Share-Based Compensation

3 Months Ended

Mar. 31, 2015

Share Based Compensation [Abstract]

Share-Based Compensation

NOTE F – 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
	March 31,
	2015		2014
Cost of goods sold	$	123	$	96
Selling, general and administrative		3,205		2,850
Research and development		352		273
Total share-based compensation expense	$	3,680	$	3,219

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

The total net cash proceeds received from stock option exercises during the three months ended March 31, 2015 was approximately $6 million. Stock option expense was approximately $1 million for both the three months ended March 31, 2015 and 2014.

A summary of the stock option grants 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, 2015		2,736		$	21.26		4	$	17,840
Granted		-			-
Exercised		(368	)		15.36				5,279
Forfeited or expired		-			-
Outstanding at March 31, 2015		2,368		$	22.18		4	$	15,276
Exercisable at March 31,  2015		1,840		$	21.51		3	$	13,094

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 our closing stock price.

As of March 31, 2015, total unrecognized share-based compensation expense related to unvested stock options, net of forfeitures, was approximately $5 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2 years.

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

Share grant expense for the three months ended March 31, 2015 and 2014 was approximately $3 million and $2 million, respectively.

A summary of our 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, 2015		1,535		$	23.32	$	42,324
Granted		4			27.35
Vested		(5	)		24.70		134
Forfeited		(9	)		25.93
Non-vested at March 31, 2015		1,525		$	23.67	$	43,544

As of March 31, 2015, total unrecognized share-based compensation expense related to non-vested stock awards, net of forfeitures, was approximately $17 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2 years.