As of December 31, 2022, the Company had various stock-based awards outstanding which were issued to executives and other key employees. The Company recognizes the grant-date fair value of all stock-based awards to employees over their respective requisite service periods (generally equal to an award’s vesting period), net of estimated forfeitures. A stock-based award is considered vested for expense attribution purposes when the employee’s retention of the award is no longer contingent on providing subsequent service. For those awards that vest immediately upon retirement eligibility, the Company recognizes compensation cost immediately for retirement-eligible individuals or over the period from the grant date to the date retirement eligibility is achieved, if less than the stated vesting period.

The Company’s long-term incentive program for awarding stock-based compensation includes a combination of restricted stock, stock appreciation rights (“SARs”), and performance shares of the Company’s common stock pursuant to the Award Plan. Under the Award Plan, the Company may authorize up to 9.7 million shares of common stock to settle awards of restricted stock, performance shares, or SARs. The Company issues new shares to settle stock-based awards. In 2022, the Company's grant of stock-based awards included restricted stock, SARs and performance shares.

Stock-based compensation expense recognized by the Company was $24.5 million in 2022, $17.5 million in 2021 and $21.9 million in 2020. The total income tax benefit recognized was $3.9 million in 2022, $3.2 million in 2021, and $3.2 million in 2020. The net tax windfall recorded as a result of exercise or vesting (depending on the type of award) was $3.2 million, $6.8 million, and $3.4 million in 2022, 2021 and 2020, respectively. As of December 31, 2022, there was $18.1 million, pretax, of total unrecognized compensation cost related to non-vested share-based compensation arrangements. This cost is expected to be primarily recognized through 2025.

Stock-based compensation expense is recorded in S&A expense as well as Cost of goods sold. Of the total 2022 expense, $23.2 million was recorded to S&A expense and $1.3 million was recorded to Cost of goods sold. In 2021 and 2020, $15.8 million and $20.4 million, respectively, was recorded to S&A expense and $1.7 million and $1.5 million, respectively, was recorded to Cost of goods sold. Stock-based compensation costs capitalized to inventory was $0.4 million in each of 2022, 2021 and 2020.

The Company issues various types of restricted stock awards all of which are considered outstanding at the time of grant, as the award holders are entitled to dividends and voting rights. Unvested restricted stock awards are considered participating securities when computing earnings per share. Restricted stock grants are not transferable and are subject to forfeiture in the event of the recipient’s termination of employment prior to vesting.

Restricted stock awards that vest based upon a service condition are expensed on a straight-line basis over the requisite service period. These awards generally vest either in three equal installments on each of the first three anniversaries of the grant date or on the third year anniversary of the grant date. The fair value of these awards is measured by the average of the high and low trading prices of the Company’s common stock on the most recent trading day immediately preceding the grant date (“measurement date”).

In 2022, 2021 and 2020, each non-employee director received a restricted stock grant. These grants are made on the date of the annual meeting of shareholders and vest at the following year’s annual meeting of shareholders, or upon certain other events. The grant is subject to forfeiture if the director’s service terminates prior to the date of the next regularly scheduled annual meeting of shareholders. During 2022, 2021 and 2020, the Company granted 5,952 shares, 6,741 shares, and 7,413 shares, respectively, to non-employee directors.


	Shares	Weighted Average Grant Date Fair Value/Share
RESTRICTED STOCK AT DECEMBER 31, 2021	184	$	141.99
Shares granted	64	187.07
Shares vested	(56)	148.93
Shares forfeited	(13)	163.54
RESTRICTED STOCK AT DECEMBER 31, 2022	179	$	154.09

The weighted average fair value per share of restricted stock granted in 2022, 2021 and 2020 was $187.07, $166.46 and $145.48, respectively. The total fair value of restricted stock vested in 2022, 2021 and 2020 was $8.4 million, $12.6 million and $7.8 million, respectively.

SARs grant the holder the right to receive, once vested, the value in shares of the Company's common stock equal to the positive difference between the grant price, as determined using the mean of the high and low trading prices of the Company’s common stock on the measurement date, and the fair market value of the Company’s common stock on the date of exercise. This amount is payable in shares of the Company’s common stock. SARs vest and become exercisable in three equal installments during the first three years following the grant date and expire ten years from the grant date.


	Number of Rights	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
OUTSTANDING AT DECEMBER 31, 2021	907	$	132.78
Granted	143	186.62
Exercised	(245)	122.49
Forfeited	(26)	170.12
Canceled	—	—
OUTSTANDING AT DECEMBER 31, 2022	779	$	144.66	6.8 years	$	70,146
EXERCISABLE AT DECEMBER 31, 2022	452	$	127.44	5.7 years	$	48,506


Grant Date	Expected Dividend Yield		Expected Volatility		Risk Free Interest Rate		Expected Term	Weighted Avg. Grant Date Fair Value of 1 SAR
2022	2.1	%	27.4	%	1.9	%	4.9 years	$	39.68
2021	2.4	%	26.5	%	0.6	%	5.5 years	$	29.58
2020	2.5	%	23.5	%	1.3	%	5.5 years	$	24.52

The expected dividend yield was calculated by dividing the Company’s expected annual dividend by the average stock price for the past three months. Expected volatilities are based on historical volatilities of the Company’s stock for a period consistent with the expected term. The expected term of SARs granted was based upon historical exercise behavior of SARs. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the award.

Performance shares represent the right to receive a share of the Company’s common stock subject to the achievement of certain market or performance conditions established by the Company’s Compensation Committee and measured over a three year period. Partial vesting in these awards may occur after separation from the Company for retirement eligible employees. Shares are not vested until approved by the Company’s Compensation Committee.

In February 2020 and December 2018, the Company granted performance share awards with a target payout of 63,868 and 60,008 shares, respectively, that will vest subject to a performance condition and service requirement. The number of shares vested is then modified by a market condition as described below.

Thirty-four percent of the award granted will vest based on Hubbell’s compounded annual growth rate of Net sales as compared to that of the companies that comprise the S&P Capital Goods 900 index. Thirty-three percent of the award granted will vest based on achieved operating margin performance as compared to internal targets, and thirty-three percent of the award granted will vest based on achieved trade working capital as a percent of Net sales as compared to internal targets. Each of these performance conditions is measured over the same three-year performance period. The cumulative result of these performance conditions can result in a number of shares earned in the range of 0% - 200% of the target number of shares subject to the award. That cumulative performance achieved is then further modified based on the Company's three year TSR relative to the companies that constitute the S&P Capital Goods 900 index, to potentially increase or reduce the shares earned by a multiple of up to 1.5 or 1.2, depending on the award year.

The fair value of the award was determined based upon a lattice model. The Company expenses these awards on a straight-line basis over the requisite service period which includes an assessment of the performance achieved to date. The weighted average fair value per share was $151.78 for the awards granted in 2020 and $98.80 for the awards granted in 2018.


Grant Date	Shares Outstanding at 12/31/2022	Fair Value		Performance Period	Payout Range
2020	43,949	$	151.78	Jan 2020-Dec 2022	0-200% + up to a multiple of 150x
2018	—	$	98.80	Jan 2019-Dec 2021	0-200% + up to a multiple of 120x

During 2022, approximately 38,000 shares from the 2018 awards vested as a result of the cumulative achievement of the performance metrics, and the fair value of the awards at vesting was approximately $7.3 million.

In February 2022 and 2021, the Company granted performance share awards with a target payout of 14,076 and 15,741 shares, respectively, that will vest subject to a market condition and service condition through the performance period. The market condition associated with the awards is the Company's total shareholder return ("TSR") compared to the TSR generated by the companies that comprise the S&P Capital Goods 900 index over a three year performance period. Performance at target will result in vesting and issuance of the number of performance shares subject to the award, equal to 100% payout. Performance below or above target can result in issuance in the range of 0%-200% of the number of shares subject to the award. Expense is recognized irrespective of the market condition being achieved.

The fair value of the performance share awards with a market condition for these grants was determined based upon a lattice model. The following table summarizes the related assumptions used to determine the fair values of the performance share awards with a market condition granted during February 2022 and 2021:


Grant Date	Stock Price on Measurement Date	Dividend Yield	Expected Volatility	Risk Free Interest Rate	Expected Term	Weighted Avg. Grant Date Fair Value
February 2022	$185.87	2.3%	39.7%	1.6%	2.9 years	$221.94
February 2021	$163.26	2.4%	40.6%	0.2%	3 years	$198.89

Expected volatilities are based on historical volatilities of the Company's and members of the peer group's stock over the expected term of the award. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the expected term of the award.

In February 2022 and 2021, the Company granted performance share awards with a target payout of 28,628 and 31,543 shares, respectively, that will vest subject to an internal Company-based performance condition and service requirement.

Fifty percent of these performance shares subject to the award will vest based on Hubbell's compounded annual growth rate of Net sales as compared to that of the companies that comprise the S&P Capital Goods 900 index. Fifty percent of these performance shares subject to the award will vest based on achieved operating profit margin performance as compared to internal targets. Each of these performance conditions is measured over the same three-year performance period. The cumulative result of these performance conditions can result in a number of shares earned in the range of 0%-200% of the target number of shares subject to the award.

The fair value of the award is measured based upon the average of the high and low trading prices of the Company's common stock on the measurement date reduced by the present value of dividends expected to be paid during the requisite service period. The Company expenses these awards on a straight-line basis over the requisite service period and including an assessment of the performance achieved to date. The weighted average fair value per share was $174.48 and $151.92 for the awards granted in 2022 and 2021, respectively.