For the three months ended September 30, 2023 and 2022, stock-based compensation expense was $4.2 million and $12.1 million, respectively, and for the nine months ended September 30, 2023 and 2022, stock-based compensation expense was $12.2 million and $15.9 million, respectively.

The following table summarizes the RSUs and restricted stock outstanding as of December 31, 2022 and September 30, 2023 and the changes that occurred during the nine months ended September 30, 2023:


	Number of Shares (in thousands)			Weighted Avg. Grant Date Fair Value (per share)
Unvested RSUs and restricted stock outstanding, December 31, 2022		1,086		$	17.54
RSUs and restricted stock granted		1,484		$	16.58
RSUs and restricted stock vested		(56	)	$	20.37
RSUs and restricted stock forfeited		(51	)	$	16.42
Unvested RSUs and restricted stock outstanding, September 30, 2023		2,463		$	17.01

During the nine months ended September 30, 2023, the Company granted 0.9 million performance-based PSUs to its executive officers and certain employees. The grant-date fair value of these performance-based awards was based on the closing price of the Company’s stock on the date of grant. These awards vest over either a two or three-year period, subject to the grantee’s continued employment, with the ability to earn shares in a range of 0% to either 100% or 150% of the awarded number of PSUs based on the achievement of defined performance targets. Equity-based compensation expense and liabilities with respect to these awards may be adjusted over the vesting period to reflect the probability of achievement of performance targets defined in the award agreements.

The fair value of RSUs and restricted stock is equal to the closing price of its 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, 2023, total unrecognized compensation expense related to non-vested market-based RSUs and restricted stock was approximately $19.1 million, which will be recognized over the remaining weighted-average period of 2.2 years. There was $11.3 million of unrecognized compensation expense related to unvested 2023 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.

As of September 30, 2023, 2.0 million shares were available for issuance under stockholder-approved equity plans.

The following table summarizes the ADTRAN Holdings, Inc. stock options outstanding as of December 31, 2022 and September 30, 2023 and the changes that occurred during the nine months ended September 30, 2023:


	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, 2022		3,148		$	14.37		3.42	$	16,251
Stock options granted		7		$	12.17
Stock options exercised		(8	)	$	8.72
Stock options forfeited		(40	)	$	11.93
Stock options expired		(33	)	$	16.44
Stock options outstanding, September 30, 2023		3,074		$	14.39		2.68	$	736
Stock options exercisable, September 30, 2023		1,691		$	15.88		1.23	$	556

As of September 30, 2023, there was $5.2 million of unrecognized compensation expense related to stock options which will be recognized over the remaining weighted-average period of 1.9 years.

Pursuant to the Business Combination, which closed on July 15, 2022, Adtran Networks stock option holders were entitled to have their Adtran Networks stock options assumed by ADTRAN Holdings, Inc. (applying the exchange ratio in the Business Combination Agreement), thereafter representing options to acquire stock of ADTRAN Holdings, Inc. The maximum number of shares of ADTRAN Holdings, Inc. stock potentially issuable upon such assumption was 2.3 million shares. The period in which such options could be assumed ended on July 22, 2022. A total of 2.1 million shares of ADTRAN Holdings, Inc. stock could be issued pursuant to the exercise of the assumed Adtran Networks options. The determination of the fair value of stock options assumed by ADTRAN Holdings, Inc. was estimated using the Monte Carlo method and is affected by its stock price, as well as assumptions regarding a number of complex and subjective variables that may have a significant impact on the fair value estimate. The stock option pricing model requires the use of several assumptions that impact the fair value estimate. These variables include, but are not limited to, the volatility of the Company's stock price and employee exercise behaviors.

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 the Company'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, 2023. The amount of aggregate intrinsic value was $0.7 million as of September 30, 2023, which will change based on the fair market value of the Company's stock. The total pre-tax intrinsic value of options exercised during the nine months ended September 30, 2023 was $50 thousand.

The following table summarizes the Adtran Networks stock options outstanding as of December 31, 2022 and September 30, 2023 and the changes that occurred during the nine months ended September 30, 2023:


	Number of Options (In thousands)			Weighted Average Exercise Price (Per share)		Weighted Avg. Remaining Contractual Life in Years		Aggregate Intrinsic Value (In thousands)
Stock options outstanding, December 31, 2022		81		$	8.58		4.00	$	1,222
Stock options exercised		(13	)	$	8.22
Stock options forfeited		(9	)	$	10.58
Stock options expired		(1	)	$	9.20
Stock options outstanding, September 30, 2023		58		$	8.18		3.39	$	746
Stock options exercisable, September 30, 2023		12		$	6.03		1.48	$	182

As of September 30, 2023, there was $0.1 million of unrecognized compensation expense related to Adtran Networks stock options which will be recognized over the remaining weighted-average period of 3.4 years.

All of the Adtran Networks options were previously issued at exercise prices that approximated fair market value at the date of grant.

The aggregate intrinsic value of Adtran Networks stock options represents the total pre-tax intrinsic value (the difference between Adtran Networks 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, 2023. The amount of aggregate intrinsic value was $0.7 million as of September 30, 2023 and will change based on the fair market value of Adtran Networks stock. The total pre-tax intrinsic value of Adtran Networks options exercised during the nine months ended September 30, 2023 was $0.2 million.