STOCK-BASED COMPENSATION PLANS

We maintain the Flowserve Corporation Equity and Incentive Compensation Plan (the "2010 Plan"), which is a shareholder-approved plan authorizing the issuance of up to 8,700,000 shares of our common stock in the form of incentive stock options, non-statutory stock options, restricted shares, restricted share units and performance-based units (collectively referred to as "Restricted Shares"), stock appreciation rights and bonus stock. Of the 8,700,000 shares of common stock authorized under the 2010 Plan, 5,676,596 were available for issuance as of December 31, 2013. In addition to the 2010 Plan, we also maintain the Flowserve Corporation 2004 Stock Compensation Plan (the "2004 Plan"). The 2004 Plan authorizes the issuance of up to 10,500,000 shares of common stock through grants of Restricted Shares, stock options and other equity-based awards. Of the 10,500,000 shares of common stock authorized under the 2004 Plan, 827,835 were available for issuance as of December 31, 2013. No stock options have been granted since 2006.

Stock Options — Options granted to officers, other employees and directors allow for the purchase of common shares at the market value of our stock on the date the options are granted. Options generally become exercisable over a staggered period ranging from one to five years (most typically from one to three years). At December 31, 2013, all outstanding options were fully vested. Options generally expire 10 years from the date of the grant or within a short period of time following the termination of employment or cessation of services by an option holder. No options were granted during 2013, 2012 or 2011. Information related to stock options issued to officers, other employees and directors prior to 2010 under all plans is presented in the following table:



	2013				2012				2011
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Number of shares under option:
Outstanding — beginning of year	115,362		$	15.00	145,338		$	13.90	204,213		$	13.49
Exercised	(17,400	)	5.91		(24,576	)	10.15		(58,875	)	12.48
Canceled	—		—		(5,400	)	7.65		—		—
Outstanding — end of year	97,962		$	16.61	115,362		$	15.00	145,338		$	13.90
Exercisable — end of year	97,962		$	16.61	115,362		$	15.00	145,338		$	13.90

Additional information relating to the ranges of options outstanding at December 31, 2013, is as follows:



	Weighted Average Remaining Contractual Life	Options Outstanding and Exercisable
Range of Exercise Prices per Share	Weighted Average Remaining Contractual Life	Number Outstanding	Weighted Average Exercise Price per Share
$ 8.08 - $14.14	1.53	10,500	$	10.32
$14.15 - $16.16	2.12	3,201	16.06
$16.17 - $18.18	2.95	84,261	17.42
		97,962	$	16.61

As of December 31, 2013, we had no unrecognized compensation cost related to outstanding stock option awards.

The weighted average remaining contractual life of options outstanding at December 31, 2013 and 2012 was 2.8 years and 3.3 years, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2013, 2012 and 2011 was $0.8 million, $0.7 million and $1.5 million, respectively. No stock options vested during the years ended December 31, 2013, 2012 and 2011.

Restricted Shares — Generally, the restrictions on Restricted Shares do not expire for a minimum of one year and a maximum of three years, and shares are subject to forfeiture during the restriction period. Most typically, Restricted Share grants have staggered vesting periods over one to three years from grant date. The intrinsic value of the Restricted Shares, which is typically the product of share price at the date of grant and the number of Restricted Shares granted, is amortized on a straight-line basis to compensation expense over the periods in which the restrictions lapse.

Unearned compensation is amortized to compensation expense over the vesting period of the Restricted Shares. As of December 31, 2013 and 2012, we had $31.5 million and $30.4 million, respectively, of unearned compensation cost related to unvested Restricted Shares, which is expected to be recognized over a weighted-average period of approximately one year. These amounts will be recognized into net earnings in prospective periods as the awards vest. The total fair value of Restricted Shares vested during the years ended December 31, 2013, 2012 and 2011 was $34.9 million, $36.4 million and $35.1 million, respectively.

We recorded stock-based compensation for restricted shares as follows:



	Year Ended December 31,
	2013		2012		2011
	(Amounts in millions)
Stock-based compensation expense	$	35.8	$	35.4	$	32.1
Related income tax benefit	(12.3)		(12.0)		(10.9)
Net stock-based compensation expense	$	23.5	$	23.4	$	21.2

The following table summarizes information regarding Restricted Shares:



	Year Ended December 31, 2013
	Shares		Weighted Average Grant-Date Fair Value
Number of unvested Restricted Shares:
Outstanding — beginning of year	2,376,300		$	37.70
Granted	847,236		51.28
Vested	(1,019,540	)	34.23
Canceled	(183,318	)	42.84
Outstanding — ending of year	2,020,678		$	44.68

Unvested Restricted Shares outstanding as of December 31, 2013, includes approximately 897,000 units with performance-based vesting provisions. Performance-based units are issuable in common stock and vest upon the achievement of pre-defined performance targets, primarily based on our average annual return on net assets over a three-year period as compared with the same measure for a defined peer group for the same period. Most units were granted in three annual grants since January 1, 2011 and have a vesting percentage between 0% and 200% depending on the achievement of the specific performance targets. Compensation expense is recognized ratably over a cliff-vesting period of 36 months based on the fair market value of our common stock on the date of grant, as adjusted for anticipated forfeitures. During the performance period, earned and unearned compensation expense is adjusted based on changes in the expected achievement of the performance targets. Vesting provisions range from 0 to approximately 1,793,000 shares based on performance targets. As of December 31, 2013, we estimate vesting of approximately 1,280,000 shares based on expected achievement of performance targets.