Share-Based Compensation

12 Months Ended

Dec. 31, 2022

8. Share-Based Compensation

The Company has traditionally maintained separate stock plans for non-employee directors, the 2012 Non-Employee Directors Stock Plan, and employees, the 2017 Stock Plan, under which directors and employees may be granted non-vested stock that vests over a specific time-period. In April 2017, the shareholders of the Company approved the 2017 Stock Plan authorizing 1.8 million shares for issuance as non-vested stock in the form of restricted stock, restricted stock units, performance stock units, non-qualified stock options, incentive stock options, and stock appreciation rights. In April 2022, the shareholders of the Company approved an Amended and Restated 2017 Stock Plan. The Amended and Restated 2017 Stock plan incorporates substantially all of the key terms of the Company’s 2012 Non-Employee Directors Stock Plan into the Company’s existing 2017 Stock Plan, creating one omnibus plan covering the Company’s non-employee directors, officers, and key employees. The total number of shares of common stock reserved for issuance under the Amended and Restated 2017 Stock Plan increased by 350 thousand shares (from 1.8 million to 2.15 million in aggregate), plus any cancellations of shares issued under the Amended and Restated 2017 Stock Plan. As of December 31, 2022, there were 1.3 million shares available to issue as non-vested stock under the Company’s Amended and Restated 2017 Stock Plan. The Company may also issue up to 0.2 million shares of stock pursuant to its 1999 Amended and Restated Directors Deferred Compensation Plan.

The Company recognizes expense for shares of non-vested stock over a three-year vesting period with a pro-rata vesting upon retirement. During the period of restriction, the holder of non-vested stock has voting rights and is entitled to receive all dividends and other distributions paid with respect to the stock. The holders of the performance stock units are not entitled to vote or receive dividends and other distributions paid with respect to the stock, until the units have vested and shares of stock issued.

Grants issued after December 2013 and before December 2020 to elected officers consist of 100% performance stock unit awards. These awards are based on a three-year performance period and a three-year vesting period with a pro-rata vesting upon retirement. Three-year performance that exceeds the stated performance metrics would result in an award up to 200% of the original grant. Starting with the December 2020 grant, grants issued to elected officers consist of 60% performance stock unit awards and 40% non-vested restricted stock awards. The performance stock unit awards are based on a three-year performance period and a three-year vesting period with a pro-rata vesting upon retirement. Three-year performance that exceeds the stated performance metrics would result in an award up to 200% of the original grant. The non-vested restricted stock awards granted are based on a three-year vesting period with a pro-rata vesting upon retirement.

The Company expenses awards for non-vested stock, including time-vesting stock and performance stock units, based on the fair value of the Company’s common stock at the date of the grant.

The following table summarizes the non-vested stock and performance stock unit activity:

(In thousands except fair value)	Shares			Grant Date Weighted Average Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2019		404		$	64.89		26,710
Granted		142			65.61
Vested		(27	)		74.21
Cancelled		(68	)		73.39
Outstanding at December 31, 2020		451		$	63.28		33,283
Granted		129			90.10
Vested		(25	)		61.91
Cancelled		(73	)		72.37
Outstanding at December 31, 2021		482		$	69.15	$	48,271
Granted		168			73.52
Vested		(62	)		58.81
Cancelled		(69	)		58.62
Outstanding at December 31, 2022		519		$	73.19	$	37,883

The total intrinsic values of shares vested during 2022, 2021, and 2020, was $5.1 million, $1.9 million, and $1.4 million, respectively.

As of December 31, 2022, total remaining unearned compensation, net of expected forfeitures, related to non-vested stock and performance stock units was $23.3 million, which will be amortized over the weighted average remaining service period of 2.15 years.

Total pre-tax share-based compensation expense recognized in the Consolidated Statements of Earnings was $16.1 million, $9.6 million, and $5.6 million in 2022, 2021, and 2020, respectively. The Company also recognized tax related benefits of $1.2 million, $1.0 million, and $0.8 million, in 2022, 2021, and 2020, respectively.