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Stock-Based Compensation
 6 Months Ended
Jun. 30, 2017
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)
2017
 
2016
 
2017
 
2016
Cost of sales
$
19

 
$
15

 
$
34

 
$
29

Research and development expenses
144

 
137

 
263

 
273

Selling, general and administrative expenses:
 
 
 
 
 
 
 
Employees
1,975

 
1,731

 
3,719

 
3,576

Outside directors
794

 
594

 
1,539

 
1,092

Total employee and director stock-based compensation expense
$
2,932


$
2,477


$
5,555


$
4,970

 
 
 
 
 
 
 
 
Income tax benefit
$
889

 
$
736

 
1,704

 
1,469



Stock Options

Stock option activity was as follows:
 
Number of Options
(in 000's)
 
Weighted-Average Exercise Price
 
Weighted-Average Remaining Contractual Term
(in years)
 
Aggregate Intrinsic Value
(in 000's)
Outstanding at December 31, 2016
652

 
$
39.27

 
 
 
 
Granted
92

 
62.70

 
 
 
 
Exercised
(35
)
 
24.41

 
 
 
$
1,555

Forfeited/canceled/expired
(18
)
 
28.08

 
 
 
 
Outstanding at June 30, 2017 (1)
691

 
$
43.41

 
4.88
 
$
16,207

Vested and expected to vest at June 30, 2017 (1)
691

 
$
43.41

 
4.88
 
$
16,204

Exercisable at June 30, 2017 (1)
424

 
$
35.97

 
4.25
 
$
13,092

(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 2017 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, 2017. 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,
 
2017
 
2016
 
2017
 
2016
Weighted average fair value of grants
$
—

 
$
—

 
$
19.61

 
$
17.96

Risk-free interest rate
—
%
 
—
%
 
1.75
%
 
1.36
%
Expected volatility
—
%
 
—
%
 
34.25
%
 
41.38
%
Expected life in years
0.00

 
0.00

 
4.52

 
4.55


As of June 30, 2017, we expect to recognize $4.3 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 1.9 years.
Restricted Stock
Non-vested restricted stock award activity was as follows:
 
Shares
(in 000's)
 
Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2016
153

 
$
57.43

Granted
99

 
63.40

Vested
(43
)
 
59.64

Forfeited
(4
)
 
60.64

Non-vested at June 30, 2017
205

 
$
59.78


As of June 30, 2017, we expect to recognize $9.6 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 2.0 years.