15.

EMPLOYEE STOCK OPTION AND RETIREMENT PLANS

Stock Options Awards

December 19, 2017,

the Company’s stockholders approved the amended and restated FactSet Research Systems Inc.

2004

Stock Option and Award Plan, as Amended and Restated, which was renamed the Stock Option and Award Plan, as Amended and Restated (the “Long Term Incentive Plan” or “LTIP”). As part of the approved amendment, an additional

5,750,000

shares of common stock were added to the LTIP’s share reserve and the expiration date was extended to

December 19, 2027.

The LTIP provides for the grant of share-based awards, including stock options and restricted stock awards to employees of FactSet. Stock options granted under the LTIP expire

not

more than

ten

years from the date of grant and the majority vest ratably over a period of

five

years. Options become vested and exercisable provided the employee continues employment with the Company through the applicable vesting date and remain exercisable until expiration or cancellation. Options are

not

transferable or assignable other than by will or the laws of descent and distribution. During the grantee’s lifetime, the options

may

be exercised only by the grantee.

As of

August 31, 2018,

a total of

3,143,417

stock options were outstanding at a weighted average exercise price of

$153.05.

Unamortized stock-based compensation of

$59.7

million is expected to be recognized as stock-based compensation expense over the remaining weighted average vesting period of

3.1

years.

Stock Option Activity

In fiscal years

2018,

2017

and

2016,

FactSet granted

610,628,

1,026,984

and

1,195,649

stock options, respectively. These stock options have a weighted average exercise price of

$190.65,

$157.09

and

$168.14

to existing employees of the Company, respectively. A summary of stock option activity is as follows:

(in thousands, except per share data)	Number Outstanding			Weighted Average Exercise Price Per Share
Balance at August 31, 2015		3,117		$	100.71
Granted – non performance-based		622		$	171.18
Granted – performance-based		551		$	165.59
Granted – non-employee Directors grant		23		$	146.82
Exercised		(681	)	$	71.52
Forfeited		(268	)	$	113.70
Balance at August 31, 2016		3,364		$	129.54
Granted – non performance-based		713		$	152.89
Granted – performance-based		291		$	166.29
Granted – non-employee Directors grant		24		$	170.24
Exercised		(487	)	$	86.17
Forfeited		(539	)	$	160.31
Balance at August 31, 2017		3,366		$	139.29
Granted – non performance-based		575		$	190.14
Granted – performance-based		17		$	200.20
Granted – non-employee Directors grant		19		$	197.75
Exercised		(622	)	$	113.73
Forfeited		(212	)	$	158.14
Balance at August 31, 2018		3,143		$	153.05

Stock Options Outstanding and Exercisable

The following table summarizes ranges of outstanding and exercisable options as of

August 31, 2018 (

in thousands, except per share data and the weighted average remaining years of contractual life):

			Outstanding								Exercisable
Range of Exercise Prices Per Share			Number Outstanding		Weighted Average Remaining Years of Contractual Life		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Number Exercisable		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
$87.26	-	$92.22		333		3.9	$	91.75	$	45,794		333	$	91.75	$	45,794
$94.84	-	$110.31		180		4.1	$	99.24	$	23,459		137	$	98.18	$	17,914
$131.31	-	$148.52		403		6.1	$	134.93	$	38,071		173	$	131.54	$	16,889
$150.81	-	$152.28		637		8.1	$	152.25	$	49,139		124	$	152.23	$	9,551
$159.14	-	$170.24		627		7.8	$	165.23	$	40,227		110	$	163.55	$	7,262
$171.22	-	$175.20		383		7.2	$	175.06	$	20,816		145	$	175.06	$	7,887
$189.98	-	$200.20		580		9.2	$	190.68	$	22,462		—	$	—	$	—

Total Fiscal 2018				3,143					$	239,9684		1,022			$	105,297

The following table summarizes outstanding and exercisable options as of

August 31, 2017

and

2016

(in thousands, except the weighted average exercise price per share):

			August 31, 2017				August 31, 2016
	Number of Shares		Weighted Average Exercise Price Per Share		Number of Shares		Weighted Average Exercise Price Per Share
Outstanding at fiscal year end		3,366	$	139.29		3,364	$	129.54
Exercisable at fiscal year end		918	$	105.14		970	$	89.42

The aggregate intrinsic value of in-the-money stock options exercisable at

August 31, 2018

and

2017

was

$105.3

million and

$49.7

million, respectively. Aggregate intrinsic value represents the difference between the Company’s closing stock price of

$229.39

August 31, 2018

and the exercise price multiplied by the number of options exercisable as of that date. The weighted average remaining contractual life of stock options exercisable at

August 31, 2018

and

2017

was

5.6

years and

5.1

years, respectively. The total pre-tax intrinsic value of stock options exercised during fiscal

2018,

2017

and

2016

was

$50.1

million,

$38.0

million and

$60.8

million, respectively.

Performance-based Stock Options

Performance-based stock options require management to make assumptions regarding the likelihood of achieving Company performance targets. The number of performance-based options that vest will be predicated on the Company achieving performance levels during the measurement period subsequent to the date of grant. Dependent on the financial performance levels attained by FactSet, a percentage of the performance-based stock options will vest to the grantees of those stock options. However, there is

current guarantee that such options will vest in whole or in part.

February 2015

Performance-based Option Grant Review

In connection with the acquisition of Code Red, FactSet granted

68,761

performance-based stock options during the

second

quarter of fiscal

2015

that are eligible to cliff vest based on a

four

-year measurement period ending

February 28, 2019.

In the

second

quarter of fiscal

2018,

FactSet modified the vesting criteria of the grant, which resulted in

40%

of the options deemed eligible to vest, with the remaining options forfeited.

cumulative catch-up adjustment was required because FactSet had expected the

40%

level to be achieved. The option holders must remain employed by FactSet through

February 28, 2019

for the options to vest. As of

August 31, 2018,

total unamortized stock-based compensation of

$0.4

million will be recognized as expense over the remaining vesting period of

0.4

years.

January 2017

Performance-based Option Grant Review

In connection with the acquisition of Vermilion, FactSet granted

61,744

performance-based stock options in

January 2017.

These performance-based options will vest

40%

on the

second

anniversary date of the grant and

20%

on each subsequent anniversary date if certain Vermilion revenue and operating income targets are achieved by

November 30, 2018.

The option holders must also remain employed by FactSet for the options to be eligible to vest. As of

August 31, 2018,

FactSet does

not

believe these growth targets are probable of being achieved, and as such,

stock-based compensation expense is expected to be recognized in connection with these performance-based options. A change in the actual financial performance levels achieved by Vermilion in future fiscal years could result in the following changes to the current estimate of the vesting percentage and related expense:

(in thousands , except vesting percentage data) Vesting Percentage	Cumulative Catch-up Adjustment (1)		Remaining Expense to be Recognized
0% (current expectation)	$	—	$	—
100%	$	613	$	1,272

(

)

Amounts represent the cumulative catch-up adjustment to be recorded if there was a change in the vesting percentage as of

August

31,

201

June 2017

Performance-based Option Grant Review

In connection with the acquisition of BISAM, FactSet granted

206,417

performance-based stock options in

June 2017.

These performance-based options will vest

40%

on the

second

anniversary date of the grant and

20%

on each subsequent anniversary date if certain BISAM revenue and operating income targets are achieved by

March 31, 2019.

The option holders must also remain employed by FactSet for the options to be eligible to vest. As of

August 31, 2018,

FactSet does

not

believe these growth targets are probable of being achieved, and as such,

stock-based compensation expense is expected to be recognized in connection with these performance-based options. A change in the actual financial performance levels achieved by BISAM in future fiscal years could result in the following changes to the current estimate of the vesting percentage and related expense:

(in thousands , except vesting percentage data) Vesting Percentage	Cumulative Catch-up Adjustment (1)		Remaining Expense to be Recognized
0%(current expectation)	$	—	$	—
80%	$	1,658	$	5,449
90%	$	1,866	$	6,130
100%	$	2,073	$	6,811

(

)

Amounts represent the cumulative catch-up adjustment to be recorded if there was a change in the vesting percentage as of

August 31,

201

Restricted Stock and Stock Unit Awards

The Company’s Option Plan plans permit the issuance of restricted stock and restricted stock units. Restricted stock awards are subject to continued employment over a specified period.

Restricted Stock and Stock Unit Awards Activity

In fiscal years

2018,

2017

and

2016,

FactSet granted

3,497,

62,400

and

97,319

restricted stock awards to employees of the Company, respectively. These awards have a weighted average grant date fair value of

$189.28,

$158.26

and

$159.64

for fiscal years

2018,

2017

and

2016,

respectively.

As of

August 31, 2018,

a total of

143,003

shares of restricted stock and restricted stock units were unvested and outstanding, which results in unamortized stock-based compensation of

$12.0

million to be recognized as stock-based compensation expense over the remaining vesting period of

3.0

years.

A summary of restricted stock award activity is as follows:

(in thousands, except per award data)	Number Outstanding			Weighted Average Grant Date Fair Value Per Award
Balance at August 31, 2015		313		$	103.34
Granted (restricted stock and stock units)		97		$	159.64
Vested ( 1 )		(69	)	$	85.04
Canceled/forfeited		(79	)	$	112.51
Balance at August 31, 2016		262		$	126.27
Granted (restricted stock and stock units)		62		$	158.26
Vested ( 2 )		(132	)	$	123.28
Canceled/forfeited		(10	)	$	130.32
Balance at August 31, 2017		182		$	138.62
Granted (restricted stock and stock units)		4		$	189.28
Vested (3)		(27	)	$	155.95
Canceled/forfeited		(16	)	$	116.29
Balance at August 31, 2018		143		$	139.34

(

)

The

69,244

restricted stock awards that vested during fiscal

2016

were comprised of:

37,079

of awards relating to restricted stock granted on

November 8, 2010

(remaining

40%

)

and

14,683

restricted stock awards that were granted on

April 8, 2013,

which cliff vest

20%

annually upon the anniversary date of the grant

Additionally,

17,482

awards vested related to

other

grants

(

)

The

132,194

restricted stock awards that vested during fiscal

2017

were comprised of

73,522

of awards relating to restricted stock granted on

November 1, 2013,

which cliff vested

60%

after

three

years,

17,328

of awards relating to restricted stock granted on

October 16, 2015,

which vested

20%

annually upon the anniversary date of the grant and

30,162

of awards relating to restricted stock granted on

October 16, 2015,

which were modified to accelerate vest

100%

in conjun

ction with employee severance.

Additionally,

11,182

awards vested related to other grants.

(

)

The

26,599

restricted stock awards that vested during fiscal

2018

were comprised of

9,765

of awards relating to restricted stock granted on

October 16, 2015

and

8,600

of awards relating to restricted stock granted on

June 30, 2017

which

vest

at a rate of

20%

annually upon the anniversary date of the grant

, respectively.

Additionally,

8,234

awards vested related to other grants.

Share-based Awards Available for Grant

A summary of share-based awards available for grant is as follows:

(in thousands)	Share-based Awards Available for Grant under the Employee Stock Option Plan			Share-based Awards Available for Grant under the Non-Employee Stock Option Plan
Balance at August 31, 2015		2,441			88
Granted – non performance-based options		(622	)		—
Granted – performance-based options		(551	)		—
Granted – non-employee Directors grant		—			(22	)
Restricted stock awards granted (1)		(243	)		—
Share-based awards canceled/forfeited (2)		466			—
Balance at August 31, 2016		1,491			66
Granted – non performance-based options		(713	)		—
Granted – performance-based options		(291	)		—
Granted – non-employee Directors grant		—			(24	)
Restricted stock awards granted (1)		(156	)		—
Share-based awards canceled/forfeited (2)		566			—
Balance at August 31, 2017		897			42
Increase in the number of shares available for issuance		5,750			250
Granted – non performance-based options		(575	)		—
Granted – performance-based options		(17	)		—
Granted – non-employee Directors grant		—			(19	)
Restricted stock awards granted (1)		(9	)		—
Share-based awards canceled/forfeited (2)		252			9
Balance at August 31, 2018		6,298			282

(

)

Each restricted stock award granted is equivalent to

2.5

shares granted under the Company’s

Option P

lan.

(

)

Under the Company’s

ption

lan, for each restricted stock award canceled/forfeited, an equivalent of

2.5

shares is added back to the available share-based awards balance.

Employee Stock Purchase Plan

December 19, 2017,

the Company’s stockholders approved and amended and restated

2008

Employee Stock Purchase Plan, as Amended and Restated, which was renamed the Employee Stock Purchase Plan, as Amended and Restated (the “ESPP”). Shares of FactSet common stock

may

be purchased by eligible employees under ESPP in

three

-month intervals at a purchase price equal to at least

85%

of the lesser of the fair market value of the Company’s common stock on either the

first

day or the last day of each

three

-month offering period. Employee purchases

may

not

exceed

10%

of their gross compensation and a

$25,000

contribution limit during an offering period.

During fiscal

2018,

employees purchased

64,230

shares at a weighted average price of

$160.34

as compared to

75,372

shares at a weighted average price of

$136.34

for fiscal

2017.

August 31, 2018,

the ESPP had

268,942

shares reserved for future issuance.

401

(k) Plan

The Company established its

401

(k) Plan in fiscal

1993.

The

401

(k) Plan is a defined contribution plan covering all full-time, U.S. employees of the Company and is subject to the provisions of the Employee Retirement Income Security Act of

1974

and the Internal Revenue Code of

1986

(“IRC”). Each year, participants

may

contribute up to

60%

of their eligible annual compensation, subject to annual limitations established by the IRC. The Company matches up to

of employees’ earnings, capped at the Internal Revenue Service annual maximum. Company matching contributions are subject to a

five

-year graduated vesting schedule. All full-time, U.S. employees are eligible for the matching contribution by the Company. The Company contributed

$11.6

million,

$10.1

million, and

$9.7

million in matching contributions to employee

401

(k) accounts during fiscal

2018,

2017

and

2016,

respectively.