Stock-based Compensation

Stock-based compensation expense recognized in the Consolidated Statements of Income are as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of goods sold	$	679	$	672	$	1,974	$	1,902
Research and development	1,371		1,388		3,951		3,675
Selling, general and administrative	4,752		5,288		15,486		15,096
Restructuring expenses	—		—		2,595		—
Stock-based compensation expense	$	6,802	$	7,348	$	24,006	$	20,673

Stock-based compensation costs capitalized in inventory are as follows (in thousands):



	September 30,
	2014		2013
Capitalized in inventory	$	665	$	789

As of September 30, 2014, the Company had $41.9 million of total unrecognized stock-based compensation costs, net of estimated forfeitures, to be recognized over a weighted average period of 1.9 years.


Note 2.	Stock-based Compensation - (Continued)

The fair value of the stock-based awards granted in the three and nine months ended September 30, 2014 and 2013 was estimated with the following weighted-average assumptions:



	Three Months Ended September 30,			Nine Months Ended September 30,
	2014	2013		2014		2013
Stock option awards:
Risk-free interest rate	—	0.6	%	0.9	%	0.3	%
Expected dividend yield	—	1.1	%	1.2	%	1.5	%
Expected term	—	4.5 years		4.3 years		4.3 years
Expected volatility	—	31.4	%	28.7	%	33.7	%
Employee stock purchase plan:
Risk-free interest rate	—	—		0.5	%	0.1	%
Expected dividend yield	—	—		1.2	%	1.5	%
Expected term	—	—		6 months		6 months
Expected volatility	—	—		28.2	%	25.0	%

The weighted average fair value of stock-based compensation awards granted and vested and the intrinsic value of options exercised during the period were (in thousands, except per share amounts):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Stock Option Awards:
Weighted average grant date fair value per share	$	—	$	7.65	$	7.32	$	5.92
Total fair value of awards granted	$	—	$	278	$	4,446	$	6,095
Total fair value of awards vested	$	—	$	33	$	4,662	$	5,059
Total intrinsic value of options exercised	$	4,884	$	1,910	$	26,217	$	3,748
Restricted Stock Unit Awards:
Weighted average grant date fair value per share	$	—	$	31.30	$	32.85	$	23.91
Total fair value of awards granted	$	—	$	2,427	$	21,830	$	28,063
Total fair value of awards vested	$	287	$	222	$	28,049	$	13,541
Employee Stock Purchase Plan:
Weighted average grant date fair value per share	$	—	$	—	$	7.87	$	5.25
Total fair value of shares estimated to be issued	$	—	$	—	$	591	$	552

The total amount of cash received from the exercise of stock options in the three months ended September 30, 2014 and 2013 was $5.2 million and $2.0 million, respectively, and the related tax impact realized from the exercise of the stock options was a benefit of $1.5 million and $0.4 million, respectively. The total amount of cash received from the exercise of stock options in the nine months ended September 30, 2014 and 2013 was $33.3 million and $3.7 million, respectively, and the related tax impact realized from the exercise of the stock options was a benefit of $8.5 million and $0.3 million, respectively.


Note 2.	Stock-based Compensation - (Continued)

Information with respect to stock option activity is as follows:



	Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2013	7,338		$	22.38	4.6
Granted	608		33.86
Exercised	(1,735	)	19.19
Forfeited	(83	)	29.95
Outstanding at September 30, 2014	6,128		$	24.32	4.7	$	47,251
Exercisable at September 30, 2014	4,949		$	23.36	3.8	$	42,453
Vested and expected to vest at September 30, 2014	6,069		$	24.28	4.7	$	47,011

Information with respect to restricted stock unit activity is as follows:



	Shares (in thousands)		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013	2,788		$	21.16
Granted	665		32.85
Vested and distributed	(815	)	34.36
Forfeited	(162	)	22.56
Outstanding at September 30, 2014	2,476		$	26.49

During the nine months ended September 30, 2014 and 2013, the Company granted approximately 665,000 and 1,167,000 time-vested restricted stock units, respectively. The fair value of time-vested restricted stock units is fixed and determined on the date of grant based upon the Company's stock price on the date of grant. The weighted average fair values per share of the time-vested restricted stock units granted during the nine months ended September 30, 2014 and 2013 were $32.85 and $23.96, respectively.

During the nine months ended September 30, 2013, the Company also granted approximately 7,000 market-based restricted stock units. These units may be earned based upon the Company's total shareholder return compared to the total shareholder return of the S&P 500 Index over a three year period. The fair value per share of the market-based restricted stock units granted during the nine months ended September 30, 2013 was $15.87. There were no market-based restricted stock units granted during the three or nine months ended September 30, 2014.

There were 85,000 shares issued under the 2011 Employee Stock Purchase Plan ("ESPP") during the nine months ended September 30, 2014 and 3,545,000 shares remain available under the ESPP at September 30, 2014 for future issuance. Shares issued for ESPP purchases are newly issued shares.