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Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock-Based Compensation | 6. STOCK-BASED COMPENSATION The following table summarizes stock-based compensation expense related to stock options, performance stock units (PSUs), restricted stock units (RSUs) and restricted stock for the three months ended March 31, 2019 and 2018, which was recognized as follows:
|  | Three Months Ended |
|  | March 31, |
(In thousands) |  | 2019 |  |  | 2018 |
Stock-based compensation expense included in cost of sales |  | $ | 104 |  |  | $ | 95 |
Selling, general and administrative expense |  |  | 1,063 |  |  |  | 1,035 |
Research and development expense |  |  | 692 |  |  |  | 689 |
Stock-based compensation expense included in operating expenses |  |  | 1,755 |  |  |  | 1,724 |
Total stock-based compensation expense |  |  | 1,859 |  |  |  | 1,819 |
Tax benefit for expense associated with non-qualified options, PSUs, RSUs and restricted stock |  |  | (443 | ) |  |  | (384 | )
Total stock-based compensation expense, net of tax |  | $ | 1,416 |  |  | $ | 1,435 |
Stock Options The following table is a summary of our stock options outstanding as of December 31, 2018 and March 31, 2019, and the changes that occurred during the three months ended March 31, 2019:
|  | Number of Stock Options (in thousands) |  |  | Weighted Avg. Exercise Price (per share) |  |  | Weighted Avg. Remaining Contractual Life (in years) |  |  | Aggregate Intrinsic Value (in thousands) |
Stock options outstanding, December 31, 2018 |  |  | 4,382 |  |  | $ | 22.91 |  |  |  | 4.10 |  |  | $ | — |
Stock options granted |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Stock options exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Stock options forfeited |  |  | (8 | ) |  | $ | 15.33 |  |  |  |  |  |  |  |  |
Stock options expired |  |  | (33 | ) |  | $ | 23.13 |  |  |  |  |  |  |  |  |
Stock options outstanding, March 31, 2019 |  |  | 4,341 |  |  | $ | 22.93 |  |  |  | 3.80 |  |  | $ | — |
Stock options exercisable, March 31, 2019 |  |  | 4,098 |  |  | $ | 23.37 |  |  |  | 3.63 |  |  | $ | — |
At March 31, 2019, total unrecognized compensation expense related to non-vested stock options was approximately $0.6 million, which is expected to be recognized over an average remaining recognition period of 0.7 years. All of the options above were issued at exercise prices that approximated fair market value at the date of grant. At March 31, 2019, 2.4 million options were available for grant under the shareholder-approved plans. The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between ADTRAN’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2019. The amount of aggregate intrinsic value will change based on the fair market value of ADTRAN’s stock. The total pre-tax intrinsic value of options exercised during the three months ended March 31, 2019 was zero. The fair value of our stock options is estimated using the Black-Scholes model. The determination of the fair value of stock options on the date of grant using the Black-Scholes model is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables that may have a significant impact on the fair value estimate. The stock option pricing model requires the use of several assumptions that impact the fair value estimate. These variables include, but are not limited to, the volatility of our stock price and employee exercise behaviors. There were no stock options granted during the three months ended March 31, 2019 or 2018. PSUs, RSUs and restricted stock The following table is a summary of our PSUs, RSUs and restricted stock outstanding as of December 31, 2018 and the changes that occurred during the three months ended March 31, 2019:
|  | Number of Shares (in thousands) |  |  | Weighted Avg. Grant Date Fair Value (per share) |
Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2018 |  |  | 1,570 |  |  | $ | 18.52 |
PSUs, RSUs and restricted stock granted |  |  | 59 |  |  | $ | 12.54 |
PSUs, RSUs and restricted stock vested |  |  | (1 | ) |  | $ | 18.86 |
PSUs, RSUs and restricted stock forfeited |  |  | (44 | ) |  | $ | 17.88 |
Unvested PSUs, RSUs and restricted stock outstanding, March 31, 2019 |  |  | 1,584 |  |  | $ | 18.32 |
The fair value of our PSUs with market conditions is calculated using a Monte Carlo simulation valuation method. The fair value of RSUs and restricted stock is equal to the closing price of our stock on the business day immediately preceding the grant date. At March 31, 2019, total unrecognized compensation expense related to the non-vested portion of market-based PSUs, RSUs and restricted stock was approximately $16.1 million, which is expected to be recognized over an average remaining recognition period of 2.8 years. In addition, there was $9.0 million of unrecognized compensation expense related to the unvested 2017 performance-based PSUs, which will be recognized over the remaining requisite service period of 0.8 years if achievement of the performance obligation becomes probable. For the three months ending March 31, 2019 and 2018, no compensation expense was recognized related to these performance-based PSUs.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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