Stock compensation plans

In May of 2014, the shareholders of the Company approved the Teleflex Incorporated 2014 Stock Incentive Plan (the "2014 Plan") which replaced the Company's 2008 Stock Incentive Plan and 2000 Stock Compensation Plan (the "Prior Plans"), under which stock options and restricted stock awards previously were granted. The 2014 Plan provides for several different kinds of awards, including stock options, stock appreciation rights, stock awards and other stock-based awards to directors, officers and key employees. Under the 2014 Plan, the Company is authorized to issue up to 5.3 million shares of common stock, subject to adjustment in accordance with special share counting rules in the 2014 Plan that, among other things, (i) count shares underlying a stock option or stock appreciation right (each, an "option award") as one share and each share underlying any other type of award (a "stock award") as 1.8 shares, (ii) increases the shares the Company is authorized to issue by one or 1.8 shares for each share underlying an option award or stock award, respectively, under the Prior Plans that have been canceled, expired, settled in cash or forfeited after December 31, 2013 and (iii) decrease the number of shares the Company is authorized to issue by one share and 1.8 shares for each share underlying an option award or stock award, respectively, granted under the Prior Plans between January 1, 2014 and the May 2, 2014 adoption of the 2014 Plan by the Company's stockholders. Options granted under the 2014 Plan have an exercise price equal to the closing price of the Company's common stock on the date of the grant. In 2015, the Company granted incentive and non-qualified options to purchase 353,688 shares of common stock and granted restricted stock units relating to 105,239 shares of common stock under the 2014 Plan. The unrecognized compensation expense for these awards as of the grant date was $20.0 million, which will be recognized over the vesting period of the awards. As of December 31, 2015, 4,446,967 shares were available for future grants under the 2014 Plan.

Share-based compensation expense for 2015, 2014 and 2013 was $14.5 million, $12.2 million and $11.9 million, respectively, and is included in selling, general and administrative expenses. The total income tax benefit recognized for share-based compensation arrangements for 2015, 2014 and 2013 was $4.4 million, $3.3 million and $3.8 million, respectively.

The fair value of options granted in 2015, 2014 and 2013 was estimated at the date of grant using a Black-Scholes option pricing model. The following weighted-average assumptions were used:



	2015		2014		2013
Risk-free interest rate	1.44	%	1.45	%	0.75	%
Expected life of option	4.87 years		4.89 years		4.87 years
Expected dividend yield	1.12	%	1.34	%	1.73	%
Expected volatility	20.68	%	21.44	%	24.65	%

The fair value for non-vested equity awards granted in 2015, 2014 and 2013 was estimated at the date of grant based on the market price for the underlying stock on the grant date discounted for the risk free interest rate and the present value of expected dividends over the vesting period. The following weighted-average assumptions were used:



	2015		2014		2013
Risk-free interest rate	0.94	%	0.65	%	0.36	%
Expected dividend yield	1.12	%	1.34	%	1.71	%

The Company applied a simplified method to establish the beginning balance of the additional paid-in capital pool (“APIC Pool”) related to the tax effects of employee stock-based compensation and to determine the subsequent impact on the APIC Pool and consolidated statements of cash flows of the tax effects of employee stock-based compensation awards that are outstanding.

The following table summarizes the option activity during 2015:



	Shares Subject to Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life In Years	Aggregate Intrinsic Value
						(Dollars in thousands)
Outstanding, beginning of the year	1,233,672		$	75.93
Granted	353,688		121.10
Exercised	(112,941	)	68.53
Forfeited or expired	(31,507	)	103.42
Outstanding, end of the year	1,442,912		86.98		7.0	$	63,480
Exercisable, end of the year	839,149		$	71.65	6.0	$	50,180

The weighted average grant date fair value for options granted during 2015, 2014 and 2013 was $21.44, $18.01 and $14.30, respectively. The total intrinsic value of options exercised during 2015, 2014 and 2013 was $6.3 million, $15.4 million and $4.1 million, respectively.

The Company recorded $5.7 million of expense related to the portion of the shares underlying options that vested during 2015, which is included in selling, general and administrative expenses. As of December 31, 2015, the unamortized share-based compensation cost related to non-vested stock options, net of expected forfeitures, was $6.6 million, which is expected to be recognized over a weighted-average period of 1.8 years. Authorized but unissued shares of the Company’s common stock are issued upon exercises of options.

The following table summarizes the non-vested restricted stock unit activity during 2015:



	Number of Non-Vested Shares		Weighted Average Grant-Date Fair Value		Weighted Average Remaining Contractual Life In Years	Aggregate Intrinsic Value
						(Dollars in thousands)
Outstanding, beginning of the year	313,703		$	76.80
Granted	105,239		118.00
Vested	(106,667	)	61.79
Forfeited	(30,867	)	88.73
Outstanding, end of the year	281,408		96.59		1.2	$	36,818

The Company issued 105,239, 116,258 and 148,191 of non-vested restricted stock units in 2015, 2014 and 2013, respectively, the majority of which vest on the third anniversary of the grant date (cliff vesting). The weighted average grant-date fair value for non-vested restricted stock units granted during 2015, 2014 and 2013 was $118.00, $97.87 and $75.60, respectively.

The Company recorded $8.8 million of expense related to the portion of the restricted stock units that vested during 2015, which is included in selling, general and administrative expenses. The unamortized share-based compensation cost related to non-vested restricted stock units, net of expected forfeitures, was $11.2 million, which is expected to be recognized over a weighted-average period of 1.7 years. The Company uses treasury stock to provide shares of common stock in connection with vesting of the restricted stock units.