Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation

Stock-Based Compensation

3.Stock-Based Compensation

The Company’s primary types of share-based compensation are in the form of stock options and restricted stock. The Company recorded stock-based compensation expense as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Stock options	$	1.7	$	1.7	$	5.0	$	4.9
Restricted stock	0.4		0.3		0.9		0.9
Total stock-based compensation	$	2.1	$	2.0	$	5.9	$	5.8

Compensation expense is amortized on a straight-line basis over the underlying vesting terms of the share-based award. Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to five years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below:

	2012	2011
Risk-free interest rates	0.91%-1.78%	1.24% -3.12%
Expected life	6.5 years	6.5 years
Volatility	55.9%	57.2%
Expected dividend yield	0.0%	0.0%

Bruker Corporation Stock Plan

In May 2010, the Bruker Corporation 2010 Incentive Compensation Plan (the “2010 Plan”) was approved by the Company’s stockholders. The 2010 Plan provides for the issuance of up to 8,000,000 shares of the Company’s common stock. The Plan allows a committee of the Board of Directors (the “Committee”) to grant incentive stock options, non-qualified stock options and restricted stock awards. The Committee has the authority to determine which employees will receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted by the Committee typically vest over a period of three to five years.

Stock option activity for the nine months ended September 30, 2012 was as follows:

	Shares Subject to Options		Weighted Average Option Price		Weighted Average Remaining Contractual Term (Yrs)	Aggregate Intrinsic Value (in millions) (b)
Outstanding at December 31, 2011	5,096,253		$	10.64
Granted	469,250		12.82
Exercised	(422,558	)	8.54			$	2.9
Forfeited	(183,983	)	11.62
Outstanding at September 30, 2012	4,958,962		$	10.99	6.1	$	12.3
Vested at September 30, 2012	3,051,193		$	9.51	5.0	$	11.3
Vested and expected to vest at September 30, 2012 (a)	4,804,021		$	10.93	6.1	$	12.2

(a)	In addition to the options that are vested at September 30, 2012, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of September 30, 2012.
(b)	The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $13.09 on September 30, 2012, or the date of exercises, as appropriate, and the exercise price of the underlying stock options.

Restricted stock activity for the nine months ended September 30, 2012 was as follows:

	Shares Subject to Restriction		Average Grant Date Fair Value
Outstanding at December 31, 2011	236,232		$	17.76
Granted	188,028		11.73
Vested	(73,446	)	15.50
Outstanding at September 30, 2012	350,814		$	15.00

At September 30, 2012, the Company expects to recognize pre-tax stock-based compensation expense of $11.6 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of 2.2 years. In addition, the Company expects to recognize pre-tax stock-based compensation expense of $4.5 million associated with outstanding restricted stock awards granted under the Company’s stock plans over the weighted average remaining service period of 3.6 years.

Bruker Energy & Supercon Technologies Stock Plan

In October 2009, the Board of Directors of Bruker Energy & Supercon Technologies, Inc. (“BEST”) adopted the Bruker Energy & Supercon Technologies, Inc. 2009 Stock Option Plan (the “BEST Plan”). The BEST Plan provides for the issuance of up to 1,600,000 shares of BEST common stock in connection with awards under the BEST Plan. The BEST Plan allows a committee of the BEST Board of Directors to grant incentive stock options, non-qualified stock options and restricted stock awards. The Compensation Committee of the BEST Board of Directors has the authority to determine which employees will receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted pursuant to the BEST Plan typically vest over a period of three to five years.

There has been no activity in the BEST Plan during the three and nine months ended September 30, 2012. At September 30, 2012, there were 800,000 options outstanding under the BEST Plan. The Company expects to recognize pre-tax stock-based compensation expense of $0.8 million associated with outstanding stock option awards granted under the BEST Plan over the weighted average remaining service period of 1.9 years.