Stock-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

7.   Stock-Based Compensation

The compensation cost that has been included in the Consolidated Statements of Operations for all stock-based compensation arrangements was as follows: 

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015
Sales, marketing and administrative expense	$	7,415		$	5,446		$	11,846		$	12,723
Research and development expense		397			373			406			632
Cost of goods sold		53			63			105			138
Stock-based compensation expense before taxes		7,865			5,882			12,357			13,493
Related income tax benefits		(3,146	)		(2,353	)		(4,943	)		(5,397	)
Stock-based compensation expense, net of taxes	$	4,719		$	3,529		$	7,414		$	8,096

At June 30, 2016, there was $57.3 million of unamortized compensation expense for restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”) to be recognized over a weighted average period of 2.5 years.

Stock Options and Purchase Rights

The weighted average assumptions used to estimate the fair value of stock purchase rights under the employee stock purchase plan (“ESPP”) are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
ESPP
Volatility		31	%		42	%		31	%		43	%
Expected term (years)		0.5			1.3			0.6			1.3
Risk free interest rate		0.4	%		0.2	%		0.3	%		0.2	%
Expected dividend yield		—	%		—	%		—	%		—	%

Under the terms of the ESPP, shareowners can elect to have up to 15% of their annual compensation, up to a maximum of $21,250 per year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85% of the lower of the fair market value per share (at closing) of the Company’s common stock on (i) the commencement date of the two-year or six-month offering period (depending on the purchase period enrolled), or (ii) the respective purchase date.

The Company has not granted any options since 2011. The Company issued approximately 1.3 million and 1.4 million shares of common stock, before net share settlement, upon the exercise of outstanding stock options during the three and six months ended June 30, 2016, respectively, and issued approximately 3.3 million shares of common stock upon the exercise of outstanding stock options during the year ended December 31, 2015.

Restricted Stock Units

The Company issued approximately 0.1 million and 0.8 million shares of common stock, before net share settlement, upon vesting of RSUs (including PRSUs) during the three and six months ended June 30, 2016, respectively, and issued approximately 1.4 million shares of common stock in settlement of RSUs (including PRSUs) upon their vesting during the year ended December 31, 2015.

Assumed Equity Incentive Plan

In connection with the acquisition of Ellipse Technologies in February 2016 (see Note 5 to the Unaudited Consolidated Financial Statements), the Company assumed the Ellipse Technologies, Inc. 2015 Incentive Award Plan and the shares thereunder, subject to an equity exchange adjustment, for future awards by the Company.