11. STOCKHOLDERS’ EQUITY

Stock Repurchase Program

On February 23, 2017, the Company announced that the Company’s Board of Directors authorized the repurchase of up to $100.0 million of the Company’s outstanding common stock. During the three months ended March 31, 2017, the Company repurchased $65.0 million of its common stock, or 1.6 million shares at an average cost of $39.81 per share. As of March 31, 2017, $6.2 million of the stock repurchases had not yet settled and the Company has reflected a liability for this amount. The Company has $35.0 million remaining authorized under the stock repurchase program as of March 31, 2017.

Equity-Based Compensation Plans

As of March 31, 2017, $100.3 million of unrecognized compensation costs related to unvested stock options, restricted stock units (RSUs) and performance share units (PSUs) are expected to be recognized over a remaining weighted average period of 1.7 years. There were no significant capitalized equity-based compensation costs at March 31, 2017.

The following table shows a summary of the equity-based compensation expense included in the Condensed Consolidated Statements of Operations and Comprehensive Income:

	Three Months Ended
	March 31,
	2017		2016
Selling, general and administrative	$	7,159	$	6,716
Cost of sales		1,197		1,192
Research and development		1,056		927
Total equity-based compensation expense	$	9,412	$	8,835

Stock Options

Stock options are awards that allow the recipient to purchase shares of the Company’s common stock at a fixed price. Stock options are granted at an exercise price equal to the Company’s stock price at the date of grant. These awards generally vest over one to three years following the grant date and have a contractual term of ten years.

The following table summarizes the stock option activity (in thousands, except per share data):

	Shares			Weighted Average Option Exercise Price Per Share		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Options outstanding at December 31, 2016		5,497		$	10.33
Granted		481		$	37.97
Exercised		(536	)	$	11.09
Forfeited		(38	)	$	20.19
Options outstanding at March 31, 2017		5,404		$	12.65		4.9	$	157,063
Options exercisable at March 31, 2017		4,453		$	8.32		4.0	$	148,694
Options expected to vest at March 31, 2017		951		$	32.91		9.1	$	8,369

The exercise prices of outstanding options at March 31, 2017 were in the following ranges:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Shares (in thousands)		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price Per Share		Shares (in thousands)		Weighted Average Exercise Price Per Share
$2.96 to $5.35		360		2.0	$	2.96		360	$	2.96
$5.36 to $5.67		133		4.9	$	5.57		133	$	5.57
$5.68 to $8.54		2,568		3.8	$	5.74		2,568	$	5.74
$8.55 to $8.90		903		3.2	$	8.59		903	$	8.59
$8.91 to $23.00		207		6.9	$	22.89		207	$	22.89
$23.01 to $37.97		1,233		8.9	$	31.86		282	$	28.33
$2.96 to $37.97		5,404		4.9	$	12.65		4,453	$	8.32

The Company uses the Black-Scholes model to estimate the fair value of stock option awards at the date of grant. Key inputs and assumptions used in the model include the grant date fair value of common stock, exercise price of the award, the expected option term, stock price volatility, the risk-free interest rate and the Company’s projected dividend yield. The risk-free interest rate reflects the yield on zero-coupon U.S. treasury securities with a term equal to the option’s expected term. The expected life represents the period over which the Company’s employees are expected to hold their options. Expected volatility is derived based on the historical Company volatility, as well as volatilities from publicly traded companies operating in the Company’s industry. The Company’s projected dividend yield is zero. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in estimating the fair values of its stock options. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards. Subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company.

The following table presents the weighted average assumptions used to estimate the fair value of stock option awards granted during the three months ended March 31, 2017 and 2016.

	Three Months Ended
	March 31,
	2017			2016
Expected option term (in years)		6.0			6.0
Risk-free interest rate		2.0	%		1.4	%
Expected volatility		40.0	%		50.0	%
Weighted average exercise price	$	37.97		$	24.94
Weighted average fair value at grant date	$	15.71		$	12.03

Restricted Stock Units

RSUs entitle the holder to shares of common stock after a vesting period that generally ranges from one to three years. The fair value of the awards is determined on the grant date based on the Company’s stock price.

The following table summarizes the RSU activity (in thousands, except per share data):

	Restricted Stock Units			Weighted Average Grant Date Fair Value Per Share
Non-vested RSUs at December 31, 2016		2,519		$	26.37
Granted		1,092		$	37.96
Vested and shares issued		(1,056	)	$	25.98
Forfeited		(60	)	$	24.62
Non-vested RSUs at March 31, 2017		2,495		$	31.65

Performance Share Units

PSUs are stock awards in which the number of shares ultimately received by the employee depends on Company performance against specified targets. Such awards typically vest over three years and the number of shares issued can vary from 0% to 150% of the number of PSUs granted, depending on performance. The fair value of each PSU is determined on the date of grant based on the Company’s stock price. The ultimate number of shares issued and the related compensation cost recognized will be based on the final performance metrics compared to the targets specified in the grants.

The following table summarizes the PSU activity (in thousands, except per share data):

	Performance Share Units			Weighted Average Grant Date Fair Value Per Share
Non-vested PSUs at December 31, 2016		445		$	26.68
Granted		199		$	37.97
Vested and shares issued		(64	)	$	30.76
Forfeited		(9	)	$	24.94
Non-vested PSUs at March 31, 2017		571		$	30.19