In April 2003, the Company adopted the 2003 Stock Plan (the “2003 Plan”). The 2003 Plan provided for the granting of stock options to employees and consultants of the Company. During the second fiscal quarter of 2013, the Company's 2003 Stock Plan expired. No further equity awards can be granted under the 2003 Plan. Outstanding awards under the 2003 Stock Plan remain subject to the terms and conditions of the 2003 plan.

In April 2006, the Company adopted the 2006 Long Term Incentive Plan (the “2006 Plan”). The 2006 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”) performance awards and other stock awards, to eligible directors, employees and consultants of the Company. The Company's 2006 Plan expired on April 13, 2016 by its terms. No further equity awards can be granted under the 2006 Plan. Outstanding awards under the 2006 Stock Plan remain subject to the terms and conditions of the 2006 plan.

In April 2016, the Company's Board of Directors adopted the 2016 Equity Incentive Plan (the "2016 Plan") which was approved by the Company's stockholders at the 2016 Annual Meeting of Stockholders on June 3, 2016. The 2016 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible directors, employees and consultants of the Company. The original maximum aggregate number of shares that could be issued under the 2016 Plan was 2.5 million Shares, plus (i) any shares that were available for grant under the Company’s 2006 Plan as of immediately prior to the 2006 Plan's expiration by its terms, which was 699,827 shares, plus (ii) any shares granted under the 2006 Plan that expire, are forfeited to or repurchased by the Company. In May 2018, the Company adopted amendments to the 2016 Plan which increased the number of shares of the Company’s common stock that may be issued under the 2016 plan by an additional 1.7 million shares. In January 2019, the Company received the approval from its Compensation Committee to increase the number of shares that the Company may be issued under the 2016 plan to a new total of 3.1 million shares, pursuant to the adjustment provisions of the 2016 Plan as a result of the Distribution. As of December 31, 2019, approximately 1.6 million shares remained available for future grants under the 2016 Plan.

Options granted generally vest over four years with the first tranche at the end of twelve months from the date of grant and the remaining shares vesting monthly over the remaining three years. Options granted generally expire in 10 years from the date of grant. RSUs granted generally vest in annual installments over four years and do not have an expiration date.

Any shares subject to restricted stock, restricted stock units, performance units, or performance shares awarded under the 2016 Plan will be counted against the shares available for issuance under the 2016 Plan as one and fifty-eight hundredths (1.58) shares for every one share subject to such awards. Additionally, any shares that are tendered by a participant of the 2016 Plan or retained by the Company as full or partial payment to the Company for the purchase of an award or to satisfy tax withholding obligations in connection with an award shall no longer again be made available for issuance under the 2016 Plan.

The Company sponsors an Employee Stock Purchase Plan (the “ESPP”), pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain income limits, to purchase shares of the Company’s common stock. Prior to February 16, 2016, employees could purchase stock semi-annually at a price equal to 85% of the fair market value on the purchase date. Beginning February 16, 2016, the terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each offering period is generally six-months. In April 2016, the Company approved an amendment to the plan to increase the number of shares of common stock authorized for sale under the plan by 1.0 million shares to a total of 2.0 million shares. For

the years ended December 31, 2019, 2018, and 2017, the Company recognized ESPP compensation expense of $1.4 million, $1.4 million and $1.2 million, respectively. Approximately 123,000 shares of common stock were purchased at an average exercise price of $29.41 in the year ended December 31, 2019. As of December 31, 2019, 0.6 million shares were reserved for future issuance under the ESPP.

	Number of Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)			(In dollars)		(In years)		(In thousands)
Outstanding as of December 31, 2018		1,969		$	25.30
Granted		502			26.61
Exercised		(250	)		20.08
Cancelled		(16	)		36.27
Expired		(17	)		36.81
Outstanding as of December 31, 2019		2,188		$	26.03		6.10	$	4,171

As of December 31, 2019
Vested and expected to vest		2,188		$	26.03		6.10	$	4,171
Exercisable Options		1,411		$	23.96		4.60	$	4,153

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of 2019, or December 31, 2019, and the exercise price, multiplied by the number of shares underlying the in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2019. This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the year ended December 31, 2019, 2018, and 2017 was $3.5 million, $11.0 million and $7.7 million, respectively.

The total fair value of options vested during the years ended December 31, 2019, 2018, and 2017 was $4.1 million, $3.8 million and $3.8 million, respectively.

The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2019:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Shares Outstanding		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price Per Share		Shares Exercisable		Weighted- Average Exercise Price Per Share
	(In thousands)		(In years)		(In dollars)		(In thousands)		(In dollars)
$12.34 - $19.32		452		3.86	$	18.82		452	$	18.82
$19.33 - $23.48		559		3.95	$	21.65		542	$	21.59
$23.77 - $25.37		293		6.85	$	25.36		188	$	25.36
$26.61 - $26.61		503		8.91	$	26.61		37	$	26.61
$29.23 - $41.67		381		7.63	$	40.76		192	$	40.80
$12.34 - $41.67		2,188		6.10	$	26.03		1,411	$	23.96

	Number of Shares			Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term		Average Intrinsic Value
	(In thousands)			(In dollars)		(In years)		(In thousands)
Outstanding as of December 31, 2018		1,627		$	34.31
Granted		709			31.33
Vested		(594	)		31.35
Cancelled		(155	)		35.67
Outstanding as of December 31, 2019		1,587		$	33.95		1.36	$	38,895

The total fair value of RSUs vested during the years ended December 31, 2019, 2018 and 2017 was $19.4 million, $25.7 million and $19.5 million, respectively. The grant date fair value of RSUs vested during the years ended December 31, 2019, 2018 and 2017 was $18.6 million, $18.1 million and $14.6 million, respectively.

The Company measures stock-based compensation at the grant date based on the estimated fair value of the award. Estimated compensation cost relating to RSUs is based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of options granted and the purchase rights granted under the ESPP is estimated on the date of grant using a Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. The estimated expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk free interest rate of options granted and the purchase rights granted under the ESPP is based on the implied yield currently available on U.S. Treasury securities with a remaining term commensurate with the estimated expected term. Expected volatility of options granted under the 2016 Plan and the purchase rights granted under the ESPP is based on historical volatility over the most recent period commensurate with the estimated expected term.

The following table sets forth the weighted-average assumptions used to estimate the fair value of option grants and purchase rights granted under the ESPP during the years ended December 31, 2019, 2018 and 2017:

	Year Ended December 31,
	2019			2018			2017			2019			2018			2017
	Stock Options									ESPP
Expected life (in years)		6.2			4.4			4.4			0.5			0.5			0.5
Risk-free interest rate		1.85	%		2.36	%		1.66	%		2.06	%		2.00	%		0.93	%
Expected volatility		33.9	%		31.1	%		31.6	%		43.90	%		37.9	%		29.7	%
Dividend yield		—			—			—			—			—			—

The weighted average estimated fair value of options granted during the years ended December 31, 2019, 2018 and 2017 was $9.72, $20.63 and $12.35, respectively.

The following table sets forth the stock-based compensation expense resulting from stock options, RSUs, and the ESPP included in the Company’s consolidated statements of operations:

	Year Ended December 31,
	2019		2018		2017
	(In thousands)
Cost of revenue	$	2,843	$	2,435	$	1,406
Research and development		6,532		4,283		2,968
Sales and marketing		9,069		8,267		5,481
General and administrative		10,693		11,476		9,114
Total	$	29,137	$	26,461	$	18,969

The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the award vesting term of four years. Forfeitures are accounted for as they occur.

Total stock-based compensation cost capitalized in inventory was less than $0.8 million in the years ended December 31, 2019, 2018 and 2017.

As of December 31, 2019, $7.8 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.1 years and $41.3 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.2 years. If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel all or a portion of the remaining unearned stock-based compensation expense.