The Company’s 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”) was approved by shareholders on May 7, 2013 and replaced the 2003 Incentive Stock and Awards Plan (the “2003 Stock Plan”). The 2013 Omnibus Plan also replaced the Company’s Short-Term Incentive Plan (the “STIP”) as of December 31, 2013. The 2003 Stock Plan and the STIP are referred to cumulatively as the “Prior Plans.” No new awards may be granted under the Prior Plans after the respective termination dates, but the Prior Plans continue to govern awards outstanding issued thereunder; outstanding awards will continue in force and effect until vested, exercised or forfeited pursuant to their terms. The 2013 Omnibus Plan provides for both short-term and long-term incentive awards for employees and non-employee directors. Stock-based awards may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units, and performance share or performance unit awards. The total number of shares of the Company’s common stock available for awards under the 2013 Omnibus Plan is 7,477,395 shares. The total number of shares of the Company’s common stock still available for issuance as of December 31, 2022 is 3,965,516.

The Company recognizes expense net of estimated future forfeitures for all stock-based compensation on a straight-line basis over the vesting period of the entire award. Estimated future forfeitures are based on the Company’s historical experience.

During the years ended December 31, 2022 and 2021, the Company recorded stock-based compensation expense of $8.5 million and $7.1 million, respectively, in engineering, selling and administrative expense in the Consolidated Statement of Operations.

During the year ended December 31, 2020, the Company recorded stock-based compensation expense of $6.0 million of which $8.5 million was recorded in engineering, selling and administrative expense and $2.5 million of income was recorded in restructuring expense in the Consolidated Statement of Operations. Income recorded in restructuring expense was primarily related to the forfeiture of grants associated with employee separation agreements.

Shares are issued out of treasury stock upon exercise for stock options and vesting of restricted stock units and performance share units.

Stock option grants to employees are exercisable in three annual increments over a three-year period beginning on the first anniversary of the grant date and expire 10 years subsequent to the grant date.

The Company did not grant employees stock options in 2022 or 2021. The Company granted stock options to employees to acquire 250,432 shares of common stock during the year ended December 31, 2020. Stock-based compensation expense is calculated by estimating the fair value of non-qualified stock options at the time of grant and is amortized over the stock options’ vesting period. The Company recognized $0.1 million, $0.6 million and $1.3 million of expense before income taxes associated with stock options during the years ended December 31, 2022, 2021 and 2020, respectively.


	Shares			Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
Options outstanding as of December 31, 2021		625,317		$	20.76
Granted		—			—
Exercised		(10,728	)		13.29
Forfeited		(14,145	)		12.37
Cancelled		(47,521	)		20.64
Options outstanding as of December 31, 2022		552,923		$	21.13	$	—

Options exercisable as of December 31, 2022		527,852		$	21.55	$	—

The Company uses the Black-Scholes valuation model to value stock options. The Company’s volatility assumption was based on a blend of its historical stock price and an average of historical stock prices of selected peers. The assumed risk-free rate was based on U.S. Treasury rates in effect at the time of grant with varying maturities weighted commensurately with the expected life assumption. The expected option life represents the period of time options are expected to be outstanding and is based on historical experience.

The weighted average fair value per share of options granted during the year ended December 31, 2020 was $5.35. The fair value of each option grant was estimated at the date of grant using the following assumptions:


	2020
Expected life (years)		6.5
Risk-free interest rate		1.2	%
Expected volatility		42.3	%
Expected dividend yield		—	%

The Company granted 413,543, 417,535 and 410,877 restricted stock units inclusive of director awards in 2022, 2021 and 2020, respectively. A total of 56,640, 59,280 and 77,608 equity compensation awards were granted to directors in 2022, 2021 and 2020, respectively, which vested immediately upon the grant date. The Company recognized $5.2 million, $4.7 million and $4.5 million of compensation expense associated with restricted stock units during the years ended December 31, 2022, 2021 and 2020, respectively.

With the exception of director grants, the restricted stock units are earned based on service over the vesting period. Restrictions on restricted stock units granted to employees lapse in three annual increments over a three-year period beginning on the first anniversary of the grant date. The expense is based on the fair value of the Company's shares as of the grant date which is the grant date closing stock price.

The activity for restricted stock units is summarized as follows:


	Shares			Weighted Average Grant Date Fair Value Per Share
Unvested as of December 31, 2021		614,984		$	15.93
Granted		413,543			17.00
Vested		(290,876	)		16.03
Forfeited		(90,439	)		17.08
Unvested as of December 31, 2022		647,212		$	16.45

As of December 31, 2022, the Company has $5.2 million of unrecognized compensation expense before income tax related to restricted stock units which will be recognized over a weighted average period of 1.8 years.

The Company granted 122,280, 159,247 and 328,310 of performance share units in 2022, 2021 and 2020, respectively. The performance share units are earned based on service over the vesting period and only to the extent to which performance goals are met over the applicable three-year performance period. The performance goals vary for performance share units each grant year. The Company recognized $3.2 million, $1.9 million and $0.2 million of compensation expense associated with performance share units during the years ended December 31, 2022, 2021 and 2020, respectively.

The performance goals for the performance share units granted in 2022 are weighted 60% on the 3-year average of the Company’s adjusted EBITDA percentage from 2022 to 2024 and 40% on non-new machine sales for the year ending December 31, 2024. The Company defines non-new machine sales as parts sales, used crane sales, rental revenue, service revenue and other revenue. The 2022 performance share units include a +/-20% modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200% of target shares granted.

The performance goals for the performance share units granted in 2021 are weighted 60% on the 3-year average of the Company’s adjusted EBITDA percentage from 2021 to 2023 and 40% on non-new machines sales as of the year ended December 31, 2023. The 2021 performance share units include a +/-20% modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200% of target shares granted.

The performance goals for the performance share units granted in 2020 are based on the 3-year average of the Company’s adjusted EBITDA percentage from 2020 to 2022 with a +/-20% modifier based on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200% of target shares granted.


	Shares			Weighted Average Grant Date Fair Value Per Share
Unvested as of December 31, 2021		500,684		$	17.45
Granted		122,280			19.36
Vested		(45,432	)		21.98
Forfeited		(117,758	)		16.58
Unvested as of December 31, 2022		459,774		$	17.30

As of December 31, 2022, the Company has $4.1 million of unrecognized compensation expense before income tax related to performance share units is expected to be recognized over a weighted average period of 1.7 years.

The Company uses the Monte Carlo valuation model to determine fair value of the performance share unit grants. The Company used an average of historical stock prices of selected peers for its volatility assumption. The assumed risk-free rates were based on three-year U.S. Treasury rates in effect at the time of grant. The fair value of each total shareholder return performance share unit was estimated at the date of grant using the following assumptions:


	2022			2021			2020
Correlation		25.9	%		27.9	%		32.2	%
Risk-free interest rate		1.7	%		0.2	%		1.1	%
Expected volatility		59.5	%		59.0	%		47.5	%
Expected dividend yield		—	%		—	%		—	%