Employee Benefits and Share-Based Compensation

Stock based plans

For a detailed explanation of the Company's stock plans and subsequent changes, please refer to Note 11, Employee Benefits and Stock-Based Compensation, of its Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 26, 2016.

Share-based compensation expense

The following table sets forth the total share-based compensation expense recognized in the Company's Condensed Consolidated Statements of Operations:



	Three months ended
	March 31, 2016		March 31, 2015
	(In thousands)
Cost of product and service revenues	$	549	$	517
Research and development	641		434
Selling, general and administrative	2,701		2,714
Total share-based compensation expense	$	3,891	$	3,665

The following weighted average assumptions are used to value stock options and Employee Stock Purchase Plan ("ESPP") shares issued pursuant to the Company's equity incentive plans for the three months ended March 31, 2016 and March 31, 2015:



	Three months ended
	March 31, 2016		March 31, 2015
	(In thousands, except percentages)
Stock Option Plans
Expected life, years	4.92		5.04
Expected volatility, %	32.6	%	33.2	%
Risk free interest rate, %	1.40	%	1.66	%
Estimated forfeiture rate %	8.6	%	2.5	%
Dividend yield, %	—	%	—	%



	Three months ended
	March 31, 2016		March 31, 2015
	(In thousands, except percentages)
Employee Stock Purchase Plan
Expected life, years	0.5-2.0		0.5-2.0
Expected volatility, %	25.79-34.79%		28.52-37.53%
Risk free interest rate, %	0.26-0.79%		0.03-0.53%
Dividend yield, %	—	%	—	%

Stock options activity

A summary of the stock options activity under the 2009 Plan is presented below:



	Number of Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Years	Aggregate Intrinsic Value⁽¹⁾
	(In thousands, except per share data)
Stock Options
Outstanding at December 31, 2015	2,688		$	22.89	6.9
Granted	376		27.75
Exercised	(49	)	13.48
Expired	(1	)	19.96
Forfeited	(38	)	28.51
Outstanding at March 31, 2016	2,976		$	23.59	7.0	$	15,891
Exercisable at March 31, 2016	1,478		$	18.53	5.0	$	14,329
Vested and expected to vest at March 31, 2016 and thereafter	2,790		$	23.23	6.9	$	15,806

_________________________________________________

The weighted-average fair value per share of options granted during the three months ended March 31, 2016, was $8.51, and the weighted-average fair value per share of options granted during the months ended March 31, 2015 was $9.82. The intrinsic value of options exercised during the three months ended March 31, 2016 and March 31, 2015 was $0.7 million and $2.4 million, respectively.

As of March 31, 2016, total unrecognized compensation cost related to unvested stock options was $11.3 million, which is expected to be recognized over a weighted-average vesting period of 3.1 years.

Restricted stock activity

Summaries of restricted stock activity under the 2009 Plan are presented below:



	Number of Shares		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Years	Aggregate Intrinsic Value
	(In thousands, except per share data)
Restricted Stock Units ("RSU")
Outstanding at December 31, 2015	417		$	28.49	1.6
Granted	90		27.77
Vested	(23	)	25.76
Forfeited	(7	)	28.42
Outstanding and unvested at March 31, 2016	477		$	28.49	1.5	$	13,292
Expected to vest after March 31, 2016	419		$	28.39	1.4	$	11,677

The weighted-average grant date fair value per share of RSU granted during the three months ended March 31, 2016 and March 31, 2015 was $27.77 and $33.97, respectively.

As of March 31, 2016, total unrecognized compensation expense related to RSUs was $10.7 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.8 years.



	Number of Shares	Weighted-Average Grant Date Fair Value
	(In thousands, except per share data)
Restricted Stock Awards ("RSA")
Outstanding at December 31, 2015	31	$	35.98
Granted	—	—
Vested	—	—
Forfeited	—	—
Outstanding and unvested at March 31, 2016	31	$	35.98

As of March 31, 2016, total unrecognized compensation cost related to RSAs was $0.1 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.2 years.

Performance-based restricted stock unit activity

A summary of the performance-based restricted stock activity under the Plan is presented below:



	Number of Shares		Weighted-Average Grant Date Fair Value Per Unit
	(In thousands, except per share data)
Performance-based Restricted Stock Units ("PSU")
Outstanding at December 31, 2015	151		$	23.33
Granted	123		24.66
Vested	(15	)	29.56
Forfeited	—		—
Outstanding and unvested at March 31, 2016	259		$	23.60

The weighted-average grant date fair value per share of PSUs granted during the three months ended March 31, 2016 and March 31, 2015 was $24.66 and $29.56, respectively. As of March 31, 2016, total unrecognized compensation cost related to PSUs was approximately $3.2 million, which is expected to be recognized over the remaining weighted-average period of 1.5 years.

Employee Stock Purchase Plan activity

As of March 31, 2016, the unrecognized compensation cost related to the shares to be purchased under the ESPP was approximately $7.1 million and is expected to be recognized over a weighted-average period of two years.

Summary of shares reserved for future issuance under equity incentive plans

The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of March 31, 2016:



	Number of Shares
	(In thousands)
Share options outstanding	2,976
Non-vested restricted share awards	767
Shares authorized for future issuance	3,017
ESPP shares available for future issuance	3,053
Total shares reserved for future issuance	9,813

During the three month period ended March 31 2016 and March 31, 2015, the Company did not repurchase any common stock outstanding.