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Stock Plans
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock Plans Stock PlansThe 2016 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible key employees through May 2026. Management stock-based compensation includes stock options, restricted stock, restricted stock units and performance stock units. Additionally, 2019 amounts granted include outstanding Sierra Monitor Corporation awards converted into MSA awards after the acquisition. See Note 14—Acquisitions for more information. The 2017 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2027. Stock options are granted at market prices and expire after ten years. Stock options are exercisable beginning three years after the grant date. Restricted stock and restricted stock units are granted without payment to the Company and generally vest three years after the grant date. Restricted stock and restricted stock units are valued at the market value of the stock on the grant date. Performance stock units with a market condition are valued at an estimated fair value using a Monte Carlo simulation model. The final number of shares to be issued for performance stock units may range from zero to 200% of the target award based on achieving the specified performance targets over the performance period and further range based upon the achieved market metric over the performance period. In general, unvested stock options, restricted stock and performance stock units are forfeited if the participant’s employment with the Company terminates for any reason other than retirement, death or disability. We issue Treasury shares for stock option exercises and grants of restricted stock and performance stock. Please refer to Note 7—Capital Stock for further information regarding stock compensation share issuance. As of December 31, 2021, there were 714,999 and 87,051 shares, respectively, reserved for future grants under the management and non-employee directors’ equity incentive plans.
Stock-based compensation expense was as follows:
(In thousands)202120202019
Restricted stock units$5,797 $6,258 $6,914 
Stock options81 113 487 
Performance stock units13,030 549 6,359 
Total stock-compensation expense before income taxes18,908 6,920 13,760 
Income tax benefit4,633 1,668 3,357 
Total stock-compensation expense, net of income tax benefit$14,275 $5,252 $10,403 
We did not capitalize any stock-based compensation expense, and all expense is recorded in selling, general and administrative expense in 2021, 2020, and 2019.
The Company utilized the Black-Scholes valuation model for estimating the fair value of stock option expense with the following weighted average assumptions. There were no stock options granted in 2021 or 2020.
2019
Fair value per option$59.07 
Risk-free interest rate2.3 %
Expected dividend yield1.7 %
Expected volatility31 %
Expected life (years)6.4
The risk-free interest rate is based on the U.S. Treasury yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the historical volatility using daily stock prices. Expected life is based on historical stock option exercise data.
A summary of option activity follows:
SharesWeighted
Average
Exercise Price		Exercisable at
Year-end
Outstanding January 1, 2019735,001 $43.79 
Granted23,285 43.54 
Exercised(198,535)38.16 
Forfeited(95)49.19 
Outstanding December 31, 2019559,656 45.78 552,682 
Exercised(274,704)45.31 
Forfeited(954)42.00 
Outstanding December 31, 2020283,998 46.23 281,593 
Exercised(122,087)47.25 
Forfeited(210)43.75 
Outstanding December 31, 2021161,701 $45.47 161,347 
For various exercise price ranges, characteristics of outstanding and exercisable stock options at December 31, 2021 were as follows:
Stock Options Outstanding
Range of Exercise PricesSharesWeighted-Average
Exercise PriceRemaining Life
$33.01 – $45.00
126,985 $44.46 2.04
$45.01 – $57.93
34,716 49.18 2.79
$33.01 – $57.93
161,701 $45.47 2.20
 Stock Options Exercisable
Range of Exercise PricesSharesWeighted-Average
Exercise PriceRemaining Life
$33.01 – $45.00
126,985 $44.46 2.04
$45.01 – $57.93
34,362 49.17 2.75
$33.01 – $57.93
161,347 $45.46 2.19
Cash received from the exercise of stock options was $5.8 million, $12.4 million and $7.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. The tax benefit we realized from these exercises was $4.3 million, $6.4 million and $4.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Stock options become exercisable when they are vested. The aggregate intrinsic value of stock options exercisable at December 31, 2021 was $17.0 million. The aggregate intrinsic value of all stock options outstanding at December 31, 2021 was $17.1 million.
A summary of restricted stock unit activity follows:
SharesWeighted Average
Grant Date
Fair Value
Unvested January 1, 2019205,449 $68.97 
Granted70,160 104.53 
Vested(97,253)56.47 
Forfeited(5,655)85.48 
Unvested at December 31, 2019172,701 90.38 
Granted51,468 124.61 
Vested(70,399)81.58 
Forfeited(7,579)106.54 
Unvested at December 31, 2020146,191 105.83 
Granted43,146 167.13 
Vested(65,225)95.43 
Forfeited(5,769)132.54 
Unvested at December 31, 2021118,343 $132.62 
A summary of performance stock unit activity follows:
SharesWeighted Average
Grant Date
Fair Value
Unvested at January 1, 2019218,886 $68.43 
Granted83,819 101.03 
Vested(139,478)44.75 
Performance adjustments76,960 44.24 
Forfeited(2,152)99.82 
Unvested at December 31, 2019238,035 85.39 
Granted67,479 127.48 
Vested(132,036)73.00 
Performance adjustments33,499 72.36 
Forfeited(6,765)111.60 
Unvested at December 31, 2020200,212 104.69 
Granted52,309 175.59 
Vested(64,543)85.41 
Performance adjustments5,357 88.45 
Unvested at December 31, 2021193,335 $129.86 
The 2021 performance adjustments above relate primarily to 2018 performance unit awards that exceeded the performance targets when vested during 2021, including the final number of shares issued, which were 105.4% of the target award based on actual results during the three year performance period.
During the years ended December 31, 2021, 2020 and 2019, the total intrinsic value of stock options exercised (the difference between the market price on the date of exercise and the option price paid to exercise the option) was $13.0 million, $24.6 million and $14.6 million, respectively. The fair values of restricted stock vested during the years ended December 31, 2021, 2020 and 2019 were $6.2 million, $5.7 million and $5.5 million, respectively. The fair value of performance stock units vested during the years ended December 31, 2021, 2020 and 2019 was $5.5 million, $9.6 million and $6.2 million, respectively.
On December 31, 2021, there was $12.6 million of unrecognized stock-based compensation expense. The weighted average period over which this expense is expected to be recognized was approximately 1.6 years.