SHARE INCENTIVE PLANS:

6 Months Ended

Jun. 30, 2015

NOTE 8 — SHARE INCENTIVE PLANS:

Share option and restricted share units activity

The following table summarizes the share option activity under the Company’s equity incentive plans during the six months ended June 30, 2015:

	Options Outstanding
	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2014	2,467,523		$	29.55
Options exercised	(256,675	)	15.15
Options cancelled	(32,981	)	74.52

Outstanding at June 30, 2015	2,177,867		$	30.56

The Company did not grant options during the six month period ended June 30, 2015. The total pretax intrinsic value of options exercised in the six months ended June 30, 2015 and 2014 was $8.6 million and $1.9 million, respectively. This intrinsic value represents the difference between the fair market value of the Company’s ordinary shares on the date of exercise and the exercise price of each option. Based on the closing price of the Company’s ordinary shares of $48.59 on June 30, 2015, the total pretax intrinsic value of all outstanding options was $54.2 million. The total pretax intrinsic value of exercisable options at June 30, 2015 was $53.2 million. The total pretax intrinsic value of exercisable options at December 31, 2014 was $50.1 million.

Restricted share units (“RSUs”) activity under the Company’s equity incentive plans for the six months ended June 30, 2015 is set forth below:

	Restricted Share Units Outstanding
	Number of Shares		Weighted Average Grant Date Fair Value
Non vested restricted share units at December 31, 2014	1,911,166		$	41.61
Restricted share units granted	1,072,355		46.15
Restricted share units vested	(485,806	)	46.35
Restricted share units canceled	(62,322	)	42.12

Non vested restricted share units at June 30, 2015	2,435,393		$	44.09

The weighted average fair value of RSUs granted in the six months ended June 30, 2015 and 2014 was $46.15 and $33.22, respectively. The total intrinsic value of all outstanding restricted share units was $118.3 million at June 30, 2015 and $81.7 million at December 31, 2014.

The Company had the following ordinary shares reserved for future issuance under its equity incentive plans at June 30, 2015:

		Number of Shares
Share options outstanding		2,177,867
Restricted share units outstanding		2,435,393
Shares authorized for future issuance		1,501,217
ESPP shares available for future issuance		686,486

Total shares reserved for future issuance at June 30, 2015		6,800,963

Share-based compensation

The following weighted average assumptions are used to value share options and ESPP shares issued pursuant to the Company’s equity incentive plans for the six months ended June 30, 2015 and 2014:

	Employee Share Options		Employee Share Purchase Plan
	Six Months Ended June 30,		Six Months Ended June 30,
	2015 *	2014	2015	2014
Dividend yield, %	—	—	—	—
Expected volatility, %	—	56.1	38.1	45.1
Risk free interest rate, %	—	1.98	0.09	0.06
Expected life, years	—	5.77	0.50	0.50
Estimated forfeiture rate, %	—	6.73	—	—

*No options were granted in the six months ended June 30, 2015.

The following table summarizes the distribution of total share-based compensation expense in the unaudited condensed consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(In thousands)
Cost of goods sold	$	610	$	532	$	1,157	$	1,054
Research and development	7,553		6,753		14,321		13,431
Sales and marketing	2,750		2,479		5,144		4,912
General and administrative	2,373		2,183		4,382		4,188

Total share-based compensation expense	$	13,286	$	11,947	$	25,004	$	23,585

At June 30, 2015, there was $94.1 million of total unrecognized share-based compensation costs related to non-vested share-based compensation arrangements. The costs are expected to be recognized over a weighted average period of 2.02 years. At December 31, 2014, there was $74.5 million of total unrecognized share-based compensation costs related to non-vested share-based compensation arrangements. The costs are expected to be recognized over a weighted average period of approximately 1.97 years.