Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation expense for each employee and director is presented in the same statement of operations caption as their cash compensation. Stock-based compensation expense by statement of operations caption and the related income tax benefit were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019
Cost of sales	$	36	$	37	$	146	$	102
Research and development expenses	287		315		811		809
Selling, general and administrative expenses:
Employees	1,555		1,866		4,695		5,005
Outside directors	382		309		1,202		802
Total employee and director stock-based compensation expense	$	2,260	$	2,527	$	6,854	$	6,718
Income tax benefit	$	494	$	509	$	1,500	$	1,385

Stock Options

Stock option activity was as follows:

	Number of Options (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2019	745	$	41.73
Granted	109	46.17
Exercised	—	—			$	—
Forfeited/canceled/expired	—	—
Outstanding at September 30, 2020 (1)	854	$	42.29	3.63	$	3,853
Vested and expected to vest at September 30, 2020 (1)	854	$	42.29	3.63	$	3,853
Exercisable at September 30, 2020 (1)	634	$	43.04	2.75	$	3,048

(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 third quarter of 2020 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 September 30, 2020. 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 September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Weighted average fair value of grants	$	—		$	—		$	17.70		$	10.28
Risk-free interest rate	—		%	—		%	1.44		%	2.49		%
Expected volatility	—		%	—		%	43.95		%	41.64		%
Expected life in years	0.00			0.00			4.59			4.54

As of September 30, 2020, we expect to recognize $2.7 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 thousands)	Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2019	310	$	34.99
Granted	235	36.83
Vested	(150)	38.09
Forfeited	(6)	44.31
Non-vested at September 30, 2020	389	$	34.75

As of September 30, 2020, we expect to recognize $10.2 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 1.9 years.