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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2019
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation We grant stock-based compensation awards under the Second Amended and Restated 2010 Stock Incentive Plan (Stock Incentive Plan), including stock options, restricted stock units, phantom stock, and unrestricted stock units. In the Stock Incentive Plan, we have 12,623,538 shares of common stock reserved and authorized for issuance subject to stock splits, dividends, and other similar events. At September 30, 2019, 5,972,601 shares were available for grant under the Stock Incentive Plan. We issue new shares of common stock upon the exercise of stock options or when vesting conditions on restricted stock units are fully satisfied. These shares are subject to a fungible share provision such that the authorized share reserve is reduced by (i) one share for every one share subject to a stock option or share appreciation right granted under the Plan and (ii) 1.7 shares for every one share of common stock that was subject to an award other than an option or share appreciation right. As part of the acquisition of SSNI, we reserved and authorized 2,880,039 shares, collectively, of Itron common stock to be issued under the Stock Incentive Plan for certain SSNI common stock awards that were converted to Itron common stock awards on January 5, 2018 (Acquisition Date) pursuant to the Agreement and Plan of Merger or were available for issuance pursuant to future awards under the Silver Spring Networks, Inc. 2012 Equity Incentive Plan (SSNI Plan). New stock-based compensation awards originally from the SSNI Plan may only be made to individuals who were not employees of Itron as of the Acquisition Date. Notwithstanding the foregoing, there is no fungible share provision for shares originally from the SSNI Plan. We also periodically award phantom stock units, which are settled in cash upon vesting and accounted for as liability-based awards with no impact to the shares available for grant. In addition, we maintain the Employee Stock Purchase Plan (ESPP), for which 242,399 shares of common stock were available for future issuance at September 30, 2019. Unrestricted stock and ESPP activity for the three and nine months ended September 30, 2019 and 2018 was not significant. Stock-Based Compensation Expense Total stock-based compensation expense and the related tax benefit were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
In thousands | 2019 |  | 2018 |  | 2019 |  | 2018
Stock options | $ | 389 |  |  | $ | 911 |  |  | $ | 1,413 |  |  | $ | 2,694 |
Restricted stock units | 6,734 |  |  | 5,381 |  |  | 19,178 |  |  | 19,803 |
Unrestricted stock awards | 158 |  |  | 158 |  |  | 473 |  |  | 572 |
Phantom stock units | 822 |  |  | 762 |  |  | 2,265 |  |  | 2,039 |
Total stock-based compensation | $ | 8,103 |  |  | $ | 7,212 |  |  | $ | 23,329 |  |  | $ | 25,108 |
Related tax benefit | $ | 1,443 |  |  | $ | 1,259 |  |  | $ | 4,161 |  |  | $ | 4,387 |
Stock Options A summary of our stock option activity is as follows:
| Shares |  | Weighted Average Exercise Price per Share |  | Weighted Average Remaining Contractual Life |  | Aggregate Intrinsic Value |  | Weighted Average Grant Date Fair Value
| (in thousands) |  |  |  | (years) |  | (in thousands) |  |
Outstanding, January 1, 2018 | 956 |  |  | $ | 47.10 |  |  | 6.3 |  | $ | 21,965 |  |  |
Converted upon acquisition | 42 |  |  | 51.86 |  |  |  |  |  |  | $ | 14.86 |
Granted | 117 |  |  | 68.90 |  |  |  |  |  |  | 24.55 |
Exercised | (151 | ) |  | 38.98 |  |  |  |  | 4,509 |  |  |
Forfeited | (3 | ) |  | 68.43 |  |  |  |  |  |  |
Expired | (66 | ) |  | 95.31 |  |  |  |  |  |  |
Outstanding, September 30, 2018 | 895 |  |  | $ | 47.92 |  |  | 6.6 |  | $ | 15,332 |  |  |
Outstanding, January 1, 2019 | 895 |  |  | $ | 47.93 |  |  | 6.2 |  | $ | 4,806 |  |  |
Granted | 76 |  |  | 76.55 |  |  |  |  |  |  | $ | 26.20 |
Exercised | (117 | ) |  | 40.10 |  |  |  |  | 2,745 |  |  |
Forfeited | (8 | ) |  | 67.38 |  |  |  |  |  |  |
Expired | (11 | ) |  | 66.24 |  |  |  |  |  |  |
Outstanding, September 30, 2019 | 835 |  |  | $ | 51.22 |  |  | 5.5 |  | $ | 19,190 |  |  |
Exercisable, September 30, 2019 | 640 |  |  | $ | 45.32 |  |  | 4.5 |  | $ | 18,328 |  |  |
Expected to vest, September 30, 2019 | 195 |  |  | $ | 70.56 |  |  | 8.8 |  | $ | 861 |  |  |
At September 30, 2019, total unrecognized stock-based compensation expense related to nonvested stock options was $3.0 million, which is expected to be recognized over a weighted average period of approximately 2.5 years. The weighted average assumptions used to estimate the fair value of stock options granted and the resulting weighted average fair value are as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Expected volatility | 31.7 | % |  | 28.6 | % |  | 31.7 | % |  | 30.6 | %
Risk-free interest rate | 1.7 | % |  | 2.9 | % |  | 1.7 | % |  | 2.8 | %
Expected term (years) | 6.1 |  |  | 6.1 |  |  | 6.1 |  |  | 6.1 |
Restricted Stock Units The following table summarizes restricted stock unit activity:
In thousands, except fair value | Number of Restricted Stock Units |  | Weighted Average Grant Date Fair Value |  | Aggregate Intrinsic Value
Outstanding, January 1, 2018 | 556 |  |  |  |  |
Converted upon acquisition | 579 |  |  |  |  |
Granted | 262 |  |  | $ | 65.22 |  |  |
Released (1) | (494 | ) |  |  |  | $ | 26,753 |
Forfeited | (102 | ) |  |  |  |
Outstanding, September 30, 2018 | 801 |  |  |  |  |
Outstanding, January 1, 2019 | 817 |  |  | $ | 59.70 |  |  |
Granted | 334 |  |  | 62.04 |  |  |
Released (1) | (435 | ) |  | 61.79 |  |  | $ | 26,852 |
Forfeited | (53 | ) |  | 66.27 |  |  |
Outstanding, September 30, 2019 | 663 |  |  | 64.30 |  |  |
Vested but not released, September 30, 2019 | 8 |  |  |  |  | $ | 602 |
Expected to vest, September 30, 2019 | 652 |  |  |  |  | $ | 48,190 |
(1) Shares released is presented gross of shares netted for employee payroll tax obligations. At September 30, 2019, total unrecognized compensation expense on restricted stock units was $38.1 million, which is expected to be recognized over a weighted average period of approximately 2.1 years. The weighted average assumptions used to estimate the fair value of performance-based restricted stock units granted and the resulting weighted average fair value are as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Expected volatility | 33.4 | % |  | N/A |  | 31.4 | % |  | 28.0 | %
Risk-free interest rate | 1.8 | % |  | N/A |  | 2.5 | % |  | 2.2 | %
Expected term (years) | 2.5 |  |  | N/A |  | 1.6 |  |  | 2.1 |
Weighted average fair value | $ | 72.18 |  |  | N/A |  | $ | 61.25 |  |  | $ | 78.56 |
There were no performance-based restricted stock units granted for the three months ended September 30, 2018. Phantom Stock Units The following table summarizes phantom stock unit activity:
In thousands, except fair value | Number of Phantom Stock Units |  | Weighted Average Grant Date Fair Value
Outstanding, January 1, 2018 | 63 |  |  |  |
Converted upon acquisition | 21 |  |  |
Granted | 37 |  |  | $ | 68.06 |
Released | (34 | ) |  |  |
Forfeited | (3 | ) |  |  |
Outstanding, September 30, 2018 | 84 |  |  |  |
Expected to vest, September 30, 2018 | 84 |  |  |
Outstanding, January 1, 2019 | 83 |  |  | $ | 61.80 |
Granted | 55 |  |  | 60.34 |
Released | (40 | ) |  | 56.89 |
Forfeited | (7 | ) |  | 66.26 |
Outstanding, September 30, 2019 | 91 |  |  | 62.73 |
Expected to vest, September 30, 2019 | 91 |  |  |  |
At September 30, 2019, total unrecognized compensation expense on phantom stock units was $5.4 million, which is expected to be recognized over a weighted average period of approximately 2.3 years. As of September 30, 2019 and December 31, 2018, we have recognized a phantom stock liability of $1.4 million and $1.5 million, respectively, within wages and benefits payable in the Consolidated Balance Sheets.

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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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