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 and nine months ended September 30, 2020 and 2019:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2020			2019			2020			2019
Stock-based compensation expense included in cost of sales	$	101		$	83		$	303		$	272
Selling, general and administrative expense		953			1,142			2,999			2,867
Research and development expense		556			646			1,754			2,045
Stock-based compensation expense included in operating expenses		1,509			1,788			4,753			4,912
Total stock-based compensation expense		1,610			1,871			5,056			5,184
Tax benefit for expense associated with stock options, PSUs, RSUs and restricted stock		(384	)		(446	)		(1,205	)		(1,235	)
Total stock-based compensation expense, net of tax	$	1,226		$	1,425		$	3,851		$	3,949

The following table summarizes PSUs, RSUs and restricted stock outstanding as of December 31, 2019 and September 30, 2020 and the changes that occurred during the nine months ended September 30, 2020.

	Number of Shares (in thousands)			Weighted Avg. Grant Date Fair Value (per share)
Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2019		1,891		$	14.58
PSUs, RSUs and restricted stock granted		399		$	8.21
PSUs, RSUs and restricted stock vested		(15	)	$	12.76
PSUs, RSUs and restricted stock forfeited		(586	)	$	18.24
Unvested PSUs, RSUs and restricted stock outstanding, September 30, 2020		1,689		$	11.83

During the nine months ended September 30, 2020, the Company issued 0.3 million performance-based PSUs under the ADTRAN, Inc. 2015 Employee Stock Incentive Plan (the “2015 Employee Plan”) to its executive officers and certain employees. The grant-date fair value of these performance-based awards is based on the closing price of the Company’s stock on the date of grant. Subject to the grantee’s continued employment, the grantee has the ability to earn shares in a range of 0% to 142.8% of the awarded number of PSUs based on the achievement of a defined performance target at the end of a three-year period. If the Company achieves the performance target at the end of the first or second year during the vesting period, the grantee will be entitled to the target number of performance shares, which will not be issued until the end of the three-year period. Equity-based compensation expense with respect to these awards will be adjusted over the vesting period to reflect the probability of achievement of the performance target defined in the award agreements.

The fair value of RSUs and restricted stock is equal to the closing price of our stock on the date of grant. The fair value of PSUs with market conditions is calculated using a Monte Carlo simulation valuation method.

As of September 30, 2020, total unrecognized compensation expense related to unvested market-based PSUs, RSUs and restricted stock was approximately $10.6 million, which will be recognized over the remaining weighted-average period of 2.3 years. In addition, there was $2.3 million of unrecognized compensation expense related to unvested 2020 performance-based PSUs, which will be recognized over the remaining requisite service period of 2.3 years if achievement of the performance obligation becomes probable. Unrecognized compensation expense will be adjusted for actual forfeitures.

At the annual meeting of stockholders held on May 13, 2020, the Company’s stockholders approved, upon recommendation of the Board of Directors, the adoption of the ADTRAN, Inc. 2020 Employee Stock Incentive Plan (the “2020 Employee Plan”) as well as the ADTRAN, Inc. 2020 Directors Stock Plan (the “2020 Directors Plan”). No additional awards will be granted under the 2015 Employee Plan or the 2010 Directors Stock Plan subsequent to the stockholders’ approval of these new stock plans. Outstanding awards granted under the 2015 Employee Plan and the 2010 Directors Stock Plan will remain subject to the terms of such plans, and shares underlying awards granted under such plans that are cancelled or forfeited will be available for issuance under the 2020 Employee Plan or the 2020 Directors Plan, as applicable.

Under the 2020 Employee Plan, the Company is authorized to issue 2.8 million shares of common stock to certain employees, key service providers and advisors through incentive stock options and non-qualified stock options, stock appreciation rights, RSUs and restricted stock, any of which may be subject to performance-based conditions. Stock options, RSUs and restricted stock granted under the 2020 Employee Plan reduce the shares authorized for issuance under the 2020 Employee Plan by one share of common stock for each share underlying the award. Forfeitures, cancellations or expirations of awards granted under the 2015 Employee Plan increase the shares authorized for issuance under the 2020 Employee Plan, with forfeitures, cancellations or expirations of RSUs and restricted stock increasing the shares authorized for issuance by 2.5 shares of common stock for each share underlying the award. Forfeitures, cancellations or expirations of stock options from the 2015 Employee Plan increase the shares authorized for issuance under the 2020 Employee Plan by one share of common stock for each share underlying the award. RSUs and restricted stock granted under the 2020 Employee Plan will typically vest pursuant to a four-year vesting schedule beginning on the first anniversary of the grant date. Stock options granted under the 2020 Employee Plan will typically become exercisable beginning after one year of continued employment, normally pursuant to a four-year vesting schedule beginning on the first anniversary of the grant date and have a ten-year contractual term.

Under the 2020 Directors Plan, the Company is authorized to issue 0.4 million shares of common stock through stock options, restricted stock and RSUs to non-employee directors. Stock awards issued under the 2020 Directors Plan typically will become vested in full on the first anniversary of the grant date. Stock options issued under the 2020 Directors Plan will have a ten-year contractual term. Stock options, restricted stock and RSUs granted under the 2020 Directors Plan reduce the shares authorized for issuance under the 2020 Directors Plan by one share of common stock for each share underlying the award. Forfeitures, cancellations and expirations of awards granted under the 2010 Directors Stock Plan increase the shares authorized for issuance under the 2020 Directors Plan by one share of common stock for each share underlying the award.

As of September 30, 2020, 3.6 million shares, including forfeitures to date under the 2015 Employee Plan and the 2010 Directors Stock Plan, were available for issuance under stockholder-approved equity plans.

The following table summarizes stock options outstanding as of December 31, 2019 and September 30, 2020 and the changes that occurred during the nine months ended September 30, 2020:

	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, 2019		3,572		$	22.88		3.4	$	—
Stock options exercised		—		$	—
Stock options forfeited		—		$	—
Stock options expired		(352	)	$	21.48
Stock options outstanding, September 30, 2020		3,220		$	22.94		2.7	$	—
Stock options exercisable, September 30, 2020		3,217		$	22.95		2.7	$	—

As of September 30, 2020, total unrecognized compensation expense related to unvested stock options was approximately $1 thousand, which will be recognized over the remaining weighted-average period of 0.1 years. Unrecognized compensation expense will be adjusted for actual forfeitures.

There were no stock options granted during the three and nine months ended September 30, 2020 and 2019. All of the options were previously issued at exercise prices that approximated fair market value at the date of grant.

The aggregate intrinsic value of stock options represents 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 September 30, 2020. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock and was zero as of September 30, 2020. The total pre-tax intrinsic value of options exercised during the nine months ended September 30, 2020 was zero.