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 (for options granted before March 2021) or the Black Scholes valuation model (for options granted after February 2021).


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Weighted average fair value of grants	$43.89	$29.26	$38.63	$34.26
Dividend yield	0.94%	1.34%	1.01%	1.15%
Volatility	24.67%	22.17%	23.74%	22.01%
Risk-free interest rate	0.76% - 0.91%	0.95% - 1.12%	0.10% - 1.56%	1.42% - 1.68%
Expected life (in years)	4.90	5.76	5.73	5.80


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of goods sold	$	109	$	97	$	336	$	282
Selling, general and administrative expenses	1,786		2,127		4,480		5,272
Total expense before income taxes	1,895		2,224		4,816		5,554
Income tax benefit	(175)		(218)		(448)		(585)
Total expense after income taxes	$	1,720	$	2,006	$	4,368	$	4,969

A summary of the Company’s stock option activity as of June 30, 2021 and changes during the six months ended June 30, 2021 are presented in the following table:


Stock Options	Shares	Weighted Average Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2021	963,726	$	125.70	6.94	$	70,829,529
Granted	269,420	197.28
Exercised	(98,393)	108.61
Forfeited	(32,942)	117.93
Outstanding at June 30, 2021	1,101,811	$	143.63	7.27	$	84,203,605
Vested and expected to vest as of June 30, 2021	1,044,315	$	141.56	7.17	$	81,973,948
Exercisable at June 30, 2021	526,876	$	106.77	5.56	$	59,683,365

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 June 30, 2021 and changes during the six months ended June 30, 2021 are presented as follows:


Restricted Stock	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2021	111,300	$	147.13
Granted	29,235	201.85
Vested	(26,686)	135.57
Forfeited	(4,515)	162.12
Unvested at June 30, 2021	109,334	$	164.35

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of goods sold	$	66	$	77	$	233	$	186
Selling, general and administrative expenses	1,120		864		2,566		1,846
Total expense before income taxes	1,186		941		2,799		2,032
Income tax benefit	(246)		(197)		(582)		(426)
Total expense after income taxes	$	940	$	744	$	2,217	$	1,606

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 June 30, 2021 and changes during the six months ended June 30, 2021 are presented in the following table:


Cash-Settled Restricted Stock	Shares	Weighted-Average Fair Value
Unvested at January 1, 2021	63,940	$	199.20
Granted	19,755	197.45
Vested	(22,781)	199.67
Forfeited	(1,960)	220.05
Unvested at June 30, 2021	58,954	$	220.05

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of goods sold	$	144	$	241	$	354	$	312
Selling, general and administrative expenses	1,061		925		2,331		1,114
Total expense before income taxes	1,205		1,166		2,685		1,426
Income tax benefit	(99)		(120)		(212)		(136)
Total expense after income taxes	$	1,106	$	1,046	$	2,473	$	1,290

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.


	Six Months Ended June 30,
	2021	2020
Weighted average fair value of grants	$247.49	$224.14
Dividend yield	—%	—%
Volatility	28.6%	19.5%
Risk-free interest rate	0.33%	1.30%
Expected life (in years)	2.93	2.94

A summary of the Company’s performance share unit activity as of June 30, 2021 and changes during the six months ended June 30, 2021 are presented in the following table:


Performance Share Units	Shares	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2021	58,695	$	218.16
Granted	29,020	247.49
Vested	—	—
Forfeited	(5,850)	212.44
Unvested at June 30, 2021	81,865	$	227.90

On December 31, 2020, 24,305 performance share units vested. Based on the Company’s relative total shareholder return rank during the three year period ended December 31, 2020, the Company achieved a 201% payout factor and issued 48,867 common shares in February 2021 for awards that vested in 2020.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of goods sold	$	—	$	—	$	—	$	—
Selling, general and administrative expenses	1,207		2,604		2,945		4,653
Total expense before income taxes	1,207		2,604		2,945		4,653
Income tax benefit	(78)		(59)		(111)		(108)
Total expense after income taxes	$	1,129	$	2,545	$	2,834	$	4,545

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 June 30, 2021, there was $13.0 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.3 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 1.1 years, $5.0 million of total unrecognized compensation cost related to cash-settled restricted shares that is expected to be recognized over a weighted-average period of 1.1 years and $7.5 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 0.9 years.