SHARE-BASED COMPENSATION

The Company recognizes the grant date fair value of each stock option and restricted stock award over its vesting period. Stock options and restricted stock awards are granted under the Company’s Second Amended and Restated 2002 Equity Incentive Plan (the “2002 Plan”) and generally vest over a three or four year period and have a term of 10 years.

Impax Laboratories, Inc. 1999 Equity Incentive Plan ("1999 Plan")

The aggregate number of shares of common stock authorized for issuance pursuant to the Company’s 1999 Plan is 5,000,000 shares. There were 938 and 10,938 stock options outstanding at March 31, 2016 and December 31, 2015, respectively, under the 1999 Plan.

Impax Laboratories, Inc. Second Amended and Restated 2002 Equity Incentive Plan ("2002 Plan")

The aggregate number of shares of common stock authorized for issuance pursuant to the Company's 2002 Plan is 14,950,000 shares. There were 2,479,249 and 2,394,433 stock options outstanding at March 31, 2016 and December 31, 2015, respectively, and 2,153,083 and 2,146,498 non-vested restricted stock awards outstanding at March 31, 2016 and December 31, 2015, respectively, under the 2002 Plan.

The stock option activity for all of the Company’s equity compensation plans noted above is summarized as follows:



Stock Options	Number of Shares Under Option		Weighted- Average Exercise Price per Share
Outstanding at December 31, 2015	2,405,371		$	21.39
Options granted	426,390		$	13.10
Options exercised	(351,574	)	$	20.95
Options forfeited	—		$	—
Outstanding at March 31, 2016	2,480,187		$	23.50
Options exercisable at March 31, 2016	1,376,812		$	16.35

As of March 31, 2016, stock options outstanding and exercisable had average remaining contractual lives of 7.71 years and 5.58 years, respectively. Also, as of March 31, 2016, stock options outstanding and exercisable each had aggregate intrinsic values of $26.1 million and $22.3 million, respectively, and restricted stock awards outstanding had an aggregate intrinsic value of $68.9 million. As of March 31, 2016, the Company estimated there were 2,195,692 stock options and 1,906,109 restricted shares granted to employees which were vested or expected to vest.

The Company grants restricted stock to certain eligible employees as a component of its long-term incentive compensation program. The restricted stock award grants are made in accordance with the Company’s 2002 Plan and are issued and outstanding at the time of grant but are subject to forfeiture if the vesting conditions are not met. A summary of the non-vested restricted stock awards is as follows:



Restricted Stock Awards	Number of Restricted Stock Awards		Weighted- Average Grant Date Fair Value
Non-vested at December 31, 2015	2,146,498		$	33.20
Granted	186,264		$	33.42
Vested	(72,690	)	$	35.67
Forfeited	(106,989	)	$	32.49
Non-vested at March 31, 2016	2,153,083		$	33.17

Included in the 72,690 shares of restricted stock vested during the three months ended March 31, 2016 are 27,206 shares with a weighted-average fair value of $36.89 per share that were withheld for minimum withholding tax purposes upon vesting of such awards from stockholders who elected to net share settle such tax withholding obligation.

As of March 31, 2016, the Company had 1,405,039 shares available for issuance of either stock options or restricted stock awards, including 1,036,675 shares from the 2002 Plan, 296,921 shares from the 1999 Plan, and 71,443 shares from the 2001 Non-Qualified Employee Stock Purchase Plan (“ESPP”) Plan.

As of March 31, 2016, the Company had total unrecognized share-based compensation expense, net of estimated forfeitures, of $65.5 million related to all of its share-based awards, which will be recognized over a weighted average period of 2.1 years. The intrinsic value of options exercised during the three months ended March 31, 2016 and 2015 was $4.0 million and $4.2 million, respectively. The total fair value of restricted shares which vested during the three months ended March 31, 2016 and 2015 was $2.6 million and $0.6 million, respectively.

The Company estimated the fair value of each stock option award on the grant date using the Black-Scholes option pricing model, wherein expected volatility is based on historical volatility of the Company’s common stock. The expected term calculation is based on the “simplified” method described in SAB No. 107, Share-Based Payment and SAB No. 110, Share-Based Payment, as the result of the simplified method provides a reasonable estimate in comparison to actual experience. The risk-free interest rate is based on the U.S. Treasury yield at the date of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield of zero is based on the fact that the Company has never paid cash dividends on its common stock, and has no present intention to pay cash dividends. Options granted under each of the above plans generally vest from three to four years and have a term of 10 years.

The amount of share-based compensation expense recognized by the Company is as follows (in thousands):



	Three Months Ended March 31,
	2016		2015
Manufacturing expenses	$	1,368	$	1,046
Research and development	1,340		1,365
Selling, general and administrative	4,570		4,077
Total	$	7,278	$	6,488