The Company typically grants equity awards annually at its regularly scheduled first quarter meeting of the Board of Directors based on the recommendation from the Compensation Committee.

Stock options generally vest ratably over four years. Weighted average option fair values and assumptions for the periods specified are disclosed below. The fair value of each option grant was estimated on the date of the grant using the Binomial lattice option pricing model.



	Three Months Ended March 31,
	2020	2019
Weighted average fair value of grants	$34.34	$35.17
Dividend yield	1.15%	1.18%
Volatility	22.01%	24.79%
Risk-free interest rate	1.43% - 1.68%	2.53% - 3.05%
Expected life (in years)	5.80	5.87



	Three Months Ended March 31,
	2020			2019
Cost of goods sold	$	185		$	192
Selling, general and administrative expenses	3,145			2,540
Total expense before income taxes	3,330			2,732
Income tax benefit	(367		)	(368		)
Total expense after income taxes	$	2,963		$	2,364

A summary of the Company’s stock option activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented in the following table:



Stock Options	Shares		Weighted Average Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	1,386,539		$	103.58	6.95	$	94,764,140
Granted	341,285		173.31
Exercised	(27,978	)	74.68
Forfeited	(22,665	)	131.64
Outstanding at March 31, 2020	1,677,181		$	117.88	7.36	$	48,014,239
Vested and expected to vest as of March 31, 2020	1,214,651		$	80.14	4.78	$	36,239,484
Exercisable at March 31, 2020	562,925		$	80.05	5.38	$	32,686,084

Restricted stock awards generally cliff vest after three years for employees and non-employee directors. Unvested restricted stock carries dividend and voting rights and the sale of the shares is restricted prior to the date of vesting. A summary of the Company’s restricted stock activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented as follows:



Restricted Stock	Shares		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020	130,248		$	124.61
Granted	26,670		173.25
Vested	(37,761	)	94.52
Forfeited	(6,990	)	128.12
Unvested at March 31, 2020	112,167		$	146.01

Dividends are paid on restricted stock awards and their fair value is equal to the market price of the Company’s stock at the date of the grant.



	Three Months Ended March 31,
	2020			2019
Cost of goods sold	$	109		$	138
Selling, general and administrative expenses	982			1,288
Total expense before income taxes	1,091			1,426
Income tax benefit	(229		)	(275		)
Total expense after income taxes	$	862		$	1,151

The Company also maintains a cash-settled share based compensation plan for certain employees. Cash-settled restricted stock awards generally cliff vest after three years. Cash-settled restricted stock awards are recorded at fair value on a quarterly basis using the market price of the Company’s stock on the last day of the quarter. A summary of the Company’s unvested cash-settled restricted stock activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented in the following table:



Cash-Settled Restricted Stock	Shares		Weighted-Average Fair Value
Unvested at January 1, 2020	74,560		$	172.08
Granted	20,365		173.35
Vested	(24,240	)	173.35
Forfeited	(805	)	138.11
Unvested at March 31, 2020	69,880		$	138.11

Dividend equivalents are paid on certain cash-settled restricted stock awards. Total compensation cost for cash-settled restricted stock is as follows:



	Three Months Ended March 31,
	2020			2019
Cost of goods sold	$	71		$	500
Selling, general and administrative expenses	189			1,530
Total expense before income taxes	260			2,030
Income tax benefit	(16		)	(187		)
Total expense after income taxes	$	244		$	1,843

Weighted average performance share unit fair values and assumptions for the period specified are disclosed below. The performance share units are market condition awards and have been assessed at fair value on the date of grant using a Monte Carlo simulation model.



	Three Months Ended March 31,
	2020	2019
Weighted average fair value of grants	$224.14	$203.06
Dividend yield	—%	—%
Volatility	19.5%	19.08%
Risk-free interest rate	1.30%	2.53%
Expected life (in years)	2.94	2.84

A summary of the Company’s performance share unit activity as of March 31, 2020 and changes during the three months ended March 31, 2020 are presented in the following table:



Performance Share Units	Shares		Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020	100,575		$	178.97
Granted	42,690		224.14
Vested	—		—
Forfeited	(4,185	)	211.73
Unvested at March 31, 2020	139,080		$	215.46

On December 31, 2019, 54,545 performance share units vested. Based on the Company’s relative total shareholder return rank during the three year period ended December 31, 2019, the Company achieved a 250% payout factor and issued 136,370 common shares in February 2020.



	Three Months Ended March 31,
	2020			2019
Cost of goods sold	$	—		$	—
Selling, general and administrative expenses	2,049			1,372
Total expense before income taxes	2,049			1,372
Income tax benefit	(49		)	(48		)
Total expense after income taxes	$	2,000		$	1,324

The Company’s policy is to recognize compensation cost on a straight-line basis, assuming forfeitures, over the requisite service period for the entire award. Classification of stock compensation cost within the Condensed Consolidated Statements of Operations is consistent with classification of cash compensation for the same employees.

As of March 31, 2020, there was $19.3 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.5 years, $7.7 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 1.2 years, $4.2 million of total unrecognized compensation cost related to cash-settled restricted shares that is expected to be recognized over a weighted-average period of 1.2 years and $14.1 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 1.1 years.