Share-Based Compensation

6 Months Ended

Jun. 30, 2013

Share Based Compensation [Abstract]

Share-Based Compensation [TextBlock]

NOTE J – Share-Based Compensation

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				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Cost of sales	$	126	$	102	$	249	$	205
Selling and administrative expense		2,877		3,121		5,720		6,247
Research and development expense		301		316		591		632
Total share-based compensation expense	$	3,304	$	3,539	$	6,560	$	7,084

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-Merton option pricing model.

In May 2013, the Company's stockholders approved the Company's 2013 Equity Incentive Plan (“2013 Plan”). Since the approval of the 2013 Plan, all stock options have been granted under the 2013 Plan, and the Company will not grant any further stock options under its 2001 Omnibus Equity Incentive Plan (“2001 Plan”). Stock options under the 2013 Plan expire eight years after the grant date. For additional information on the 2013 Plan, see the Company's definitive Proxy Statement filed with the SEC on April 19, 2013.

The total net cash proceeds received from stock option exercises during the six months ended June 30, 2013 was approximately $1 million. Stock option expense was approximately $1 million for both the three months ended June 30, 2013 and 2012, and approximately $2 million for both the six months ended June 30, 2013 and 2012.

A summary of the stock option plans is as follows:

Stock Options	Shares (000)		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (yrs)		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2013	3,713	$	17.85	5	$	9,744
Granted	186		23.35
Exercised	(192)		7.34			3,072
Forfeited or expired (1)	(417)		20.34
Outstanding at June 30, 2013	3,290	$	18.45	5	$	26,149
Exercisable at June 30, 2013	2,640	$	17.45	4	$	23,467

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• The Compensation Committee of the Board of Directors reviewed the grants of stock options to the Company's Chief Executive Officer in 2009, 2010, 2011 and 2012 (each such annual grant, an “Option Grant”), and approved a Confirmation Agreement in which the Company and the Company's Chief Executive Officer agreed and confirmed that the Company's Chief Executive Officer will assert no claim that any Option Grant in 2009, 2010, 2011 or 2012 provided for the purchase of more than 100,000 shares of the Company's Common Stock, and that each Option Grant document be deemed amended to reflect the foregoing 100,000 share limitation.

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 June 30, 2013, total unrecognized share-based compensation expense related to unvested stock options, net of forfeitures, was approximately $12 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.

Since the approval of the 2013 Plan, all share grants have been grantedunder the 2013 Plan, and the Company will not grant any further share grants under its 2001 Plan.

The total fair value of restricted stock awards vested during the six months ended June 30, 2013 was approximately$3million. Share grant expense for both the three months ended June 30, 2013 and 2012 was approximately $2 million, and share grant expense for both the six months ended June 30, 2013 and 2012 was approximately $5 million.

A summary of the Company's non-vested share grants is as follows:

Share Grants	Shares (000)		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value ($000)
Non-vested at January 1, 2013	1164	$	20.42	$
Granted	224		23.10
Vested	(129)		20.46		2,636
Forfeited	(26)		20.68
Non-vested at June 30, 2013	1233	$	20.94	$	25,809

As of June 30, 2013, total unrecognized share-based compensation expense related to non-vested stock awards, net of forfeitures, was approximately $20 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2years.