Stock-Based Compensation

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company allocates stock-based compensation expense related to equity plans for employees and non-employee directors among cost of sales, research and development and other engineering expense, selling expense, or general and administrative expense based on the job functions performed by the employees to whom the stock-based compensation is awarded. During the three months ended March 31,2018 and 2017, the Company recognized stock-based compensation expense related to its equity plans for employees of $3.1 million and $8.0 million, respectively. Stock-based compensation cost capitalized in inventory was immaterial for all periods presented.

On February 15, 2018, the Company granted 176,882 restricted stock units ("RSUs") to the Company's employees, including officers, at an estimated weighted average fair value of $54.97 per share, based on the closing price of the Company's common stock on February 14, 2018 of $57.16, adjusted for certain market factors, and to a lesser extent, the present value of dividends. The RSUs granted to the Company's employees may be time-based, performance-based or time- and performance-based. Certain of the performance-based RSUs are granted to officers and key employees, where the number of performance-based awards to be issued is based on the achievement of certain Company performance criteria established in the RSU agreement over a cumulative three year period. These awards cliff vest after three years. In addition, these same officers and key employees also receive time-based RSUs, which vest pursuant to a three-year graded vesting schedule. Time- and performance based RSUs are granted to the Company's employees excluding officers and certain key employees, vest ratably over the four year life of the award, and require the underlying shares of the Company's common stock to be subject to a performance-based adjustment during the first year.

On April 24, 2018, the Company awarded 1,475 fully vested shares to each of the Company's eight non-employee directors (11,800 shares in total) at an estimated fair value of $55.34 per share based on the closing price on April 24, 2018.

As of March 31,2018, the aggregate unamortized stock compensation expense was approximately $16.9 million, which is entirely attributable to unvested RSUs and is expected to be recognized in expense over a weighted-average period of 2.5 years.