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Employee Stock Purchase Plan, Stock Options and Warrants (Tables)

12 Months Ended

Dec. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The stock-based compensation expense before income tax expense for the years ended December 31, 2022, 2021 and 2020, consisted of the following (in thousands):


	2022		2021		2020
Cost of sales
Nonqualified stock options	$	1,606	$	1,476	$	1,357
Research and development
Nonqualified stock options		1,789		1,343		1,157
Selling, general and administrative
Nonqualified stock options		7,305		6,678		7,332
Performance-based restricted stock units		3,509		3,525		2,829
Restricted stock units		1,836		1,557		758
Cash-settled performance-based share-based awards ("Liability Awards")		1,997		1,511		906
Total selling, general and administrative		14,647		13,271		11,825

Stock-based compensation expense before taxes	$	18,042	$	16,090	$	14,339

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

In applying the Black-Scholes methodology to the option grants, the fair value of our stock-based awards granted was estimated using the following assumptions for the years ended December 31, 2022, 2021 and 2020:


	2022	2021	2020
Risk-free interest rate	1.4% - 4.3%	0.5% - 1.1%	0.3% - 1.7%
Expected option term	4.0 years	4.0 years	4.0 - 5.0 years
Expected dividend yield	—	—	—
Expected price volatility	46.2% - 47.5%	46.1% - 46.7%	38.7% - 45.1%

Schedule of Share-based Compensation, Stock Option Activity

The table below presents information related to stock option activity for the years ended December 31, 2022, 2021 and 2020 (in thousands):


	2022		2021		2020
Total intrinsic value of stock options exercised	$	27,110	$	36,086	$	11,733
Cash received from stock option exercises		18,952		20,194		5,481
Excess tax benefit from the exercise of stock options		3,423		5,571		1,815

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable

Changes in stock options for the year ended December 31, 2022, consisted of the following (shares and intrinsic value in thousands):


	Number	Weighted Average		Remaining Contractual	Intrinsic
	of Shares	Exercise Price		Term (in years)	Value
Beginning balance	3,640	$	44.70
Granted	251		63.69
Exercised	(703)		28.58
Forfeited/expired	(111)		53.16
Outstanding at December 31	3,077		49.62	3.51	$	64,634
Exercisable	1,792		43.50	2.61		48,595
Ending vested and expected to vest	3,013		49.37	3.47		64,026

Schedule of Share-based Compensation, PSUs and RSUs, Activity

Changes in PSUs and RSUs for the year ended December 31, 2022, consisted of the following:


	PSUs				RSUs
			Weighted Average			Weighted Average
	Stock Units		Grant Date		Stock Units	Grant Date
	(In Thousands)	⁽¹⁾	Fair Value		(In Thousands)	Fair Value
Beginning nonvested balance	163		$	53.71	26	$	61.77
Granted	97			64.54	31		59.02
rTSR adjustment	8	⁽²⁾		65.03	—		—
Vested	(44)			65.03	(26)		61.77
Forfeited	(45)			60.81	—		—
Nonvested balance at December 31	179			65.20	31		59.02

(1)

Based on the maximum payout, excluding the impact of the rTSR multiplier. The actual number of shares which vest is determined based on the satisfaction of performance conditions and the application of an rTSR multiplier between 75% and 125%.

(2)

Represents the application of an rTSR multiplier of 125% to awards vested in 2022 based on the performance of our common stock and the terms of the awards.

Schedule of Share-based Compensation, PSUs and RSUs Granted

The following table summarizes PSUs and RSUs granted during the years ended December 31, 2022, 2021, and 2020 (units and shares in thousands):


	2022		2021		2020
PSUs
Target units granted		48		52		61
Maximum units granted ⁽¹⁾		97		103		102	⁽³⁾
Maximum potential shares⁽¹⁾⁽²⁾		121		129		127	⁽³⁾
Weighted average grant date fair value	$	64.54	$	61.39	$	43.63
RSUs
Units granted		31		26		34
Weighted average grant date fair value	$	59.02	$	61.77	$	42.98

(1)

Based on the maximum payout, excluding the impact of the rTSR multiplier.

(2)

Includes the impact of the maximum potential rTSR multiplier of 125%.

(3)

Includes the impact of the 2020 amendment which reduced the maximum FCF multiplier for one-year awards from 200% to 100%.

Schedule of Share-based Payment Award, PSUs, Valuation Assumptions

The fair value of each PSU was estimated as of the grant date using the following assumptions for awards granted in the years ended December 31, 2022 and 2021:


	2022	2021
Risk-free interest rate	1.6% - 2.7%	0.1% - 0.3%
Performance period	2.6 - 2.8 years	1.8 - 2.8 years
Expected dividend yield	—	—
Expected price volatility	38.5% - 42.6%	43.7% - 49.3%