Equity Incentive Program (Notes)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-based compensation expense recognized in the Consolidated Statements of Earnings totaled $3.5 million and $6.7 million for the three months ended March 31, 2020 and 2019, respectively.

Stock Options and SSARs

The expense related to stock options granted in the three months ended March 31, 2020 and 2019 was estimated on the date of grant using a Black-Scholes option-pricing model based on the assumptions shown in the table below:


	Three Months Ended March 31,
	2020						2019
Risk-free interest rate	1.42%						2.44%
Dividend yield	—%						—%
Expected life (years)	4.3	to	4.5			4.5
Volatility	38.8%	to	40.6		%	42.9%

Fair value at date of grant	$5.56	to	$	5.95		$6.22

The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the three months ended March 31, 2020 (in millions, except share and per share amounts):


	SSARs											Stock Options
	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)
Outstanding at December 31, 2019	596,537	$	22.72				5,377,148	$	17.51
Granted	—	—					886,799	16.77

Exercised	—	—					(14,475)	15.66
Forfeited	—	—					(59,306)	17.00
Expired	—	—					(9,379)	24.33
Outstanding at March 31, 2020	596,537	$	22.72	$	—	2.1	6,180,787	$	17.40	$	3.1	3.6

Exercisable at March 31, 2020	596,537	$	22.72	$	—	2.1	4,523,952	$	17.81	$	3.1	2.6

There was no unrecognized compensation expense related to SSARs at March 31, 2020. At March 31, 2020, unrecognized compensation expense related to stock options not yet exercisable of $8.6 million is expected to be recognized over a weighted-average period of 2.2 years.

RSUs

The following table summarizes the Company's restricted stock unit ("RSU") activity for the three months ended March 31, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	2,261,114	$	15.99
Granted	1,275,046	16.77

Vested ⁽¹⁾	(907,352)	16.24
Forfeited	(279,249)	15.99
Unvested at March 31, 2020	2,349,559	$	16.35

⁽¹⁾ The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

At March 31, 2020, $32.1 million of unrecognized compensation expense related to RSUs is expected to be recognized over a weighted-average period of 2.0 years.

PSUs

The Company grants performance stock units ("PSUs") to senior management. In each case, the awards will cliff vest three years following the grant date. For the awards granted in February 2018 and 2017, the number of PSUs that may be earned and vest is based on the Company's revenues and stock price performance over a three year performance period. For the awards granted in February 2019, the number of PSUs that may be earned and vest is based on the Company's revenues and total shareholder return relative to the S&P Semiconductor Select Industry Index over a three year performance period. For the awards granted in February 2020, the number of PSUs that may be earned and vested is based on total shareholder return relative to the S&P Semiconductor Select Industry Index over a three year performance period.

PSUs will be settled in shares of the Company's common stock. Depending on the Company's overall performance relative to the applicable performance metrics, the size of the PSU awards are subject to adjustment, up or down, resulting in awards at the end of the performance period that can range from 0% to 225% of the initial grant value. In February 2020, the awards granted in February 2017 were converted from 176,154 PSUs to 88,959 shares of stock based on an achievement of performance metrics. The Company will ratably recognize the expense over the applicable service period for each grant of PSUs and adjust the expense as appropriate. The fair value of the PSUs is determined by using a Monte Carlo simulation.

The following table summarizes the Company's PSU activity for the three months ended March 31, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	844,789	$	15.90
Granted	322,178	16.14

Vested ⁽¹⁾	(176,154)	15.38
Forfeited	(47,317)	15.85
Unvested at March 31, 2020	943,496	$	16.08

⁽¹⁾ The number of PSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

At March 31, 2020, $7.8 million of unrecognized compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.8 years.