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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation STOCK-BASED COMPENSATION
Stock-based compensation is included in the following financial statement captions: 
 Year Ended December 31,
 201920182017
Cost of sales$9,249  $6,535  $5,863  
Sales and marketing3,815  2,550  2,041  
Research and development7,690  6,410  5,001  
General and administrative12,824  12,532  10,116  
Total stock-based compensation33,578  28,027  23,021  
Tax benefit recognized(5,114) (6,632) (7,367) 
Net stock-based compensation$28,464  $21,395  $15,654  
Incentive Plans — In February 2006, the Company's board of directors adopted the 2006 Incentive Compensation Plan (the "2006 Plan"), which provides for the issuance of stock options, restricted stock units, performance stock units, other equity-based awards and cash awards to the Company's directors, employees, consultants and advisors. In June 2006, the Company's board of directors adopted the Non-Employee Directors Stock Plan (the "Directors Plan") for non-employee directors, which was subsequently merged into the 2006 Plan. A total of 10,363,465 shares are reserved under the 2006 Plan. At December 31, 2019, 3,172,643 shares of the Company's stock were available for future grant under the 2006 Plan. The Company may grant stock options only at an exercise price equal to or greater than the fair market value of its common stock on the date of grant. Equity awards generally become exercisable over periods of one to four years and generally expire ten years after the date of the grant. The vesting of awards under the 2006 Plan accelerate following the occurrence of certain change of control events, if the participant's employment is terminated within two years without cause or if the successor entity does not agree to assume existing awards or replace with equivalent value awards. Awards granted to non-employee directors automatically become exercisable upon a change of control. All shares issued under the 2006 Plan and Directors Plan are registered shares, newly issued by the Company.
The Company grants performance stock units to executive officers. The performance stock unit agreements provide for the award of performance stock units with each unit representing the right to receive one share of the Company's common stock to be issued after the applicable award vesting period. The final number of units awarded, if any, for these performance grants will be determined as of the vesting dates, based upon the Company's total shareholder return over the performance period compared to the Russell 3000 Index for those awards granted prior to 2019 or compared to the S&P 1500 Composite / Electronic Equipment Instruments & Components Index for awards granted in 2019 and could range from between 0% and 200% of the amount of awarded units.
The assumptions used in the Black-Scholes model for the calculation of compensation were as follows for the years ended December 31:
201920182017
Expected term
4.3 - 5.1 years
4.1 - 4.9 years
3.8 - 5.0 years
Volatility
37% - 38%
31% - 36%
31% - 35%
Risk-free rate of return
1.66% - 2.55%
2.54% - 3.01%
1.57% - 1.97%
Dividend yield0.25%  0.25%  0.25%  
Forfeiture rate—%  —%  —%  
The following table summarizes the option activity for the years ended December 31:
Number of
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
   (In years)(In thousands)
Outstanding — January 1, 20172,064,253  $60.65  
Granted293,284  124.57  
Exercised(546,931) 50.50  
Forfeited(13,113) 90.81  
Outstanding — December 31, 20171,797,493  73.95  6.02$251,970  
Granted257,111  232.26  
Exercised(282,720) 58.94  
Forfeited(24,810) 131.36  
Outstanding — December 31, 20181,747,074  98.93  5.80$58,084  
Granted334,740  153.78  
Exercised(192,533) 56.58  
Forfeited(46,839) 149.64  
Outstanding — December 31, 20191,842,442  $112.03  5.73$85,110  
Unvested — December 31, 2019797,960  $149.66  7.96$14,576  
Exercisable — December 31, 20191,044,482  $83.29  4.02$70,534  
The intrinsic value of the options exercised during the years ended December 31, 2019, 2018 and 2017, was $17,891, $51,266 and $50,131, respectively. The weighted-average grant fair value per share for options granted during the years ended December 31, 2019, 2018 and 2017, was $53.52, $71.06 and $38.01, respectively. The total compensation cost related to non-vested awards not yet recorded at December 31, 2019 was $25,517 which is expected to be recognized over a weighted-average of 2.6 years.
The following table summarizes the restricted stock units ("RSU's") activity for the years ended December 31:
Number of
Shares
Weighted-Average Grant-Date Fair Value
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
   (In years)(In thousands)
Outstanding — January 1, 2017366,770  $79.72  
Granted106,764  127.29  
Vested(90,385) 66.18  
Canceled(4,888) 90.54  
Outstanding — December 31, 2017378,261  96.23  2.55$80,997  
Granted80,254  227.45  
Vested(97,997) 91.62  
Canceled(9,497) 121.37  
Outstanding — December 31, 2018351,021  126.93  2.62$39,767  
Granted120,090  151.94  
Vested(147,606) 120.58  
Canceled(16,667) 139.73  
Outstanding — December 31, 2019306,838  $139.09  2.57$44,467  
The intrinsic value of the RSU's that vested during the years ended December 31, 2019, 2018 and 2017, was $22,638, $22,978 and $11,684, respectively. The weighted-average grant fair value per share for RSU's granted during the years ended December 31, 2019, 2018 and 2017, was $151.94, $227.45 and $127.29, respectively. The total compensation cost related to non-vested awards not yet recorded at December 31, 2019 was $26,231 which is expected to be recognized over a weighted-average of 2.6 years. The aggregate fair value of awards vested during the year ended December 31, 2019 was $17,799.
The weighted-average fair value of the performance units was determined using the Monte Carlo simulation model incorporating the following weighted-average assumptions:
201920182017
Performance term3.0 years3.0 years3.0 years
Volatility
18% - 40%
13% - 32%
13% - 31%
Risk-free rate of return2.48%  2.41%  1.49%  
Dividend yield—%  —%  —%  
Weighted-average fair value per share$192.46  $284.78  $147.25  
The following table summarizes the performance stock units ("PSU's") activity for the years ended December 31:
Number of
Shares
Weighted-Average Grant-Date Fair Value
Weighted-
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
   (In years)(In thousands)
Outstanding — January 1, 201754,505  $108.51  
Granted21,444  147.25  
Vested—  
Canceled—  
Outstanding — December 31, 201775,949  119.45  1.93$16,263  
Granted33,706  238.12  
Vested—  
Canceled—  
Outstanding — December 31, 2017109,655  146.96  1.77$12,423  
Granted34,989  190.83  
Vested(43,594) 128.54  
Canceled(1,208) 228.68  
Outstanding — December 31, 201999,842  $162.34  1.84$14,469  
PSU's are included at 100% of target goal. The intrinsic value of the PSU's vested during the year ended December 31, 2019 was $6,830. The total compensation cost related to nonvested awards not yet recorded at December 31, 2019 was $5,833 which is expected to be recognized over a weighted average of 1.8 years. The aggregate fair value of awards vested during the year ended December 31, 2019 was $5,604.