Stock-based Compensation

9 Months Ended

Sep. 30, 2011

Stock-based Compensation

Note 2. Stock-based Compensation

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Cost of goods sold	$	941		$	969		$	2,462		$	2,836
Research and development		1,152			1,213			3,997			3,734
Selling, general and administrative		3,344			3,906			12,854			12,440
Stock-based compensation expense before income taxes		5,437			6,088			19,313			19,010
Income tax benefit		(1,574	)		(1,900	)		(5,565	)		(5,993	)
Total stock-based compensation expense after income taxes	$	3,863		$	4,188		$	13,748		$	13,017

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

	September 30,
	2011		2010
Stock-based compensation costs capitalized in inventory	$	795	$	682

As of September 30, 2011, the Company had $38.2 million of total unrecognized stock-based compensation costs, net of estimated forfeitures, to be recognized over a weighted average period of 2.0 years.

The fair value of the stock-based awards, as determined under the Black-Scholes model, granted in the three months and nine months ended September 30, 2011 and 2010 was estimated with the following weighted-average assumptions:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011			2010
Stock Option Awards:
Risk-free interest rate		—		—		1.0	%		1.55	%
Expected dividend yield		—		—		0.7	%		0.0	%
Expected term		—		—		4.3 years			4.3 years
Expected volatility		—		—		42.3	%		45.1	%
Employee Stock Purchase Plan:
Risk-free interest rate		—		—		0.1	%		0.3	%
Expected dividend yield		—		—		0.7	%		0.0	%
Expected term		—		—		6 months			6 months
Expected volatility		—		—		21.3	%		23.0	%

The 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,
	2011		2010		2011		2010
Stock Option Awards:
Weighted average grant date fair value per share	$	—	$	—	$	11.68	$	11.52
Total fair value of awards granted	$	—	$	—	$	4,513	$	7,299
Total fair value of awards vested	$	75	$	80	$	8,037	$	7,281
Total intrinsic value of options exercised	$	2,016	$	11,842	$	15,169	$	15,577
Restricted Stock Unit Awards:
Weighted average grant date fair value per share	$	27.43	$	30.31	$	34.41	$	30.14
Total fair value of awards granted	$	169	$	73	$	21,692	$	14,986
Total fair value of awards vested	$	165	$	413	$	19,098	$	15,763
Employee Stock Purchase Plan:
Weighted average grant date fair value per share	$	—	$	—	$	7.36	$	6.73
Total fair value of shares estimated to be issued	$	—	$	—	$	1,051	$	786

The total amount of cash received from the exercise of stock options and the related tax benefit realized from the exercise of the stock options were (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Total amount of cash received	$	804	$	5,632	$	11,055	$	9,020
Tax benefit realized	$	624	$	2,815	$	4,729	$	5,714

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, 2010		7,403		$	18.69		5.6
Granted		386			35.22
Exercised		(809	)		13.65
Forfeited		(65	)		26.19
Outstanding at September 30, 2011		6,915		$	20.14		5.1	$	46,890
Exercisable at September 30, 2011		5,888		$	18.42		4.5	$	46,571
Vested and expected to vest at September 30, 2011		6,864		$	20.06		4.5	$	46,874

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

	Shares (in  thousands)			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2010		1,351		$	28.54
Granted		630			34.41
Vested		(548	)		29.16
Forfeited		(79	)		29.64
Outstanding at September 30, 2011		1,354		$	28.31

Information with respect to the 2010 Employee Stock Purchase Plan is as follows:

	Shares (in  thousands)
Shares issued during the nine months ended September 30, 2011		171
Shares available for issuance at September 30, 2011		4,449