Employee Benefit Plans

Equity Incentive Plans

The Company has stock-based compensation plans pursuant to which it has granted stock options, restricted stock units (“RSUs”), and performance share awards (“PSAs”). The Company also maintains its 2008 Employee Stock Purchase Plan (the “ESPP”) for all eligible employees. As of March 31, 2019, 11.4 million and 7.4 million shares were available for future issuance under the Company's 2015 Equity Incentive Plan (the "2015 Plan") and the ESPP, respectively. In connection with past acquisitions, the Company also assumed or substituted stock options, RSUs, RSAs, and PSAs.

Restricted Stock Unit and Performance Share Award Activities

The Company’s RSU and PSA activity and related information as of and for the three months ended March 31, 2019 were as follows (in millions, except per share amounts and years):



	Outstanding RSUs, RSAs and PSAs⁽⁴⁾
	Number of Shares		Weighted Average Grant-Date Fair Value per Share		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Balance as of December 31, 2018	17.4		$	25.32
RSUs granted ⁽¹⁾⁽³⁾	5.5		25.53
PSAs granted⁽²⁾⁽³⁾	0.7		25.06
RSUs vested	(3.9	)	26.00
RSAs vested	(0.1	)	23.13
PSAs vested	(0.5	)	26.76
RSUs canceled	(0.8	)	26.32
PSAs canceled	(0.6	)	23.25
Balance as of March 31, 2019	17.7		$	25.21	1.5	$	467.8

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⁽¹⁾

Includes service-based and market-based RSUs. The number of shares subject to market-based condition represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to market-based condition that would be issued if market criteria determined by the Compensation Committee of the Board are achieved at target is 0.2 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is zero to 0.4 million shares.

⁽²⁾

The number of shares subject to PSAs granted represents the aggregate maximum number of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to these PSAs that would be issued if performance goals determined by the Compensation Committee of the Board are achieved at target is 0.4 million shares. Depending on achievement of such performance goals, the range of shares that could be issued under these awards is zero to 0.7 million shares.

⁽³⁾

The grant date fair value of RSUs and PSAs were reduced by the present value of dividends expected to be paid on the underlying shares of common stock during the requisite and derived service period as these awards are not entitled to receive dividends until vested. During the three months ended March 31, 2019, the Company declared a quarterly cash dividend of $0.19 per share of common stock on January 29, 2019.


⁽⁴⁾	0.3 million shares of PSAs were modified during the three months ended March 31, 2019, which relate to PSAs granted in 2018 and PSAs assumed by the Company in connection with acquisitions consummated in 2016. Compensation cost resulting from the modifications totaled $7.7 million to be recognized over the remaining terms of the modified awards.

Employee Stock Purchase Plan

The following table summarizes employee stock purchases through the ESPP (in millions, except per share amounts):



	Three Months Ended March 31,
	2019		2018
Shares purchased	1.2		1.3
Average exercise price per share	$	22.04	$	22.23

On November 6, 2017, the Company’s Compensation Committee amended and restated the ESPP to provide that the offering period that began on February 1, 2018 would be for 24 months with four 6-month purchase periods. A new 24-month offering period will commence every six months thereafter. The purchase price for the Company’s common stock under the ESPP is 85% of the lower of the fair market value of the shares at (1) the beginning of the applicable offering period or (2) the end of each 6-month purchase period during such offering period. The ESPP will continue in effect until February 25, 2028, unless terminated earlier under the provisions of the ESPP.

Share-Based Compensation Expense

Share-based compensation expense associated with stock options, RSUs, restricted stock awards ("RSAs"), PSAs, and the ESPP was recorded in the following cost and expense categories in the Condensed Consolidated Statements of Operations (in millions):



	Three Months Ended March 31,
	2019		2018
Cost of revenues - Product	$	1.9	$	1.9
Cost of revenues - Service	4.5		4.8
Research and development	12.2		44.1
Sales and marketing	9.4		13.5
General and administrative	5.9		6.1
Total	$	33.9	$	70.4

The following table summarizes share-based compensation expense by award type (in millions):



	Three Months Ended March 31,
	2019		2018
Stock options	$	0.1	$	0.1
RSUs, RSAs, and PSAs	29.1		65.6
ESPP	4.7		4.7
Total	$	33.9	$	70.4

As of March 31, 2019, the total unrecognized compensation cost related to unvested share-based awards was $369.5 million to be recognized over a weighted-average period of 1.9 years.