The effect of recording stock-based compensation ("SBC") expense for continuing operations for the years ended December 31, 2022, 2021 and 2020 is as follows (in thousands):


	Years Ended December 31,
	2022		2021		2020
Research and development	$	1,644	$	1,895	$	2,189
Selling, general and administrative		21,201		23,733		17,954
Total stock-based compensation expense	$	22,845	$	25,628	$	20,143

In connection with termination of employment with a former executive on March 1, 2022, the Company entered into a Separation Agreement and Release with the executive, dated February 18, 2022 (the “Separation Agreement”). Pursuant to the Separation Agreement, the Company approved, among other severance benefits, accelerated vesting of 372,244 of outstanding performance and time-based restricted stock awards. As a result of this modification, the Company recorded incremental SBC expense of approximately $2.2 million during the first quarter of 2022.

As a result of the Separation and the conversion of the outstanding stock options and equity awards described in "Note 14 - Stockholders' Equity", the Company compared the fair value of the outstanding stock options immediately before and after the Separation and a total incremental cost of $0.4 million was recognized as part of stock-based compensation expense.

The total fair value of restricted stock awards vested during the years ended December 31, 2022, 2021 and 2020 was $48.7 million, $35.6 million and $45.7 million, respectively.

The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $0.02 million, $0.1 million and $0.1 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares.

As of December 31, 2022, there was no unrecognized stock-based compensation balance after estimated forfeitures related to unvested stock options, and there was $25.5 million related to restricted stock awards, including performance-based awards, to be recognized over an estimated weighted average period of 2.5 years.

The Company uses the Black-Scholes option pricing model to determine the estimated fair value of options and ESPP shares. The fair value of each option grant is determined on the date of grant and the expense is recorded on a straight-line basis over the offering period of two years. The assumptions used in the model include expected life, volatility, risk-free interest rate, and dividend yield. The Company’s determinations of these assumptions are outlined below.

Expected life – The expected life assumption is based on analysis of the Company’s historical employee exercise patterns. The expected life of options granted under the ESPP represents the offering period of two years.

Volatility – Volatility is calculated using the historical volatility of the Company’s common stock for a term consistent with the expected life. Historical volatility of the Company’s common stock is also utilized for the ESPP.

Risk-free interest rate – The risk-free interest rate assumption is based on the U.S. Treasury rate for issues with remaining terms similar to the expected life of the options.

Dividend yield – Expected dividend yield is calculated based on cash dividends declared by the Board for the previous four quarters and dividing that result by the average closing price of the Company’s common stock for the quarter. Cash dividends are not paid on options, restricted stock awards or unvested restricted stock awards.

In addition, the Company estimates forfeiture rates. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. Historical data is used to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest.

There were no stock options granted during the years ended December 31, 2022, 2021 and 2020.

The following assumptions were used to value the ESPP shares:


	Years Ended December 31,
	2022		2021		2020
Expected life (years)		2.0		2.0		2.0
Risk-free interest rate	1.3 - 4.3%		0.1 - 0.2%		0.1 - 1.4%
Dividend yield	1.1 - 2.3%		0.9 - 1.2%		1.4 - 4.0%
Expected volatility	48.5 - 69.0%		52.0 - 52.0%		45.8 - 57.5%

For the years ended December 31, 2022, 2021 and 2020, an aggregate of 1,301,000, 1,238,000 and 355,000 common shares, respectively, were purchased pursuant to the ESPP.

The Company uses a Monte Carlo simulation to determine the grant date fair value of performance stock awards subject to market conditions, or market-based PSUs. The following assumptions were used to value the performance stock awards subject to market conditions granted in the years ended December 31, 2022, 2021 and 2020:


	Years Ended December 31,
	2022			2021			2020
Expected life (in years)		3.0			3.0			3.0
Risk-free interest rate		2.8	%		0.3	%		0.2	%
Dividend yield		1.2	%		1.0	%		1.4	%
Expected volatility	37.5% - 40.9%				47.9	%		51.3	%