Stock-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-based compensation expense for each employee and director is presented in the same statement of operations caption as their cash compensation. Stock-based compensation expense by statement of operations caption and the related income tax benefit were as follows:


	Three Months Ended March 31,
(In thousands)	2021		2020
Cost of sales	$	37	$	74
Research and development expenses	313		236
Selling, general and administrative expenses:
Employees	1,868		1,583
Outside directors	382		410
Total employee and director stock-based compensation expense	$	2,600	$	2,303

Income tax benefit	$	466	$	506

Stock Options

Stock option activity was as follows:


	Number of Options (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020	774	$	43.01
Granted	80	59.43
Exercised	(22)	44.39			$	253
Forfeited/canceled/expired	—	—
Outstanding at March 31, 2021 (1)	832	$	44.56	3.78	$	10,513
Vested and expected to vest at March 31, 2021 (1)	832	$	44.56	3.78	$	10,513
Exercisable at March 31, 2021 (1)	616	$	43.68	2.94	$	8,444

(1)The aggregate intrinsic value represents the total pre-tax value (the difference between our closing stock price on the last trading day of the first quarter of 2021 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on March 31, 2021. This amount will change based on the fair market value of our stock.

The assumptions we utilized in the Black-Scholes option pricing model and the resulting weighted average fair value of stock option grants were the following:


	Three Months Ended March 31,
	2021			2020
Weighted average fair value of grants	$	23.97		$	17.70
Risk-free interest rate	0.41		%	1.44		%
Expected volatility	48.49		%	43.95		%
Expected life in years	4.62			4.59

As of March 31, 2021, we expect to recognize $3.7 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 2.2 years.

Restricted Stock

Non-vested restricted stock award activity was as follows:


	Shares (in thousands)		Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2020	$	374	$	34.53
Granted	113		59.67
Vested	(160)		34.90
Forfeited	(1)		31.83
Non-vested at March 31, 2021	$	326	$	43.13

As of March 31, 2021, we expect to recognize $13.0 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 2.2 years.