We have authorized up to one million shares of preferred stock, $0.01 par value per share, for issuance. Each series of preferred stock shall have such rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, as may be determined by our board of directors (the “Board”).

There is an aggregate of 8,040,000 of our shares of $0.01 par value per share common stock authorized and reserved for issuance under the Avid Technology, Inc. 2014 Stock Incentive Plan (the “Plan”). The Plan was originally adopted by the Board on September 14, 2014 and approved by our stockholders on October 29, 2014. In connection with the approval of the Plan, our Amended and Restated 2005 Stock Incentive Plan has been closed; no additional awards may be granted under that plan. Shares available for issuance under the Plan totaled 1,642,460 at December 31, 2019.

Under the Plan, we may grant stock awards or options to purchase our common stock to employees, officers, directors, and consultants. The exercise price for options generally must be no less than market price on the date of grant. Awards may be performance-based where vesting or exercisability is conditioned on achieving performance objectives, time-based, or a combination of both. Current option grants become exercisable over various periods, typically three years to four years for employees and one year for non-employee directors, and have a maximum term of seven years to ten years. Restricted stock and restricted stock unit awards with time-based vesting typically vest over three years to four years for employees and one year for non-employee directors.

We use the Black-Scholes option pricing model to estimate the fair value of stock option grants with time-based vesting. The Black-Scholes model relies on a number of key assumptions to calculate estimated fair value. The assumed dividend yield of zero is based on the fact that we have never paid cash dividends and has no present expectation to pay cash dividends and our current

Financing Agreement, entered into on February 26, 2016 with Cerberus Business Finance, LLC, precludes us from paying dividends. The expected volatility is now based on actual historic stock volatility for periods equivalent to the expected term of the award. The assumed risk-free interest rate is the U.S. Treasury security rate with a term equal to the expected life of the option. The assumed expected life is based on company-specific historical experience considering the exercise behavior of past grants and models the pattern of aggregate exercises.

The fair value of restricted stock and restricted stock unit awards with time-based vesting is based on the intrinsic value of the awards at the date of grant, as the awards have a purchase price of $0.01 per share.

We also issue stock option grants or restricted stock unit awards with vesting based on market conditions, specifically our stock price and performance conditions, generally using adjusted EBITDA. The fair values and derived service periods for all grants that include vesting based on market conditions are estimated using the Monte Carlo valuation method. For stock option grants that include vesting based on performance conditions, the fair values are estimated using the Black-Scholes option pricing model. For restricted stock unit awards that include vesting based on performance conditions, the fair values are estimated based on the intrinsic values of the awards at the date of grant, as the awards have a purchase price of $0.01 per share.



	Total Shares		Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Options outstanding at January 1, 2019	891,892		$8.46
Granted	—		$—
Exercised	(70,006	)	$7.39
Forfeited or canceled	(256,886	)	$10.70
Options outstanding at December 31, 2019	565,000		$7.57	1.17	$571
Options vested at December 31, 2019 or expected to vest	565,000		$7.57	1.17	$571
Options exercisable at December 31, 2019	565,000		$7.57	1.17	$571

No options were granted during the years ended December 31, 2019, 2018, and 2017. The cash received from stock options exercised during the year ended December 31, 2019 was $0.5 million. No stock options were exercised during 2018 and 2017.



	Non-Vested Restricted Stock Units
	Total Shares		Weighted- Average Grant-Date Fair Value	Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Non-vested at January 1, 2019	2,944,819		$4.91
Granted	1,731,579		$7.28
Vested	(1,658,270	)	$4.89
Forfeited	(375,930	)	$5.42
Non-vested at December 31, 2019	2,642,198		$6.40	0.95	$22,644
Expected to vest	2,642,198		$6.40	0.95	$22,644

The weighted-average grant date fair value of restricted stock units granted during the years ended December 31, 2019, 2018, and 2017 was $7.28, $5.01, and $4.63, respectively. The total weighted-average fair value of restricted stock units vested during the years ended December 31, 2019, 2018, and 2017 was $8.1 million, $3.9 million, and $5.7 million, respectively.

On February 27, 2008, the Board approved our Second Amended and Restated 1996 Employee Stock Purchase Plan (the “ESPP”). On May 27, 2008 our stockholders approved an increase of the number of shares of our common stock authorized for issuance under the ESPP from 1,700,000 to 2,500,000 shares. In May 2018, we registered an aggregate of 650,000 of our shares of $0.01 par value per share common stock, which have been authorized and reserved for issuance under the ESPP.

The ESPP offers our shares for purchase at a price equal to 85% of the closing price on the applicable offering period termination date. Shares issued under the ESPP are considered compensatory. Accordingly, we are required to measure fair value and record compensation expense for share purchase rights granted under the ESPP. In July 2015, the Board of Directors approved an amendment to the ESPP to change the subscription period from three to six months and accordingly to adjust the payroll cap to $5,000 per plan period. A total of 580,932 shares remained available for issuance under the ESPP at December 31, 2019.

We use the Black-Scholes option pricing model to calculate the fair value of shares issued under the ESPP. The Black-Scholes model relies on a number of key assumptions to calculate estimated fair values. The following table sets forth the weighted-average key assumptions and fair value results for shares issued under the ESPP during the years ended December 31, 2019, 2018, and 2017:



	Year Ended December 31,
	2019	2018	2017
Expected dividend yield	0.00%	0.00%	0.00%
Risk-free interest rate	2.37%	1.85%	0.83%
Expected volatility	48.6%	55.3%	62.0%
Expected life (in years)	0.49	0.50	0.49
Weighted-average fair value of shares issued (per share)	$1.04	$0.94	$0.86

We did not realize a material tax benefit from the tax deductions for stock option exercises, vested restricted stock units and shares issued under the ESPP during the years ended December 31, 2019, 2018, or 2017.

Stock-based compensation was included in the following captions in our consolidated statements of operations for the years ended December 31, 2019, 2018, and 2017, respectively (in thousands):



	Year Ended December 31,
	2019		2018		2017
Cost of products revenues	$	343	$	128	$	53
Cost of service revenues	274		194		189
Research and development expenses	1,068		667		694
Marketing and selling expenses	1,797		1,540		1,944
General and administrative expenses	4,476		3,729		5,431
Total	$	7,958	$	6,258	$	8,311

At December 31, 2019, there was $11.8 million of total unrecognized compensation cost related to non-vested stock-based compensation awards granted under our stock-based compensation plans. We expect this amount to be amortized approximately as follows: $6.5 million in 2020, $4.2 million in 2021, and $1.1 million in 2022. At December 31, 2019, the weighted-average recognition period of the unrecognized compensation cost was approximately 1.1 years.