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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-Based Compensation | Share-Based Compensation The Company maintains two share-based compensation plans for executives, non-employee directors and certain key employees that authorize the granting of stock options, restricted stock, performance share units, and other types of awards consistent with the purpose of the plans. The number of shares authorized for issuance under the Company’s plans as of December 31, 2016 totaled 15.6 million, of which 5.4 million shares were available for future issuance. The Company’s policy is to recognize compensation cost on a straight-line basis, assuming forfeitures, over the requisite service period for the entire award. Stock Options Stock options granted under IDEX plans are generally non-qualified and are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. The majority of the options issued to employees become exercisable in four equal installments, beginning one year from the date of grant, and generally expire 10 years from the date of grant. Stock options granted to non-employee directors cliff vest after one year. Weighted average option fair values and assumptions for the period are as follows:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Weighted average fair value of grants | $18.56 |  | $20.32 |  | $19.52
Dividend yield | 1.69% |  | 1.45% |  | 1.27%
Volatility | 29.70% |  | 29.90% |  | 30.36%
Risk-free interest rate | 0.53% - 2.49% |  | 0.24% - 2.82% |  | 0.12% - 4.65%
Expected life (in years) | 5.91 |  | 5.93 |  | 5.89
The assumptions are as follows:
• | The Company estimated volatility using its historical share price performance over the contractual term of the option.
• | The Company uses historical data to estimate the expected life of the option. The expected life assumption for the years ended December 31, 2016, 2015 and 2014 is an output of the Binomial lattice option-pricing model, which incorporates vesting provisions, rate of voluntary exercise and rate of post-vesting termination over the contractual life of the option to define expected employee behavior.
• | The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option. For the years ended December 31, 2016, 2015 and 2014, we present the range of risk-free one-year forward rates, derived from the U.S. treasury yield curve, utilized in the Binomial lattice option-pricing model.
• | The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.
A summary of the Company’s stock option activity as of December 31, 2016, and changes during the year ended December 31, 2016 is presented as follows:
Stock Options | Shares |  | Weighted Average Price |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value
Outstanding at January 1, 2016 | 2,266,433 |  |  | $ | 54.05 |  |  | 6.58 |  | $ | 51,918,028 |
Granted | 570,250 |  |  | 75.35 |  |  |  |  |
Exercised | (675,525 | ) |  | 44.44 |  |  |  |  |
Forfeited/Expired | (173,212 | ) |  | 72.30 |  |  |  |  |
Outstanding at December 31, 2016 | 1,987,946 |  |  | $ | 61.83 |  |  | 6.84 |  | $ | 56,144,876 |
Vested and expected to vest at December 31, 2016 | 1,884,401 |  |  | $ | 61.06 |  |  | 6.74 |  | $ | 54,671,036 |
Exercisable at December 31, 2016 | 945,265 |  |  | $ | 48.53 |  |  | 5.17 |  | $ | 39,252,480 |
The intrinsic value for stock options outstanding and exercisable is defined as the difference between the market value of the Company’s common stock as of the end of the period and the grant price. The total intrinsic value of options exercised in 2016, 2015 and 2014 was $26.5 million, $16.9 million and $20.0 million, respectively. In 2016, 2015 and 2014, cash received from options exercised was $30.2 million, $19.2 million and $17.2 million, respectively, while the actual tax benefit realized for the tax deductions from stock options exercised totaled $9.6 million, $6.1 million and $7.3 million, respectively. Total compensation cost for stock options is recorded in the Consolidated Statements of Operations as follows:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
| (In thousands)
Cost of goods sold | $ | 427 |  |  | $ | 543 |  |  | $ | 581 |
Selling, general and administrative expenses | 6,561 |  |  | 6,488 |  |  | 6,245 |
Total expense before income taxes | 6,988 |  |  | 7,031 |  |  | 6,826 |
Income tax benefit | (2,213 | ) |  | (2,208 | ) |  | (2,194 | )
Total expense after income taxes | $ | 4,775 |  |  | $ | 4,823 |  |  | $ | 4,632 |
As of December 31, 2016 there was $10.8 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.4 years. Restricted Stock Restricted stock awards generally cliff vest after three years for employees and non-employee directors. Unvested restricted stock carries dividend and voting rights and the sale of the shares is restricted prior to the date of vesting. Dividends are paid on restricted stock awards and their fair value is equal to the market price of the Company’s stock at the date of the grant. A summary of the Company’s restricted stock activity as of December 31, 2016, and changes during the year ending December 31, 2016 is as follows:
Restricted Stock | Shares |  | Weighted-Average Grant Date Fair Value
Unvested at January 1, 2016 | 272,755 |  |  | $ | 65.90 |
Granted | 76,970 |  |  | 78.86 |
Vested | (105,382 | ) |  | 51.90 |
Forfeited | (26,445 | ) |  | 74.61 |
Unvested at December 31, 2016 | 217,898 |  |  | $ | 76.19 |
Total compensation cost for restricted stock is recorded in the Consolidated Statements of Operations as follows:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
| (In thousands)
Cost of goods sold | $ | 390 |  |  | $ | 341 |  |  | $ | 369 |
Selling, general and administrative expenses | 4,401 |  |  | 5,213 |  |  | 6,182 |
Total expense before income taxes | 4,791 |  |  | 5,554 |  |  | 6,551 |
Income tax benefit | (1,410 | ) |  | (1,604 | ) |  | (1,630 | )
Total expense after income taxes | $ | 3,381 |  |  | $ | 3,950 |  |  | $ | 4,921 |
As of December 31, 2016 there was $5.3 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 1.1 years. Cash-Settled Restricted Stock The Company also maintains a cash-settled share based compensation plan for certain employees. Cash-settled restricted stock awards generally cliff vest after three years. Dividend equivalents are paid on certain cash-settled restricted stock awards. A summary of the Company’s unvested cash-settled restricted stock activity as of December 31, 2016, and changes during the year ending December 31, 2016 is as follows:
Cash-Settled Restricted Stock | Shares |  | Weighted-Average Fair Value
Unvested at January 1, 2016 | 110,860 |  |  | $ | 76.61 |
Granted | 41,060 |  |  | 90.06 |
Vested | (36,660 | ) |  | 72.91 |
Forfeited | (11,470 | ) |  | 90.06 |
Unvested at December 31, 2016 | 103,790 |  |  | $ | 90.06 |
Total compensation cost for cash-settled restricted stock is recorded in the Consolidated Statements of Operations as follows:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
| (In thousands)
Cost of goods sold | $ | 764 |  |  | $ | 753 |  |  | $ | 1,384 |
Selling, general and administrative expenses | 2,224 |  |  | 1,765 |  |  | 2,735 |
Total expense before income taxes | 2,988 |  |  | 2,518 |  |  | 4,119 |
Income tax benefit | (419 | ) |  | (355 | ) |  | (603 | )
Total expense after income taxes | $ | 2,569 |  |  | $ | 2,163 |  |  | $ | 3,516 |
At December 31, 2016 and 2015, the Company has $3.0 million and $3.2 million, respectively, included in Accrued expenses in the Consolidated Balance Sheets and $2.4 million and $1.8 million, respectively, included in Other non-current liabilities. Performance Share Units Beginning in 2013 the Company granted performance share units to selected key employees that may be earned based on IDEX total shareholder return over the three-year period following the date of grant. Performance share units are expected to be made annually and are paid out at the end of a three-year period based on the Company’s performance. Performance is measured by determining the percentile rank of the total shareholder return of IDEX common stock in relation to the total shareholder return of the S&P Midcap 400 Industrial Group (for awards granted prior to 2016) or the Russell Midcap Index (for awards granted in 2016) for the three-year period following the date of grant. The payment of awards following the three-year award period will be based on performance achieved in accordance with the scale set forth in the plan agreement and may range from 0 percent to 250 percent of the initial grant. A target payout of 100 percent is earned if total shareholder return is equal to the 50 th percentile of the peer group. Performance share units earn dividend equivalents for the award period, which will be paid to participants with the award payout at the end of the period based on the actual number of performance share units that are earned. Payments made at the end of the award period will be in the form of stock for performance share units and will be in cash for dividend equivalents. The Company’s performance share awards are considered performance condition awards and the grant date fair value of the awards, based on a Monte Carlo simulation model, is expensed ratably over the three-year term of the awards. The Company granted approximately 0.1 million of performance share units in each of 2016, 2015 and 2014. Weighted average performance share unit fair values and assumptions for the period specified are as follows:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Weighted average fair value of grants | $111.42 |  | $95.07 |  | $94.55
Dividend yield | —% |  | —% |  | —%
Volatility | 17.99% |  | 19.14% |  | 26.41%
Risk-free interest rate | 0.89% |  | 1.01% |  | 0.65%
Expected life (in years) | 2.86 |  | 2.86 |  | 2.88
The assumptions are as follows:
• | The Company estimated volatility using its historical share price performance over the remaining performance period as of the grant date.
• | The Company uses a Monte Carlo simulation model that uses an expected life commensurate with the performance period. As a result, the expected life of the performance share units was assumed to be the period from the grant date to the end of the performance period.
• | The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with a term commensurate with the remaining performance period.
• | Total Shareholder Return is determined assuming that dividends are reinvested in the issuing entity over the performance period, which is mathematically equivalent to utilizing a 0% dividend yield.
A summary of the Company’s performance share unit activity as of December 31, 2016, and changes during the year ending December 31, 2016 is as follows:
Performance Share Units | Shares |  | Weighted-Average Grant Date Fair Value
Unvested at January 1, 2016 | 146,275 |  |  | $ | 94.80 |
Granted | 85,130 |  |  | 111.42 |
Vested | (63,325 | ) |  | 94.55 |
Forfeited | (31,025 | ) |  | 99.52 |
Unvested at December 31, 2016 | 137,055 |  |  | $ | 104.18 |
Awards that vested in 2016 will result in 89,288 shares being issued in 2017. Total compensation cost for performance share units is as follows:
| Years Ended December 31,
| 2016 |  | 2015 |  | 2014
| (In thousands)
Cost of goods sold | $ | — |  |  | $ | — |  |  | $ | — |
Selling, general and administrative expenses | 5,559 |  |  | 4,946 |  |  | 3,220 |
Total expense before income taxes | 5,559 |  |  | 4,946 |  |  | 3,220 |
Income tax benefit | (1,859 | ) |  | (1,670 | ) |  | (1,081 | )
Total expense after income taxes | $ | 3,700 |  |  | $ | 3,276 |  |  | $ | 2,139 |
As of December 31, 2016 there was $6.3 million of total unrecognized compensation cost related to performance shares that is expected to be recognized over a weighted-average period of 1.0 year.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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