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Share-Based Compensation and Capital Stock
 3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation and Capital Stock Share-Based Compensation and Capital Stock
The components of the Company’s pretax share-based compensation activity and associated income tax benefit are as follows for three months ended March 31, 2021 and 2020:
 Three Months Ended
March 31,
(in thousands)20212020
Stock options$616 $491 
Restricted stock awards2,519 1,944 
Performance vested restricted stock units1,666 (5,187)
Total share-based compensation expense$4,801 $(2,752)
Income tax benefit (expense)$1,157 $(674)
A summary of share-based award activity as of and changes during the three months ended March 31, 2021 are presented below:
 Stock OptionsRestricted StockPerformance Vested
Restricted Stock Units
 OptionsWeighted
Average
Exercise
Price		Weighted
Average
Remaining
Contractual
Term		SharesWeighted
Average
Grant Date
Fair Value		SharesWeighted
Average
Grant Date
Fair Value
Outstanding at January 1, 2021819,610 $70.48 304,439 $84.48 321,752 $109.25 
Granted280,811 104.87 43,607 105.24 96,447 108.52 
Performance-Based Leveraging (1)
— — — — 920 81.55 
Exercised/Vested(48,237)59.00 (84,711)82.20 (3,986)81.55 
Expired— — — — (72,944)81.55 
Forfeited— — (5,998)82.63 (1,003)97.68 
Outstanding at March 31, 20211,052,184 $80.19 5.7 years257,337 $88.79 341,186 $113.22 
Options exercisable at March 31, 2021556,285 $65.32 3.1 years
(1) PVRSUs outstanding have been increased by 920 units in the three months ended March 31, 2021 due to the Company exceeding the targeted performance conditions contained in PVRSUs granted in prior periods.
Stock Options
The stock options granted by the Company had an exercise price equal to the market price of the Company's common stock on the date of grant. The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:
2021 Grants
Risk-free interest rate0.94 %
Expected volatility29.23 %
Expected life of stock option5.9 years
Dividend yield (1)
0.82 %
Requisite service period4 years
Contractual life10 years
Weighted average fair value of options granted (per option)$28.00 
(1) In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends. On May 7, 2021, the Company's board of directors declared a quarterly cash dividend of $0.225 per share of common stock. Refer to Note 14.
Restricted Stock Awards
The Company grants two types of restricted stock awards: i) shares of restricted stock and ii) restricted stock units ("RSU"). Shares of restricted stock provide the participant a non-forfeitable right to dividends, if declared, and the right to vote as a shareholder while the shares are unvested. RSUs provide the participant declared dividends that are contingent upon vesting of the award. Restricted stock awards generally vest ratably over the service period beginning with the first anniversary of the grant date. The fair value of restricted stock awards is measured by the market price of the Company's common stock on the
date of grant. The service period of restricted stock awards granted during the three months ended March 31, 2021 range from 9 to 48 months.
Performance Vested Restricted Stock Units
The Company grants three types of PVRSU awards: i) PVRSUs with performance conditions based on internal performance conditions, ii) PVRSUs with market conditions based on the Company's total shareholder return ("TSR") relative to a predetermined peer group, and iii) PVRSUs with both performance and market conditions. The vesting of PVRSU awards is contingent upon the Company achieving internal performance and/ or TSR targets over a specified period and the employees' continued employment for a service period. These performance and market conditions affect the number of shares that will ultimately vest.
During the three months ended March 31, 2021, the Company granted PVRSUs with market conditions and PVRSUs with performance and market conditions with requisite service periods between 9 months and 60 months with award vesting ranges between 0% and 300% of the initial units granted.
The fair value of PVRSUs with only internal performance conditions is measured by the market price of the Company's common stock on the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions. Management monitors current results and forecasts of the relevant internal performance and, as necessary, adjusts the performance-based leveraging of unvested PVRSUs.
The fair value of PVRSUs with market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period, regardless of whether the market conditions are achieved and the awards ultimately vest.
The fair value of PVRSUs with both performance and market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions, with subsequent adjustments made for performance-based leveraging of unvested PVRSUs, as necessary.
During the three months ended March 31, 2020, the Company reduced the leveraging factor for 227,114 unvested PVRSUs periods to 0%.
Share Repurchases and Redemptions
There were no purchases of common stock under the share repurchase program during the three months ended March 31, 2021. During three months ended March 31, 2021, the Company redeemed 46,499 shares of common stock at a total cost of $5.1 million from employees to satisfy the option exercise price and statutory minimum tax-withholding requirements related to the exercising of stock options and vesting of performance vested restricted stock units and restricted stock grants. These redemptions were outside the share repurchase program.
In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, the Company temporarily suspended activity under the Company's share repurchase program. On May 7, 2021, the Company's board of directors approved resumption of the share repurchase program. Refer to the Liquidity and Capital Resources header of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.