Equity Awards

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Restricted Stock Units

The Company awarded the following restricted stock units ("RSUs") during the three months ended March 31, 2022:

•granted 195,398 RSUs to certain employees, which are subject only to a service condition and vest ratably over three years so long as the employee remains with the Company;

•granted 22,554 RSUs to its non-employee independent directors, which fully vest one year from date of grant so long as the director and/or Company does not terminate the director's service prior to the vesting date; and

•issued 337 RSUs related to director fee deferrals as certain of the Company's directors elected to defer all or a portion of their directors fees and to receive the amount in Company common stock at a future date.

•issued 58 RSUs to certain employees related to dividend equivalent rights on existing equity awards.

During 2022, the Company also awarded 85,156 performance-based RSUs to certain Company key employees which vest three years from the grant date as long as the employee remains with the Company. These awards are earned 50% based upon the Company's achievement of an earnings per share compound annual growth rate ("EPS CAGR") metric over a period beginning January 1, 2022 and ending December 31, 2024. The remaining 50% of the awards are earned based on the Company's total shareholder return ("TSR") relative to the TSR of the common stock of a pre-defined industry peer-group, measured over the performance period. TSR is calculated as the Company's average closing stock price for the 20 trading days at the end of the performance period plus Company dividends, divided by the Company's average closing stock price for the 20 trading days prior to the start of the performance period. The Company estimates the grant-date fair value subject to a market condition using a Monte Carlo simulation model, using the following weighted average assumptions: risk-free rate of 1.88% and annualized volatility of 36.5%. Depending on the performance achieved for these two metrics, the amount of shares earned, if any, can vary for each metric from 0% of the target award to a maximum of 200% of the target award. For similar performance-based RSUs awarded in 2019, the Company attained 65.4% of the target on a weighted average basis, resulting in a decrease of 24,975 shares during the three months ended March 31, 2022.

Information related to RSUs at March 31, 2022 is as follows:


	Number of Unvested RSUs	Weighted Average Grant Date Fair Value		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2022	673,732	$	27.38
Granted	303,503	33.19
Vested	(97,258)	28.52
Cancelled	(36,607)	35.91
Outstanding at March 31, 2022	843,370	$	28.97	1.3	$	27,063,743

As of March 31, 2022, there was approximately $13.2 million of unrecognized compensation cost related to unvested RSUs that is expected to be recorded over a weighted average period of 2.0 years.

The Company recognized stock-based compensation expense related to RSUs of approximately $2.8 million and $2.4 million during the three months ended March 31, 2022 and 2021, respectively. The stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statement of income.