
	COMPENSATION PLANS AND PROGRAMS

Compensation Programs

We use a variety of compensation programs to both attract and retain employees, and to more closely align employee compensation with company performance. These programs include, but are not limited to, short-term incentive awards tied to performance goals and cash awards to inventors for filed patent applications and patent issuances, as well as stock option awards, time-based restricted stock unit (“RSU”) awards and performance-based awards under our long-term compensation program ("LTCP"). Our LTCP typically includes annual grants with a three-year vesting period; as a result, in any one year, we are typically accounting for three active LTCP cycles. We issue new shares of our common stock to satisfy our obligations under the share-based components of these programs from the 2009 Plan discussed below. However, our Board of Directors has the right to authorize the issuance of treasury shares to satisfy such obligations in the future.

Stock Plans

On June 4, 2009, the company’s shareholders adopted and approved the 2009 Stock Incentive Plan (the “2009 Plan”), under which current or prospective officers and employees and non-employee directors, consultants and advisors can receive share-based awards such as RSUs, restricted stock, stock options and other stock awards. As of December 31, 2014, no further grants were permitted under any previously existing stock plans (the “Pre-existing Plans”). The company's shareholders re-approved the material terms of the 2009 Plan on June 12, 2014. We issue the share-based awards authorized under the 2009 Plan through a variety of compensation programs.

The following table summarizes changes in the number of equity instruments available for grant (in thousands) under the 2009 Plan for the current year:



	Available for Grant
Balance at December 31, 2013	2,005
RSUs granted (a)	(840	)
Options granted	(140	)
Options expired and RSUs canceled	420
Balance at December 31, 2014	1,445


(a)	RSUs granted include time-based RSUs, performance-based RSUs and dividend equivalents.

RSUs and Restricted Stock

Under the 2009 Plan, we may issue RSUs and/or shares of restricted stock to current or prospective officers and employees and non-employee directors, consultants and advisors. No further grants are allowed under the Pre-existing Plans. Any cancellations of outstanding RSUs that were granted under the 2009 Plan or Pre-existing Plans will increase the number of RSUs and/or shares of restricted stock available for grant under the 2009 Plan. The RSUs vest over periods generally ranging from 0 to 3 years from the date of the grant. During 2014 and 2013, we granted approximately 0.6 million and 0.9 million RSUs, respectively, under the 2009 Plan. We have issued less than 0.1 million shares of restricted stock under the 2009 Plan.

At December 31, 2014 and 2013, we had unrecognized compensation cost related to share-based awards of $17.9 million and $11.2 million, respectively. For grants made in 2014, 2013 and 2012 that cliff vest, we expect to amortize the associated unrecognized compensation cost at December 31, 2014 on a straight-line basis over a three-year period.

Vesting of performance-based RSU awards is subject to attainment of specific goals established by the Compensation Committee of the Board of Directors. Depending upon performance against these goals, the payout range for performance-based RSU awards under LTCP cycles that began after 2009, the payout range for performance-based RSU awards can be anywhere from 0 to 2 times the value of the award.

Information with respect to current RSU activity is summarized as follows (in thousands, except per share amounts):



	Number of Unvested RSUs		Weighted Average Per Share Grant Date Fair Value
Balance at December 31, 2013	1,632		$	42.04
Granted*	840		34.42
Forfeited*	(312	)	45.01
Vested*	(258	)	31.29
Balance at December 31, 2014	1,902		$	35.73

* These numbers include less than 0.1 million RSUs credited on unvested RSUs as dividend equivalents. Dividend equivalents accrue with respect to unvested RSUs when and as cash dividends are paid on the company's common stock, and vest if and when the underlying RSUs vest. Granted amounts include performance-based RSU awards at their maximum potential payout level of 200%.

The total vest date fair value of the RSUs that vested in 2014, 2013 and 2012 was $7.7 million, $6.5 million and $12.9 million, respectively. The weighted average per share grant date fair value in 2014, 2013 and 2012 was $31.29, $42.34 and $39.35, respectively.

Other RSU Grants

We also grant RSUs to all non-management Board members and, in special circumstances, management personnel outside of the LTCP. Grants of this type are supplemental to any awards granted to management personnel through the LTCP.

Stock Options

We have outstanding non-qualified stock options that were granted under the Pre-existing Plans to non-employee directors, officers and employees of the company and other specified groups, depending on the plan. No further grants are allowed under the Pre-existing Plans. In 2009, our shareholders approved the 2009 Plan, which allows for the granting of incentive and non-qualified stock options, as well as other securities. The 2009 Plan authorizes the issuance of up to 3.0 million shares of common stock pursuant to incentive stock options. The administrator of the 2009 Plan, initially the Compensation Committee of the Board of Directors, determines the number of options to be granted. In 2013 and 2014, both incentive and non-qualified stock options were granted pursuant to the LTCP under the 2009 Plan. Under the terms of the 2009 Plan, the exercise price per share of each option, other than in the event of options granted in connection with a merger or other acquisition, cannot be less than 100% of the fair market value of a share of common stock on the date of grant. Under all of the plans, options are generally exercisable for a period of between 7 to 10 years from the date of grant and may vest on the grant date, another specified date or over a period of time.

Information with respect to current year stock option activity under the above plans is summarized as follows (in thousands, except per share amounts):



	Outstanding Options		Weighted Average Exercise Price
Balance at December 31, 2013	245		$	22.61
Granted	140		30.69
Canceled	(28	)	38.78
Exercised	(21	)	20.13
Balance at December 31, 2014	336		$	24.90

The weighted average remaining contractual life of our outstanding options was 15.12 years as of December 31, 2014. We currently have approximately 0.1 million options outstanding that have an indefinite contractual life. These options were granted between 1983 and 1986 under a Pre-existing Plan. For purposes of calculating the weighted average remaining contractual life, these options were assigned an original life in excess of 50 years. The majority of these options have an exercise price between $8.00 and $11.63. The total intrinsic value of stock options exercised during the years ended December 31, 2014, 2013 and 2012 was $0.3 million, $1.0 million and $2.8 million, respectively. The total intrinsic value of our options outstanding at December 31, 2014 was $9.4 million. In 2014, we recorded cash received from the exercise of options of $0.4 million. Upon option exercise, we issued new shares of stock.

At both December 31, 2014 and 2013, we had approximately 0.3 million options outstanding that had exercise prices less than the fair market value of our stock at each balance sheet date. These options would have generated cash proceeds to the company of $8.4 million and $1.7 million, respectively, if they had been fully exercised on those dates.

401(k)

We have a 401(k) plan (“Savings Plan”) wherein employees can elect to defer compensation within federal limits. The company matches a portion of employee contributions. The company’s contribution expense was approximately $1.0 million for each of 2014, 2013 and 2012. At its discretion, the company may also make a profit-sharing contribution to our employees’ 401(k) accounts.