NOTE 15 STOCK‑BASED COMPENSATION

The Company issues stock options and restricted stock units to employees under Stock Awards Plans approved by shareholders. Stock options and restricted stock units are issued to non‑employee directors under Director Stock Option Plans and the Director Restricted Stock Unit Plan approved by shareholders. Options are awarded with the exercise price equal to the market price on the date of grant and generally become exercisable over three years and expire 10 years after grant. Restricted stock units granted to employees generally vest over three years.

Compensation expense recorded attributable to stock options for the year ended December 31, 2015 was approximately $17.9 million ($11.6 million after tax). The income tax benefit related to this compensation expense was approximately $6.3 million. Approximately $15.7 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. Compensation expense recorded attributable to stock options for the year ended December 31, 2014 was approximately $18.0 million ($11.7 million after tax). The income tax benefit related to this compensation expense was approximately $6.3 million. Approximately $16.0 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. Compensation expense recorded attributable to stock options for the year ended December 31, 2013 was approximately $13.7 million ($9.2 million after tax). The income tax benefit related to this compensation expense was approximately $4.5 million. Approximately $12.1 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales.

The Company uses historical data to estimate expected life and volatility. The weighted‑average fair value of stock options granted under the Stock Awards Plans was $12.83, $14.82 and $10.16 per share in 2015, 2014 and 2013, respectively. These values were estimated on the respective dates of grant using the Black‑Scholes option‑pricing model with the following weighted‑average assumptions:


Stock Awards Plans:	2015		2014		2013
Years ended December 31,
Dividend Yield	1.7	%	1.7	%	1.8	%
Expected Stock Price Volatility	21.9	%	22.2	%	22.7	%
Risk-free Interest Rate	1.6	%	2.3	%	1.3	%
Expected Life of Option (years)	6.9		6.9		6.9

There were no grants under the Director Stock Option Plan during 2015 as this plan was cancelled and replaced by the Director Restricted Stock Unit Plan. The fair value of stock options granted under the Director Stock Option Plan was $14.07 and $10.89 per share in 2014 and 2013, respectively. These values were estimated on the respective date of the grant using the Black‑Scholes option‑pricing model with the following weighted‑average assumptions:


Director Stock Option Plans:
Years ended December 31,	2014		2013
Dividend Yield	1.8	%	1.9	%
Expected Stock Price Volatility	22.2	%	23.0	%
Risk-free Interest Rate	2.2	%	1.3	%
Expected Life of Option (years)	6.9		6.9

A summary of option activity under the Company’s stock option plans as of December 31, 2015, and changes during the period then ended is presented below:


	Stock Awards Plans					Director Stock Option Plans
			Weighted Average				Weighted Average
		Options	Exercise Price			Options	Exercise Price
Outstanding, January 1, 2015		8,107,806	$	46.74		368,668	$	53.52
Granted		1,391,355		64.60		—		—
Exercised		(1,416,507)		37.15		(65,167)		41.93
Forfeited or expired		(50,624)		60.84		—		—
Outstanding at December 31, 2015		8,032,030	$	51.44		303,501	$	56.00
Exercisable at December 31, 2015		5,324,545	$	45.23		221,159	$	53.22
Weighted-Average Remaining Contractual Term (Years):
Outstanding at December 31, 2015		6.1				6.8
Exercisable at December 31, 2015		4.9				6.4
Aggregate Intrinsic Value:
Outstanding at December 31, 2015	$	170,340			$	5,052
Exercisable at December 31, 2015	$	145,978			$	4,297
Intrinsic Value of Options Exercised During the Years Ended:
December 31, 2015	$	43,041			$	1,478
December 31, 2014	$	33,059			$	741
December 31, 2013	$	37,822			$	732

The grant date fair value of options vested during the years ended December 31, 2015, 2014 and 2013 was $16.1 million, $14.1 million and $13.0 million, respectively. Cash received from option exercises was approximately $64.0 million and the actual tax benefit realized for the tax deduction from option exercises was approximately $12.5 million in the year ended December 31, 2015. As of December 31, 2015, the remaining valuation of stock option awards to be expensed in future periods was $12.8 million and the related weighted‑average period over which it is expected to be recognized is 1.3 years.

The fair value of restricted stock unit grants is the market price of the underlying shares on the grant date. A summary of restricted stock unit activity as of December 31, 2015, and changes during the period then ended is presented below:


				Director Restricted
	Stock Awards Plans			Stock Unit Plan
		Weighted Average			Weighted Average
	RSUs	Grant‑Date Fair Value		RSUs	Grant-Date Fair Value

Nonvested at January 1, 2015	61,750	$	64.09	—	$	—
Granted	17,957		67.96	18,857		63.10
Vested	(13,331)		56.75	—		—
Nonvested at December 31, 2015	66,376	$	66.61	18,857	$	63.10

Compensation expense recorded attributable to restricted stock unit grants for the years ended December 31, 2015, 2014 and 2013 was approximately $2.7 million, $1.8 million and $664 thousand, respectively. The fair value of units vested during the years ended December 31, 2015, 2014 and 2013 was $757 thousand, $614 thousand and $571 thousand, respectively. The intrinsic value of units vested during the years ended December 31, 2015, 2014 and 2013 was $877 thousand, $761 thousand and $661 thousand, respectively. As of December 31, 2015, there was $1.6 million of total unrecognized compensation cost relating to restricted stock unit awards which is expected to be recognized over a weighted average period of 1.3 years.

During the first quarter of 2014, the Company approved a new long-term incentive program for certain employees. Each award is based on the cumulative total stockholder return of our common stock during a three year performance period. Total expense related to this program is expected to be approximately $2.7 million over the performance period, of which $1.2 million and $530 thousand was recognized for the year ended December 31, 2015 and 2014, respectively.