15. Employee Retirement and Postretirement Benefits

Stock-Based Compensation — As of September 30, 2017, we had three stock-based employee compensation plans (“Stock Plans”). See Note 11, “Stock-Based Compensation,” in our 2016 10-K for further information regarding these plans. Most of our equity grants are awarded on an annual basis. The annual grants occurred in the first quarter of 2017 whereas they had occurred in the second quarter in prior years.

For the nine month period ended September 30, 2017, options to purchase 1,992,595 shares of common stock (of which 527,850 are options that contain a market condition, in addition to the time-based vesting requirements) were granted, options to purchase 48,662 shares of common stock were exercised, options to purchase 315,140 (of which 33,620 options contain a market condition) shares of common stock were forfeited, and options to purchase 265,024 shares of common stock expired.

For the nine month period ended September 30, 2017, 875,166 Restricted Stock Units (“RSUs”) (of which 228,840 are RSUs that contain a market condition, in addition to the time-based vesting requirements) were granted, 368,506 RSUs vested and 196,167 RSUs (of which 27,940 contained a market condition) were forfeited.

For the nine month period ended September 30, 2017, 92,910 shares of restricted stock were granted and 98,988 shares vested. These shares are deemed issued as of the date of grant, but not outstanding until they vest.

For the nine month period ended September 30, 2017, 60,972 DSUs were granted and none were released.

For the nine month period ended September 30, 2017, 117,471 shares of common stock were issued under the employee stock purchase plan.

The following is a summary of our stock-based compensation expense by operating expense line in the unaudited condensed consolidated statements of operations (in thousands):


	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2017		2016		2017		2016
Cost of service revenue	$	542	$	446	$	1,332	$	1,142
Cost of equipment revenue		49		34		136		78
Engineering, design and development		897		970		2,801		2,432
Sales and marketing		1,305		1,498		3,473		3,799
General and administrative		2,490		2,052		7,265		5,535

Total stock-based compensation expense	$	5,283	$	5,000	$	15,007	$	12,986

401(k) Plan — Under our 401(k) plan, all employees who are eligible to participate are entitled to make tax-deferred contributions, subject to Internal Revenue Service limitations. We match 100% of the employee’s first 4% of contributions made, subject to annual limitations. Our matching contributions were $1.2 million and $4.0 million, respectively, for the three and nine month periods ended September 30, 2017, and $1.1 million and $3.1 million, respectively, for the prior year periods.