Stock-based compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock Incentive Plans

The Company has a stock-based compensation program that provides equity incentives for employees, consultants and directors. This program includes incentive and non-statutory stock options and non-vested stock awards (referred to as restricted stock unit awards) granted under the FLIR Systems, Inc. 2011 Stock Incentive Plan, as amended (the “2011 Plan”).

The Company has granted time-based options, time-based restricted stock unit awards, and performance-based restricted stock unit awards. Options generally expire ten years from the grant date. Time-based options and restricted stock unit awards generally vest over a three-year period. Performance-based restricted stock unit awards granted during the years ended December 31, 2020, 2019 and 2018 may be earned based upon a combination of the Company's revenue and operating performance over a three-year period.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (the “ESPP”) that allows employees to purchase shares of the Company’s common stock at a discount to the fair market value at the lower of either the date of enrollment or the purchase date.

Note 3. Stock-based Compensation - (Continued)

Employee Stock Purchase Plan - (Continued)

The discount may be fixed at any amount up to 15 percent by the plan administrator from time to time, and is presently set at 10 percent. The ESPP provides for six-month offerings commencing on May 1 and November 1 of each year with purchases on April 30 and October 31 of each year. The Company reserved 1,500,000 shares of common stock for issuance under the ESPP. Shares purchased under the ESPP have no holding period requirements. At March 31, 2021 and December 31, 2020, respectively, there were approximately 1,136,841 shares remaining available under the ESPP for future issuance. Shares issued for ESPP purchases are new shares. Effective as of May 1, 2021, in connection with the previously announced acquisition by Teledyne Technologies Incorporated, a Delaware corporation (“Teledyne”), the Company suspended the ESPP such that no new offering period under the ESPP shall commence, and no additional contributions shall be made to the ESPP on or after such date.

The following table sets forth the stock-based compensation expense recognized in the Consolidated Statements of Income (in thousands):


	Three Months Ended
	March 31,
	2021		2020
Cost of goods sold	$	1,268	$	1,067
Research and development	2,228		1,677
Selling, general and administrative	6,264		4,902
Stock-based compensation expense before income taxes	$	9,760	$	7,646

Stock-based compensation expense capitalized in the Consolidated Balance Sheets is as follows (in thousands):


	March 31,
	2021		2020
Capitalized in inventory	$	1,493	$	879

As of March 31, 2021, the Company had approximately $73.1 million of total unrecognized stock-based compensation costs, net of estimated forfeitures, to be recognized over a weighted average period of approximately 2.2 years.