Capital Stock and Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Share-Based Compensation Expense Recorded In Operating Income

The table below summarizes share-based compensation expense recorded in operating income (in thousands):

	Year Ended December 31,
	2018		2017		2016
Selling, general and administrative	$	6,997	$	5,065	$	3,920
Research and development and engineering		438		221		117
Cost of revenue		211		207		256
Restructuring, acquisition and divestiture related costs		68		—		—
Total share-based compensation expense	$	7,714	$	5,493	$	4,293

Fair Value of TSR Performance-Based Restricted Stock Units Estimated Using Monte-Carol Valuation Model

The fair value of the TSR-PSUs at the date of grant was estimated using the Monte-Carlo valuation model with the following assumptions:

	Year Ended December 31, 2018
Grant-date stock price	$	53.85
Expected volatility		30.35	%
Risk-free interest rate		2.37	%
Expected annual dividend yield		—
Weighted average fair value	$	70.49

2010 Incentive Award Plan

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Restricted Stock Issued and Outstanding

The table below summarizes activities relating to restricted and deferred stock units issued and outstanding under the Amended and Restated 2010 Incentive Plan during 2018:

	Restricted and Deferred Stock Units (In thousands)			Weighted Average Grant Date Fair Value		Weighted Average Remaining Vesting Period (in years)	Aggregate Intrinsic Value (1) (In thousands)
Unvested at December 31, 2017		614		$	18.35
Granted		130		$	55.27
Vested		(188	)	$	18.77
Forfeited		(27	)	$	24.53
Unvested at December 31, 2018		529		$	26.98	1.59 years	$	33,308
Expected to vest as of December 31, 2018		509		$	26.31	1.59 years	$	32,041

(1) The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 due to the fact that the restricted stock units carry a $0 purchase price.

Performance Stock Units Issued and Outstanding

The number of common shares to be issued upon settlement following vesting of the TSR-PSUs is determined based on the relative market performance of the Company’s common stock compared to the Russell 2000 Index over the three-year performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes the related compensation expense based on the fair value of the TSR-PSUs, determined using Monte-Carlo valuation model as of the grant date, on a straight-line basis from the grant date to the end of the three-year performance period. Compensation expense will not be affected by the number of TSR-PSUs that will actually vest at the end of the three-year performance period.

The table below summarizes activities relating to performance-based stock awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during 2018:

	Performance Stock Units (1) (in thousands)		Weighted Average Grant Date Fair Value		Weighted Average Remaining Vesting Period (in years)	Aggregate Intrinsic Value (2) (in thousands)
Unvested at December 31, 2017		89	$	24.00
Granted		48	$	62.17
Vested		—	$	—
Forfeited		—	$	—
Unvested at December 31, 2018		137	$	37.28	1.14 years	$	8,645
Expected to vest as of December 31, 2018		167	$	33.21	1.14 years	$	10,491

(1) The unvested PSUs are shown in this table at target, except for the number of shares vested, which reflect the shares earned and number of shares expected to vest. As of December 31, 2018, the maximum number of PSUs available to be earned is approximately 274 thousand.

(2) The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 due to the fact that the performance stock units carry a $0 purchase price.

Stock Options Outstanding, Exercisable and Expected to Vest

The following table shows stock options that were outstanding, exercisable and expected to vest as of December 31, 2018 and the related weighted average exercise price, weighted average remaining contractual term and aggregate intrinsic value

	Number of Shares (In thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (1) (In thousands)
Stock options outstanding		103	$	14.13		7.25	$	5,027
Stock options exercisable		69	$	14.13		7.25	$	3,351
Stock options expected to vest		34	$	14.13		7.25	$	1,676

(1) The aggregate intrinsic value is calculated as the difference between the closing market price of $63.00 per share of the Company’s common stock on December 31, 2018 and the exercise price of the stock options.