5. STOCK-BASED COMPENSATION

The following table summarizes the stock-based compensation expense related to stock options, performance stock units (PSUs), restricted stock units (RSUs) and restricted stock for the three months ended March 31, 2017 and 2016, which was recognized as follows:

	Three Months Ended
	March 31,
(In thousands)	2017			2016
Stock-based compensation expense included in cost of sales	$	91		$	99
Selling, general and administrative expense		1,016			769
Research and development expense		776			690
Stock-based compensation expense included in operating expenses		1,792			1,459
Total stock-based compensation expense		1,883			1,558
Tax benefit for expense associated with non-qualified options		(380	)		(212	)
Total stock-based compensation expense, net of tax	$	1,503		$	1,346

Stock Options

The following table is a summary of our stock options outstanding as of December 31, 2016 and March 31, 2017 and the changes that occurred during the three months ended March 31, 2017:

(In thousands, except per share amounts)	Number of Options			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life In Years		Aggregate Intrinsic Value
Options outstanding, December 31, 2016		6,338		$	22.14		5.63	$	16,972
Options granted		—		$	—
Options exercised		(82	)	$	16.84
Options forfeited		(12	)	$	17.84
Options expired		(16	)	$	26.18
Options outstanding, March 31, 2017		6,228		$	22.21		5.38	$	11,692
Options vested and expected to vest, March 31, 2017		6,228		$	22.21		5.38	$	11,692
Options exercisable, March 31, 2017		4,660		$	23.78		4.47	$	6,111

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the closing price of our stock on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2017. The aggregate intrinsic value will change based on the fair market value of our stock.

The total pre-tax intrinsic value of options exercised during the three months ended March 31, 2017 was $0.4 million.

As of March 31, 2017, there was $6.3 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over an average remaining recognition period of 2.0 years.

The fair value of our stock options is estimated using the Black-Scholes model. The determination of the fair value of stock options on the date of grant using the Black-Scholes model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables that may have a significant impact on the fair value estimate.

There were no options granted during the three months ended March 31, 2017 or 2016.

PSUs, RSUs and restricted stock

The following table is a summary of our PSUs, RSUs and restricted stock outstanding as of December 31, 2016 and the changes that occurred during the three months ended March 31, 2017:

(In thousands, except per share amounts)	Number of Shares			Weighted Avg. Grant Date Fair Value
Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2016		519		$	20.51
PSUs, RSUs and restricted stock granted		518		$	22.25
PSUs, RSUs and restricted stock vested		(2	)	$	18.29
PSUs, RSUs and restricted stock forfeited		(2	)	$	20.00
Unvested PSUs, RSUs and restricted stock outstanding, March 31, 2017		1,033		$	21.39

The fair value of our PSUs with market conditions is calculated using a Monte Carlo Simulation valuation method. The fair value of RSUs and restricted stock is equal to the closing price of our stock on the date of grant. During the first quarter of 2017, the Compensation Committee of the Board of Directors approved a PSU grant of 0.5 million shares that contain performance conditions. The fair value of these performance-based PSU awards was equal to the closing price of our stock on the date of grant.

As of March 31, 2017, there was $8.8 million of unrecognized compensation expense related to unvested market-based PSUs, RSUs and restricted stock, which is expected to be recognized over an average remaining recognition period of 3.2 years. In addition, there was $11.5 million of unrecognized compensation expense related to unvested performance-based PSUs, which will be recognized over the requisite service period of three years as achievement of the performance objective becomes probable. For the three months ended March 31, 2017, no compensation expense was recognized related to these performance-based PSU awards.