Share-Based Compensation

3 Months Ended

Mar. 31, 2017

Share Based Compensation [Abstract]

Share-Based Compensation

NOTE 6 – Share-Based Compensation

The table below sets forth the line items where share-based compensation expense was recorded for the three months ended March 31, 2017 and 2016:

	Three Months Ended
	March 31,
	2017		2016
Cost of goods sold	$	158	$	201
Selling, general and administrative		3,304		3,704
Research and development		669		614
Total share-based compensation expense	$	4,131	$	4,519

The table below sets forth share-based compensation expense by type for the three months ended March 31, 2017 and 2016:

	Three Months Ended
	March 31,
	2017		2016
Stock options	$	298	$	488
Share grants		3,833		4,031
Total share-based compensation expense	$	4,131	$	4,519

Stock Options. There was approximately $2.2 million in cash proceeds received from stock option exercises during the three months ended March 31, 2017.

As of March 31, 2017, total unrecognized share-based compensation expense related to unvested stock options was approximately $0.9 million, before income taxes, and is expected to be recognized over a weighted average period of less than 1 year.  

Share Grants. Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year period. We also have share grants that are performance based that vest upon achievement of certain performance criteria.  During the first quarter of 2017, the Company modified a previous performance-based award previously granted to our Chief Executive Officer.  The effect was to replace a performance-based grant covering 700,000 shares of the Company’s common stock with a performance-based grant covering 62,905 shares of the Company’s common stock and a restricted stock grant covering 62,905 of the Company’s common stock.  If certain performance criteria are met, Dr. Lu will receive 200% of the award or 125,810 shares.  The incremental expense if Dr. Lu received 200% of the PSU award is approximately $3.3 million.  The incremental expense of the restricted stock grant is approximately $1.7 million.

As of March 31, 2017, total unrecognized share-based compensation expense related to share grants was approximately $35.9 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.4 years.