Share-based Payments

Share-based Compensation Expense

The following table summarizes share-based compensation expense included in our condensed consolidated statements of income:



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(In millions)	2017			2016			2017			2016
Research and development	$	17.5		$	21.5		$	36.2		$	42.9
Selling, general and administrative	18.9			28.7			48.3			63.4
Restructuring charges	—			—			—			(1.8		)
Subtotal	36.4			50.2			84.5			104.5
Capitalized share-based compensation costs	(2.4		)	(4.4		)	(5.1		)	(7.5		)
Share-based compensation expense included in total cost and expenses	34.0			45.8			79.4			97.0
Income tax effect	(8.5		)	(12.7		)	(20.9		)	(27.9		)
Share-based compensation expense included in net income attributable to Biogen Inc.	$	25.5		$	33.1		$	58.5		$	69.1

The following table summarizes share-based compensation expense associated with each of our share-based compensation programs:



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(In millions)	2017			2016			2017			2016
Market stock units	$	3.0		$	7.9		$	12.6		$	21.3
Time-vested restricted stock units	27.6			33.9			54.5			64.0
Cash settled performance units	2.5			4.6			6.0			4.8
Performance units	1.2			1.3			5.7			8.2
Employee stock purchase plan	2.1			2.5			5.7			6.2
Subtotal	36.4			50.2			84.5			104.5
Capitalized share-based compensation costs	(2.4		)	(4.4		)	(5.1		)	(7.5		)
Share-based compensation expense included in total cost and expenses	$	34.0		$	45.8		$	79.4		$	97.0

We estimate the fair value of our obligations associated with our performance units and cash settled performance units at the end of each reporting period through expected settlement. Cumulative adjustments to these obligations are recorded each quarter to reflect changes in the stock price and estimated outcome of the performance-related conditions.

Spin-off Related Equity Adjustments

Pursuant to an employee matters agreement entered into in connection with the spin-off of our hemophilia business and the provisions of our existing stock-based compensation arrangements, we made certain adjustments to the number and terms of our outstanding stock options, restricted stock units, cash settled performance units and other share-based awards to preserve the intrinsic value of the awards immediately before and after the spin-off. For purposes of the vesting of these equity awards, continued employment or service with Biogen or with Bioverativ was treated as continued employment for purposes of both Biogen’s and Bioverativ’s equity awards with the outstanding awards continuing to vest over their respective original vesting periods. Outstanding unvested awards for employees transferring to Bioverativ were converted to unvested Bioverativ awards.

Adjustments to the number of our share-based compensation awards were made using an adjustment ratio based upon the weighted-average closing price of our common stock for the 10 calendar days prior to the effective date of the spin-off and the volume weighted-average prices for the 10 calendar days of our common stock following the effective date of the spin-off. For stock options, the exercise prices of the awards were modified to maintain the pre-spin intrinsic value of the awards in relation to the post-spin stock price of Biogen. The difference between the fair value of the awards based upon the adjustment ratio and the opening price on the distribution date was not material.

2017 Omnibus Equity Plan

In June 2017 our shareholders approved the Biogen Inc. 2017 Omnibus Equity Plan (2017 Omnibus Equity Plan) for share-based awards to our employees. Awards granted from the 2017 Omnibus Equity Plan may include stock options, shares of restricted stock, restricted stock units, performance shares, stock appreciation rights and other awards in such amounts and with such terms and conditions as may be determined by a committee of our Board of Directors, subject to the provisions of the plan. Shares of common stock available for grant under the 2017 Omnibus Equity Plan consist of 8.0 million shares reserved for this purpose, plus shares of common stock that remained available for grant under our 2008 Omnibus Equity Plan (including shares available by reason of a predecessor plan) on the date that our shareholders approved the 2017 Omnibus Equity Plan, plus shares that were subject to awards under the 2008 Omnibus Equity Plan (including shares available by reason of a predecessor plan) that remain unissued upon the cancellation, surrender, exchange, termination or forfeiture of such awards. The 2017 Omnibus Equity Plan provides that awards other than stock options and stock appreciation rights will be counted against the total number of shares available under the plan in a 1.5-to-1 ratio.

We have not made any awards pursuant to the 2008 Omnibus Equity Plan since our shareholders approved the 2017 Omnibus Equity Plan, and do not intend to make any awards pursuant to the 2008 Omnibus Equity Plan in the future, except that unused shares under the 2008 Omnibus Equity Plan have been carried over for use under the 2017 Omnibus Equity Plan.