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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation | Stock-Based Compensation Stock Option Plans The Company’s share-based payments that result in compensation expense consist of stock option grants and restricted stock awards. As of December 31, 2015, the Company had 9,844,051 shares available for grant. Stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date and generally vest over four years based upon continuous service and expire ten years from the grant date. Conditions of restricted stock awards may be based upon continuing employment and/or achievement of pre-established performance goals and objectives. Vesting for performance-based restricted stock awards and time-based restricted stock awards must be greater than one year and three years, respectively. The following table summarizes the Company’s stock option activity for the year ended December 31, 2015:
| Shares (in thousands) |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2014 | 6,812 |  |  | $ | 23.26 |  |  |  |  |
Granted | 1,519 |  |  | 41.00 |  |  |  |  |
Exercised | (1,520 | ) |  | 18.14 |  |  |  |  |
Forfeited or expired | (167 | ) |  | 31.94 |  |  |  |  |
Outstanding as of December 31, 2015 | 6,644 |  |  | $ | 28.27 |  |  | 7.11 |  | $ | 57,955 |
Exercisable as of December 31, 2015 | 2,596 |  |  | $ | 17.69 |  |  | 5.31 |  | $ | 43,597 |
Options vested or expected to vest at December 31, 2015 (1) | 6,065 |  |  | $ | 27.29 |  |  | 6.96 |  | $ | 57,291 |
(1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options. The fair values of stock options granted in each period presented were estimated using the following weighted-average assumptions:
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Risk-free rate | 2.1 | % |  | 2.6 | % |  | 2.0 | %
Expected dividend yield | 1.25 | % |  | — | % |  | — | %
Expected volatility | 40 | % |  | 41 | % |  | 42 | %
Expected term (in years) | 5.4 |  |  | 5.4 |  |  | 5.8 |
Risk-free rate The risk-free rate was based upon a treasury instrument whose term was consistent with the contractual term of the option. Expected dividend yield Generally, the current dividend yield is calculated by annualizing the cash dividend declared by the Company’s Board of Directors and dividing that result by the closing stock price on the grant date. However, in the fourth quarter of 2012, the Company paid the full annual dividends for 2013 and 2014 in advance, and therefore, the dividend yield for those years was adjusted to zero. A dividend yield of 1.25% was estimated for future periods from 2015 through the expected life of the option. Expected volatility The expected volatility was based upon a combination of historical volatility of the Company’s common stock over the contractual term of the option and implied volatility for traded options of the Company’s stock. Expected term The expected term was derived from the binomial lattice model from the impact of events that trigger exercises over time. The Company stratifies its employee population into two groups: one consisting of senior management and another consisting of all other employees. The Company currently expects that approximately 74% of its stock options granted to senior management and 73% of its options granted to all other employees will actually vest. Therefore, the Company currently applies an estimated forfeiture rate of 10% to all unvested options for senior management and a rate of 11% for all other employees. The Company revised its estimated forfeiture rates in the first quarter of 2015, 2014 and 2013, resulting in an increase to compensation expense of $461,000, $288,000, and $300,000 in 2015, 2014, and 2013, respectively. The weighted-average grant-date fair value of stock options granted was $14.35 in 2015, $15.97 in 2014, and $8.21 in 2013. The total intrinsic value of stock options exercised was $43,987,000 in 2015, $31,884,000 in 2014, and $32,096,000 in 2013. The total fair value of stock options vested was $16,227,000 in 2015, $11,627,000 in 2014, and $9,717,000 in 2013. As of December 31, 2015, total unrecognized compensation expense related to non-vested stock options was $18,785,000, which is expected to be recognized over a weighted-average period of 1.54 years. The following table summarizes the Company's restricted stock activity for the year ended December 31, 2015:
| Shares (in thousands) |  | Weighted-Average Grant Fair Value |  | Aggregate Intrinsic Value (in thousands) (1)
Nonvested as of December 31, 2014 | 20 |  |  | $ | 34.05 |  |  |
Granted | — |  |  | — |  |  |
Vested | — |  |  | — |  |  |
Forfeited or expired | — |  |  | — |  |  |
Nonvested as of December 31, 2015 | 20 |  |  | $ | 34.05 |  |  | $ | 675 |
(1) Fair market value as of December 31, 2015. The fair values of restricted stock awards granted were determined based upon the market value of the Company's common stock at the time of grant. The initial cost is then amortized over the period of vesting until the restrictions lapse. These restricted shares will be fully vested in 2018. Participants are entitled to dividends on restricted stock awards, but only receive those amounts if the shares vest. The sale or transfer of these shares is restricted during the vesting period. The total stock-based compensation expense and the related income tax benefit recognized was $21,274,000 and $7,127,000, respectively, in 2015, $15,158,000 and $4,977,000, respectively, in 2014, and $10,620,000 and $3,482,000, respectively, in 2013. No compensation expense was capitalized in 2015, 2014, or 2013. The following table presents the stock-based compensation expense by caption for each period presented on the Consolidated Statements of Operations (in thousands):
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Cost of revenue | $ | 1,515 |  |  | $ | 1,116 |  |  | $ | 820 |
Research, development, and engineering | 5,194 |  |  | 3,709 |  |  | 2,502 |
Selling, general, and administrative | 13,032 |  |  | 9,234 |  |  | 6,461 |
Discontinued operations | 1,533 |  |  | 1,099 |  |  | 837 |
| $ | 21,274 |  |  | $ | 15,158 |  |  | $ | 10,620 |
Upon the sale of the Company's Surface Inspection Systems Division, completed on July 6, 2015, the Company accelerated the vesting of stock options with respect to 190,000 underlying shares, resulting in an additional $1,106,000 of stock option expense recorded in the third quarter of 2015.

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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=6418621&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=51659978&loc=d3e25284-112666 Reference 3: 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 4: 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 5: 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 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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