The following table shows the total compensation expensed for share-based compensation plans, including stock options and share grants, recognized in the statements of operations (in thousands):

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
Cost of sales	$	112	$	87	$	287	$	262
Selling and administrative expense		3,259		2,824		9,088		8,510
Research and development expense		272		355		735		1,008

Total share-based compensation expense	$	3,643	$	3,266	$	10,110	$	9,780

Stock Options. Stock options generally vest in equal annual installments over a four-year period and expire ten years after the grant date, and expense was estimated on the date of grant using the Black-Scholes option pricing model.

The total net cash proceeds received from stock option exercises during the nine months ended September 30, 2011 was approximately $3 million. Stock option expense for both the three months ended September 30, 2011 and 2010 was approximately $1 million. Stock option expense for both the nine months ended September 30, 2011 and 2010 was approximately $3 million.

Stock Options	Shares (000)		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (yrs)		Aggregate Intrinsic Value ($000)

Outstanding at January 1, 2011	3,707	$	14.14	5	$	47,891
Granted	385		29.07
Exercised	(482)		7.04			11,007
Forfeited or expired	(6)		21.69
Outstanding at September 30, 2011	3,604	$	16.67	5	$	14,475
Exercisable at September 30, 2011	2,633	$	14.50	4	$	13,789

The aggregate intrinsic value in the table above is before applicable income taxes and represents the amount option holders would have received if all options had been exercised on the last business day of the period indicated, based on the Company's closing stock price.

As of September 30, 2011, total unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures, was approximately $11 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 3 years.

Share Grants. Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year period.

The total fair value of restricted stock awards vested during the nine months ended September 30, 2011 was $7 million. Share grant expense for both the three months ended September 30, 2011 and 2010 was approximately $2 million. Share grant expense for both the nine months ended September 30, 2011 and 2010 was approximately $7 million

Share Grants	Shares (000)		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value ($000)

Nonvested at January 1, 2011	774	$	16.16	$	12,479
Granted	367		27.55
Vested	(362)		20.10		7,267
Forfeited	(35)		19.74
Nonvested at September 30, 2011	744	$	19.83	$	14,742

As of September 30, 2011, total unrecognized share-based compensation expense related to non-vested stock awards, net of forfeitures, was approximately $25 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 3 years.