NOTE 6 – Share-Based Compensation

The table below sets forth the line items where share-based compensation expense was recorded

	Three Months Ended
	March 31,
	2018		2017
Cost of goods sold	$	90	$	158
Selling, general and administrative		5,454		3,304
Research and development		736		669
Total share-based compensation expense	$	6,280	$	4,131

The table below sets forth share-based compensation expense by type:

	Three Months Ended
	March 31,
	2018		2017
Stock options	$	191	$	298
Share grants		6,089		3,833
Total share-based compensation expense	$	6,280	$	4,131

Stock Options. Approximately $0.9 million in cash proceeds was received from stock option exercises during the three months ended March 31, 2018.

As of March 31, 2018, total unrecognized share-based compensation expense related to unvested stock options was approximately $0.1 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. Our Chief Executive Officer had a grant of 600,000 performance-based stock units that vested upon the Company reaching $1.0 billion in revenue. Based on the Company reaching approximately $1.1 billion in revenue in 2017, our Chief Executive Officer’s grant of 600,000 performance-based stock units were released to the Chief Executive Officer, upon filing of the Company’s Annual Report on Form 10-K, in February 2018. The expense related to the 600,000 performance-based units was all recognized in previous periods. During the three months ended March 31, 2018, we issued 292,800 stock awards. This was primarily made up of the annual grant for officers and directors.

As of March 31, 2018, total unrecognized share-based compensation expense related to share grants was approximately $16.0 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.3 years.

Stock Modification. During the three months ended March 31, 2018 we modified previously granted stock option and stock awards for two corporate officers who retired. The result of the modification was the acceleration of the vesting of 7,500 stock options and 79,720 stock awards for the corporate officers. The incremental expense recorded for this modification was approximately $1.8 million, which was expensed in SG&A in the three months ended March 31, 2018.