1,252,586		$	31.48
Expected to vest (Note b)		1,155,824

44,562 RSUs vested in the year ended December 31, 2018, in respect of which 44,165 shares were issued during the three months ended March 31, 2020 after withholding shares to the extent required to satisfy minimum statutory withholding taxes.

As of March 31, 2020, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $18,850, which will be recognized over the weighted average remaining requisite vesting period of 2.3 years.

The Company also grants stock awards in the form of performance units (“PUs”) and has granted PUs under both the 2007 and 2017 Omnibus Plans.

Each PU represents the right to receive one common share at a future date based on the Company’s performance against specified targets. PUs granted to date have vesting schedules of six months to three years. The fair value of each PU is the market price of one common share of the Company on the date of grant and assumes that performance targets will be achieved. PUs granted under the plans are subject to cliff vesting. The compensation expense for such awards is recognized on a straight-line basis over the vesting terms. During the performance period, the Company’s estimate of the number of shares to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.

A summary of PU activity during the three months ended March 31, 2020 is set out below:

	Three months ended March 31, 2020
	Number of Performance Units		Weighted Average Grant Date Fair Value		Maximum Shares Eligible to Receive
Outstanding as of January 1, 2020		6,058,464	$	31.07		6,058,464
Granted		339,677		43.94		679,354
Vested (Note a)		(1,496,377)		25.21		(1,496,377)
Forfeited		(230,479)		32.61		(230,479)
Adjustment upon final determination of level of performance goal achievement (Note b)		6,503		34.72		6,503
Outstanding as of March 31, 2020		4,677,788	$	33.81		5,017,465
Expected to vest (Note c)		4,004,697

As of March 31, 2020, the total remaining unrecognized stock-based compensation cost related to PUs amounted to $66,146, which will be recognized over the weighted average remaining requisite vesting period of 1.6 years.

On May 1, 2008, the Company adopted the Genpact Limited U.S. Employee Stock Purchase Plan and the Genpact Limited International Employee Stock Purchase Plan (together, the “ESPP”). In April 2018, these plans were amended and restated, and their terms were extended to August 31, 2028.

The ESPP allows eligible employees to purchase the Company’s common shares through payroll deductions at 90% of the closing price of the Company’s common shares on the last business day of each purchase interval. The dollar amount of common shares purchased under the ESPP may not exceed 15% of the participating employee’s base salary, subject to a cap of $25 per employee per calendar year. With effect from September 1, 2009, the offering periods commence on the first business day in March, June, September and December of each year and end on the last business day of the subsequent May, August, November and February. 4,200,000 common shares have been reserved for issuance in the aggregate over the term of the ESPP.

During the three months ended March 31, 2019 and 2020, 64,869 and 81,289 common shares, respectively, were issued under the ESPP.

The ESPP is considered compensatory under the FASB guidance on Compensation-Stock Compensation.

The compensation expense for the ESPP is recognized in accordance with the FASB guidance on Compensation-Stock Compensation. The compensation expense for the ESPP during the three months ended March 31, 2019 and 2020 was $230 and $352, respectively, and has been allocated to cost of revenue and selling, general, and administrative expenses.