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Stock-Based Compensation
 6 Months Ended
Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
Stock-based compensation expense for each employee and director is presented in the same income statement caption as their cash compensation. Stock-based compensation expense by income statement caption and the related income tax benefit were as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In thousands)
2014
 
2013
 
2014
 
2013
Cost of sales
$
4

 
$
—

 
$
8

 
$
—

Research and development
100

 
55

 
201

 
112

Selling, general and administrative:
 
 
 
 
 
 
 
Employees
1,253

 
1,149

 
2,611

 
2,258

Outside directors
216

 
96

 
431

 
191

Total stock-based compensation expense
$
1,573

 
$
1,300


$
3,251


$
2,561

 
 
 
 
 
 
 
 
Income tax benefit
$
454

 
$
383

 
$
944

 
$
742



Stock Options

Stock option activity was as follows:
 
Number of Options
(in 000's)
 
Weighted-Average Exercise Price
 
Weighted-Average Remaining Contractual Terms
(in years)
 
Aggregate Intrinsic Value
(in 000's)
Outstanding at December 31, 2013
924

 
$
22.04

 
 
 
 
Granted
133

 
35.28

 
 
 
 
Exercised
(242
)
 
19.25

 
 
 
$
5,534

Forfeited/canceled/expired
(15
)
 
21.09

 
 
 
 
Outstanding at June 30, 2014 (1)
800

 
$
22.86

 
6.09
 
$
20,825

Vested and expected to vest at June 30, 2014 (1)
800

 
$
22.87

 
6.09
 
$
20,799

Exercisable on June 30, 2014 (1)
514

 
$
24.12

 
5.29
 
$
12,721

(1) 
The aggregate intrinsic value represents the total pre-tax value (the difference between our closing stock price on the last trading day of the second quarter of 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on June 30, 2014. This amount will change based on the fair market value of our stock.
The assumptions we utilized in the Black-Scholes option pricing model and the resulting weighted average fair value of stock option grants were the following:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Weighted average fair value of grants (1)
$
—

 
$
10.04

 
$
13.64

 
$
9.26

Risk-free interest rate
—
%
 
0.73
%
 
1.29
%
 
0.95
%
Expected volatility
—
%
 
52.38
%
 
44.84
%
 
53.39
%
Expected life in years
0.00

 
5.20

 
4.56

 
5.20


(1) 
The weighted average fair value of grants was calculated utilizing the stock options granted during each respective period.
As of June 30, 2014, we expect to recognize $2.9 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 2.1 years.
Restricted Stock
Non-vested restricted stock award activity was as follows:
 
Shares Granted
(in 000’s)
 
Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2013
285

 
$
24.64

Granted
52

 
35.28

Vested
(65
)
 
24.20

Forfeited
(3
)
 
37.78

Non-vested at June 30, 2014
269

 
$
26.63


As of June 30, 2014, we expect to recognize $5.7 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 2.2 years.