In January 2016, the Company’s Board of Directors authorized a stock repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its common stock. The number of shares that we may repurchase will depend on a variety of factors, such as share price, levels of cash and borrowing capacity available, alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions. Although we have no current plans to repurchase stock, future repurchases, if any, are expected to be funded with cash on hand and borrowings under the Company’s credit facility. No repurchases were made since 2015. Up to approximately three million shares may be repurchased under the stock repurchase program.

Teledyne has long-term incentive plans which provide its Board of Directors the flexibility to grant restricted stock, restricted stock units, performance shares, non-qualified stock options, incentive stock options and stock appreciation rights to officers and employees of Teledyne. Employee stock options become exercisable in one-third increments on the first, second and third anniversary of the grant and have a maximum 10-year life.

Stock option compensation expense is recorded on a straight line basis over the appropriate vesting period, generally three years except for stock options that were granted after 2018 to Teledyne’s then President and Chief Executive Officer and Teledyne’s Executive Chairman, which were expensed immediately. The Company recorded $20.0 million, $24.7 million, and $26.1 million for stock option expense, for 2021, 2020 and 2019, respectively. The Company issues shares of common stock upon the exercise of stock options.

The total pretax intrinsic value of options exercised during 2021 and 2020 (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) was $64.2 million and $96.9 million, respectively. At January 2, 2022, the intrinsic value of stock options outstanding was $414.0 million and the intrinsic value of stock options exercisable was $382.7 million. During 2021 and 2020, the amount of cash received from the exercise of stock options was $25.4 million and $36.3 million, respectively.

The fair value of stock options is determined by using a lattice-based option pricing model. The Company uses a combination of its historical stock price volatility and the volatility of exchange traded options, if any, on the Company stock to compute the expected volatility for purposes of valuing stock options granted. The period used for the historical stock price corresponded to the expected term of the options. The period used for the exchange traded options, if any, included the longest-dated options publicly available, generally three months. The expected dividend yield is based on Teledyne’s practice of not paying dividends. The risk-free rate of return is based on the yield of U.S. Treasury Strips with terms equal to the expected life of the options as of the grant date. The expected life in years is based on historical actual stock option exercise experience.


Stock option valuation assumptions:	2021	2020	2019
Expected dividend yield	n/a	n/a	n/a
Expected volatility	27.8%	23.7%	26.7%
Risk-free interest rate	0.09% to1.58%	1.50% to 1.75%	2.47% to 2.70%
Expected life in years	5.2	6.6	6.6

Stock option transactions for Teledyne’s stock option plans are summarized as follows:



	2021			2020			2019
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Beginning balance	1,819,147	$	170.10	1,988,576	$	130.67	2,064,740	$	104.66
Granted	211,973	$	440.48	247,273	$	382.91	390,789	$	217.58
Exercised	(213,384)	$	118.55	(382,554)	$	95.22	(429,654)	$	80.31
Canceled or expired	(23,879)	$	328.15	(34,148)	$	252.43	(37,299)	$	181.62
Ending balance	1,793,857	$	206.08	1,819,147	$	170.10	1,988,576	$	130.67
Options exercisable at end of period	1,328,191	$	148.73	1,242,786	$	118.57	1,242,205	$	94.04

The following table provides certain information with respect to stock options outstanding and stock options exercisable at January 2, 2022, under the stock option plans.


	Stock Options Outstanding				Stock Options Exercisable
Range of Exercise Prices	Shares	Weighted Average Exercise Price		Remaining life in years	Shares	Weighted Average Exercise Price
$40.70-$99.99	500,916	$	82.16	2.7	500,916	$	82.16
$100.00-$199.99	558,185	$	153.97	5.6	558,185	$	153.97
$200.00-$299.99	307,410	$	217.71	7.1	197,353	$	217.77
$300.00-$399.99	220,180	$	382.89	8.1	71,737	$	382.93
$400.00-$445.21	207,166	$	440.93	9.7	—	$	—



	1,793,857	$	206.08	5.8	1,328,191	$	148.73

Teledyne’s Performance Share Plan (“PSP”) provides grants of performance share units, which key officers and executives may earn if Teledyne meets specified performance objectives over a three-year period. Awards are payable in cash and to the extent available, shares of Teledyne common stock. Awards are generally paid to the participants in three annual installments after the end of the performance cycle so long as they remain employed by Teledyne (with an exception for retirement). Participants in the PSP program can elect to receive a cash payment in lieu of awarded shares to pay income taxes due with respect to an installment payment. The cash payment in lieu of awarded shares is based on the then current market value of Teledyne stock.

Under the 2015 to 2017 plan, and based on actual performance, the Company issued 7,673, 8,586 and 6,481 shares of Teledyne common stock in 2020, 2019 and 2018, respectively. Under the 2018 to 2020 plan, and based on actual performance, the Company issued 9,588 shares of Teledyne common stock in 2021. The maximum number of remaining shares that could be issued in two equal installments in 2022 and 2023, is 35,082.

The estimated expense for each plan year was based on the expected cash payout and the expected shares to be issued, valued at the share price at the inception of the performance cycle, except for the shares that can be issued based on a market-based comparison. The Company recorded $6.2 million and $7.5 million in compensation expense related to the PSP program for fiscal years 2020 and 2019, respectively. In 2021, the Company discontinued the PSP.

Under Teledyne’s restricted stock award program key officers and executives receive a grant of stock equal to a specified percentage of the participant’s annual base salary at the date of grant. The restricted stock is subject to transfer and forfeiture restrictions during an applicable “restricted period”. The restrictions have both time-based and performance-based components. The restricted period expires (and the restrictions lapse) on the third anniversary of the date of grant, subject to the achievement of stated performance objectives over a specified three-year performance period. If employment is terminated (other than by death, retirement or disability) during the restricted period, the stock grant is forfeited.

The estimated expense for restricted stock awards to employees is based on a lattice-based simulation which takes into consideration several factors including volatility, risk free interest rates and the correlation of Teledyne’s stock price with the comparator, the S&P 500 Index for awards granted in 2021, the Russell 1000 Index for awards granted from 2018 to 2020 and the Russell 2000 for awards granted prior to 2018. The Company recorded $3.5 million, $3.3 million and $3.0 million in compensation expense related to restricted stock awards to employees, for fiscal years 2021, 2020 and 2019, respectively. At January 2, 2022, there was $3.5 million of total estimated unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of approximately 1.5 years.

As part of the acquisition of FLIR, the Company assumed certain unvested restricted stock units that were issued by FLIR in March 2021. The unvested restricted stock units were converted to 62,974 Teledyne restricted stock units. The post-acquisition expense for these restricted stock units was $7.8 million for 2021. The expense related to these assumed restricted stock units is included in the Digital Imaging segment results. This amount can be impacted by employee retirements and terminations or other awards granted during the remainder of the year. At January 2, 2022, 49,351 restricted stock units are outstanding and there was $14.4 million of total estimated unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of approximately 2.2 years.

The following table shows restricted stock award activity for grants made to employees:


Restricted Stock:	Shares	Weighted average fair value per share




Balance, December 30, 2018	74,220	$	108.05
Granted	17,522	$	200.00
Issued	(35,330)	$	72.91

Balance, December 29, 2019	56,412	$	158.62
Granted	10,080	$	360.33
Issued	(23,087)	$	114.74

Balance, January 3, 2021	43,405	$	228.80
Granted	10,227	$	334.92
Issued	(15,423)	$	176.64
Forfeited/Canceled	(380)	$	176.64
Balance, January 2, 2022	37,829	$	279.27

Non-employee directors each received restricted stock units valued at $130,000 in 2021 and $110,000 in 2020 and 2019 or valued at half the amount for a person who becomes a director for the first time after the date of the Annual Meeting. The restricted stock units generally vest one year following the date of grant and are settled in shares of common stock on the date of vesting unless a director has elected to defer settlement of the award until his or her separation from Board service. The annual expense related to non-employee director’s restricted stock units was $1.2 million for 2021, $1.1 million for 2020 and $1.0 million for 2019.

The following table shows restricted stock award activity for grants made to non-employee directors:


Directors Restricted Stock:	Shares	Weighted average fair value per share












Balance, December 30, 2018	7,752	$	170.00
Granted	4,155	$	251.23
Issued	(2,840)	$	193.39
Balance, December 29, 2019	9,067	$	199.90
Granted	3,692	$	312.41
Issued	(2,640)	$	249.72
Canceled	(353)	$	311.17
Balance, January 3, 2021	9,766	$	224.94
Granted	2,592	$	450.27
Issued	(5,300)	$	227.90

Balance, January 2, 2022	7,058	$	308.54