The 2006 Employee Plan authorizes the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 71,100,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or canceled. The Company issues new shares upon exercise of option rights (options) and vesting of restricted stock units (RSUs). The 2006 Employee Plan permits the granting of options, appreciation rights, restricted stock, RSUs, performance shares and performance units to eligible employees. At December 31, 2022, no appreciation rights, performance shares or performance units had been granted under the 2006 Employee Plan. Shares available for future grants under the 2006 Employee Plan were 8,612,672 at December 31, 2022.

The 2006 Stock Plan for Nonemployee Directors (Nonemployee Director Plan) authorizes the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 600,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or canceled. The Nonemployee Director Plan permits the granting of options, appreciation rights, restricted stock and RSUs to members of the Board of Directors who are not employees of the Company. At December 31, 2022, no options or appreciation rights had been granted under the Nonemployee Director Plan. Shares available for future grants under the Nonemployee Director Plan were 223,833 at December 31, 2022.

At December 31, 2022, the Company had total unrecognized stock-based compensation expense of $125.2 million that is expected to be recognized over a weighted-average period of 1.05 years.

Excess tax benefits from share-based payments are recognized as an income tax benefit in the Statements of Consolidated Income when options are exercised and RSUs vest. For the years ended December 31, 2022, 2021 and 2020, the Company’s excess tax benefit from options exercised and RSUs vested reduced the income tax provision by $35.4 million, $108.7 million and $94.7 million respectively.

The fair value of the Company’s options was estimated at the date of grant using a Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for all options granted:


	2022		2021		2020
Risk-free interest rate	4.00	%	1.11	%	.39	%
Expected life of options	5.05 years		5.05 years		5.05 years
Expected dividend yield of stock	.92	%	.75	%	.88	%
Expected volatility of stock	31.6	%	26.8	%	26.7	%

The risk-free interest rate is based upon the U.S. Treasury yield curve at the time of grant. The expected life of options was calculated using a scenario analysis model. Historical data was used to aggregate the holding period from actual exercises, post-vesting cancellations and hypothetical assumed exercises on all outstanding options. The expected dividend yield of stock is the Company’s best estimate of the expected future dividend yield. Expected volatility of stock was calculated using historical and implied volatilities.

Grants of non-qualified and incentive stock options have been awarded to certain officers and key employees under the 2006 Employee Plan. The options generally become exercisable to the extent of one-third of the optioned shares for each full year following the date of grant and generally expire ten years after the date of grant. Unrecognized compensation expense with respect to options granted to eligible employees amounted to $84.4 million at December 31, 2022. The unrecognized compensation expense is being amortized on a straight-line basis over the three-year vesting period, net of estimated forfeitures based on historical activity, and is expected to be recognized over a weighted-average period of 1.09 years.


	Optioned Shares	Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Term (in Years)
Outstanding at January 1, 2022	8,982,935	$	147.83	$	1,835.5	6.09
Granted	1,000,863	220.57
Exercised	(780,677)	86.91
Forfeited	(81,902)	247.92
Expired	(18,581)	182.48
Outstanding at December 31, 2022	9,102,638	$	160.09	$	756.6	5.82

Exercisable at December 31, 2022	7,088,732	$	137.09	$	727.7	4.91


	2022		2021		2020
Weighted average grant date fair value per share	$	69.82	$	68.63	$	46.56
Total fair value of options vested	57.9		53.2		51.0
Total intrinsic value of options exercised	125.4		485.8		407.9

The fair value of each RSU is equal to the market value of a share of the Company’s stock on the grant date. Grants of time-based RSUs, which generally require three years of continuous employment from the date of grant before vesting and receiving the stock without restriction, have been awarded to certain officers and key employees under the 2006 Employee Plan. The February 2022, 2021 and 2020 grants of performance-based RSUs vest at the end of a three-year period based on the Company’s achievement of specified financial and operating performance goals relating to earnings per share and return on net assets employed.

Unrecognized compensation expense with respect to grants of RSUs to eligible employees amounted to $39.1 million at December 31, 2022. The unrecognized compensation expense is being amortized on a straight-line basis over the vesting period and is expected to be recognized over a weighted-average period of 0.85 years.

Grants of RSUs have been awarded to nonemployee directors under the Nonemployee Director Plan. These grants generally vest and stock is received without restriction to the extent of one-third of the RSUs for each year following the date of grant. Unrecognized compensation expense with respect to grants of RSUs to nonemployee directors amounted to $1.7 million at December 31, 2022. The unrecognized compensation expense is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted-average period of 0.89 years.


	Number of RSUs	Weighted Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Term (in Years)
Outstanding at January 1, 2022	510,680	$	185.38	$	179.8	0.96
Granted	254,935	271.75
Vested	(357,832)	145.47
Forfeited	(5,859)	225.42
Outstanding at December 31, 2022	401,924	231.09		$	95.4	1.02