2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 80 ETSY Grossmerchandisesales 2015 2016 2017 $2.39B Up14.5% in2017vs.2016 $2.84B $3.25B 70% 70% 67% 30% 30% 33% InternationalGMS DomesticGMS Revenue 2015 $273M 2016 2017 $365M $441M Up20.9% in2017vs.2016 Our Impact Strategy Etsy’simpactstrategyfocusesonleveragingEtsy’scorebusinesstogeneratevalueforour communityandstakeholdersthroughpositiveeconomic,social,andenvironmentalefforts.We believethataligningourimpactstrategywithourcorebusinesswillleadtopositiveoutcomes.We aimtocreatemoreeconomicopportunityforsellers,greaterdiversityinourworkforceandbuild long-termresiliencebyreducingourcarbonfootprint.Webelievethatconsumersaredemanding moreofthebusinessestheysupportandthatthecompaniesbestpositionedtosucceedwillbuild win-winsolutionsthataregoodforpeople,theplanet,andprofit.Thealignmentofourmission, values,andimpactstrategyalongsideourbusinessstrategyiscriticaltogrowingsustainablyand positioningusforcontinuedsuccess. For2018,wehavesetkeyperformanceindicators(“KPIs”)inordertomeasureourimpactprogress. v Total of 07 pages in section Our Strategy Best-in-Class SellerTools &Services World-Class Marketing Tools Search &Discovery Trust &Reliability Gifting Style Celebrations Focuson thecoreEtsymarket, inour6coregeographies. Win thosemomentswhenyou’re looking forsomethingspecial. Enableoursellers towinbydoing these4 thingsexceptionallywell. UnitedStates Canada UnitedKingdom Australia France Germany Clothing&Accessories Home&Living Jewelry CraftSupplies Art&Collectibles Paper&PartySupplies 2017OperationalandFinancialHighlights Withthisgreaterfocusonourfourkeyinitiatives,weincreasedthepaceofourproduct experimentsandtherateatwhichwearegoingfromidea,toexperiment,totest,tolaunch.These actionscollectivelyenabledustoachievethefollowing2017results: • Grossmerchandisesales(“GMS”)grewby14.5%year-over-yearto$3.25billion,upfrom $2.84billionin2016,with33.0%ofsalesinvolvingabuyerand/orselleroutsideoftheU.S.We acceleratedGMSgrowthforthethirdandfourthquarterof2017anddeliveredourfirst-ever billiondollarquarterofGMSinthefourthquarterof2017,followingastrongholidayseason. • Revenueroseby20.9%year-over-yeartoatotalof$441.2million,comparedto$365.0millionin 2016,ledbySellerServicesrevenuegrowthof28.7%. • Ouractivesellercommunitygrewto1.9million(upabout11%from2016)andouractivebuyer communitygrewto33.4million(upabout17%from2016). • Netincomewas$81.8millioncomparedwithanetlossof$29.9millionin2016. • Non-GAAPAdjustedEBITDA * was$80.0million,representinganincreaseof40.1%year-over-year, comparedto$57.1millionin2016.Non-GAAPAdjustedEBITDAmargin(i.e.,non-GAAPAdjusted EBITDAdividedbyrevenue)was18.1%,comparedto15.7%in2016. * See“Non-GAAPFinancialMeasures”forareconciliationofAdjustedEBITDAtonetincome(loss), themostdirectlycomparablefinancialmeasurecalculatedinaccordancewithGAAP. iv Proxy Statement Summary * About Etsy Etsyistheglobalmarketplaceforuniqueandcreativegoods.Weconnectcreativeentrepreneurs withthoughtfulconsumerslookingforitemsmadebyrealpeople.Ourmissionisto“Keep CommerceHuman”andwe’recommittedtousingthepowerofbusinesstostrengthen communitiesandempowerpeople. AsofDecember31,2017,ourmarketplaceconnected1.9millionactiveEtsysellersand 33.4millionactiveEtsybuyers,innearlyeverycountryintheworld.Oursellersaretheheartand soulofEtsy,andourtechnologyplatformallowsoursellerstoturntheircreativepassionsinto economicopportunity.Wehaveaseller-alignedbusinessmodel:wemakemoneywhenoursellers makemoney.WeofferawiderangeofSellerServicesandtoolsthatarespecificallydesignedto helpcreativeentrepreneursstart,manage,andscaletheirbusinesses. 2017 Business Highlights 2017wasatransformationalyearforEtsy.InMay2017,weappointedJoshSilvermanasourChief ExecutiveOfficerandRachelGlaserasourChiefFinancialOfficer,andinJuly2017,weappointed MikeFisherasourChiefTechnologyOfficer.JillSimeonejoinedasourGeneralCounselinJanuary 2017.Sincejoiningus,ournewmanagementteamhassoughttosharpenourfocusonkey initiativesandrealignourinternalresourcestopursuethehighestgrowthopportunitiesinordert delivervaluetoourstakeholders.Ournewmanagementteamidentifiedandbeganimplementinga newbusinessstrategyandbeganexecutingonthefourkeyinitiativesthatwebelievewillhelpEtsy andoursellerssucceed. * Thissummaryhighlightsthefinancial,compensation,andcorporategovernanceinformation describedinmoredetailelsewhereinthisProxyStatement.Thissummarydoesnotcontainall theinformationthatyoushouldconsider,andyoushouldreadtheentireProxyStatementbefore voting. iii FLIR SYSTEMS, INC. PROXYSTATEMENTSUMMARY PROXY STATEMENT SUMMARY This summary sets forth certain performance highlights and provides an overview of the more detailed information contained later in this report. It sets forth the proposals for vote. You should read the entire proxy statement before casting your vote. In thisproxystatement,theterms“FLIR,”“we,”and“our”refertoFLIRSystems,Inc. Highlights of the Company’s Performance Businesshighlightsfor 2017includethe following: Operational realignment In June 2017 we hired a new Chief Executive Officer, James J. Cannon, and in November 2017 we hiredanewChiefFinancialOfficer,CarolP.Lowe.Duringthefourthquarterof2017werealignedour operations to reduce our six operating segments into three business units for the fiscal year beginning January 1, 2018: Government and Defense, Industrial and Commercial. Streamlining the operations in this way is expected to reduce our complexity, improve our agility, unlock synergies, increase team collaboration, and enhance management focus to enhance growth and create sustainedshareholdervalue. Revenue During 2017, Revenue was $1.80 Billion, compared to $1.66 Billion for 2016, an increase of 8.4% over prior year. Revenue was a metric in our annual incentive plan and we achieved 99% of our targetforthismetricin2017. Earnings Per Share 2017GAAPnetearningsperdilutedsharewas$0.77comparedto$1.20in2016.GAAPnetearnings in 2017 were negatively impacted by discrete tax charges of $94.4 million related to the U.S. Tax Cuts and Jobs Act, as well as a $23.6 million pre-tax loss on assets held for sale. Adjusted earnings per share for the year ended December 31, 2017 was $1.88, compared to adjusted earnings per share for 2016 of $1.69, an increase in adjusted earnings per share of 11%. Adjusted earnings per share was a metric in our annual incentive plan and we achieved 99% of our target for this metric in 2017. Adjusted earnings per share and adjusted net income are non-GAAP financial measures that refertotheCompany’snetearningsandearningspershareinaccordancewithGAAP,asadjustedto reflect certain adjustments approved by the Compensation Committee. (See Appendix A for more information about non-GAAP financial measures used by the Company to monitor performance as wellasareconciliationtoGAAPmetrics). Operating cash flow During2017,wegenerated$308millionofcashflowfromoperations,representing117%ofadjusted net income. Operating cash flow was a metric in our annual incentive plan and after adjusting for certain items approved by our Compensation Committee we achieved 100% of our target for this metricin2017. New products and innovation We introduced a wide array of new products during 2017, many utilizing our revolutionary Lepton ® thermal microcamera and Boson longwave infrared thermal camera cores. For example, we introducedthirdgenerationFLIROnethermalcameraattachmentsforsmartphones,abroadarrayof outdoor and tactical thermal imagers using Boson and new thermal cameras for electronics development and testing, the oil and gas industry and plant and building professionals, as well as compactthermalmarinecameras,sonarequippednavigationequipmentandavarietyofinstruments andtestandmeasurementanddetectiondevices. 2018PROXYSTATEMENT FLIR i