Stock-based Compensation

12 Months Ended

Dec. 31, 2014

Stock Incentive Plans

The Company has a stock-based compensation program that provides equity incentives for employees, consultants and directors. This program includes incentive and non-statutory stock options and nonvested stock awards (referred to as restricted stock unit awards) granted under three plans: the FLIR Systems, Inc. 1993 Stock Option Plan for Non-Employee Directors (the “1993 Plan”), the FLIR Systems, Inc. 2002 Stock Incentive Plan (the “2002 Plan”) and the FLIR Systems, Inc. 2011 Stock Incentive Plan (the “2011 Plan”). The Company has discontinued issuing awards out of the 1993 Plan and the 2002 Plan but previously granted awards under the 1993 Plan and the 2002 Plan remain outstanding.

The Company has granted time-based options, performance-based options, time-based restricted stock unit awards, performance-based restricted stock unit awards and market-based restricted stock unit awards. The vesting of performance-based options and restricted stock unit awards are contingent upon meeting certain diluted earnings per share growth targets primarily in three independent tranches over a three year period. The vesting of each tranche is not dependent on the other tranches. Options generally expire ten years from the grant date. Time-based options and restricted stock unit awards generally vest over a three year period. Market-based restricted stock unit awards may be earned based upon the Company's total shareholder return compared to the total shareholder return of the S&P 500 Index over a three year period.

Shares issued as a result of stock option exercises and the distribution of vested restricted stock units are new shares.

The Company also has stock options and restricted stock unit awards issued as replacement awards in connection with the acquisition of ICx Technologies in 2010.

Information with respect to stock option activity for 2014 is as follows:



	Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2013	7,338		$	22.38	4.6
Granted	668		33.74
Exercised	(2,362	)	18.72
Forfeited	(73	)	30.80
Outstanding at December 31, 2014	5,571		$	25.14	5.0	$	42,547
Exercisable at December 31, 2014	4,325		$	24.23	4.0	$	37,022
Vested and expected to vest at December 31, 2014	5,496		$	25.11	5.0	$	42,147


Note 15.	Stock-based Compensation - (Continued)

Stock Incentive Plans - (Continued)

Information with respect to restricted stock unit activity for 2014 is as follows:



	Shares (in thousands)		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013	2,788		$	21.16
Granted	685		32.80
Vested and distributed	(883	)	25.15
Forfeited	(176	)	23.67
Outstanding at December 31, 2014	2,414		$	22.83

As of December 31, 2014, there are 14,169,000 shares of common stock reserved for future issuance under the the stock incentive plans.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (the “ESPP”) which allows employees to purchase shares of the Company’s common stock at 85 percent of the fair market value at the lower of either the date of enrollment or the purchase date. The Company has reserved 5,000,000 shares of common stock for issuance under the ESPP.

There were 155,000 shares issued at the average purchase price of $26.10 during 2014 and 3,475,000 shares remain available under the ESPP at December 31, 2014 for future issuance. Shares issued for ESPP purchases are new shares.

- 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.

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