The Company recognizes share-based compensation expense based on the fair value of the grants, awards or shares at the time of the grant, award or issuance. Share-based compensation includes stock option awards, restricted stock awards and stock appreciation rights issued under the Company’s incentive plans and stock issued through the Company’s employee stock purchase plan.

The table below identifies the shares that have been authorized for issuance and the shares available for future issuance under the Company plans, as of December 31, 2021 (in thousands):

The Company’s incentive plans provide for the granting of stock options for the purchase of common stock of the Company to certain key employees of the Company. Employee stock options are granted at an exercise price that is equal to the closing market price of the Company’s common stock on the date of the grant. Employee stock options granted under the plans expire after 10 years and typically vest 25% per year, over four years. The Company records compensation expense for the grant date fair value of the option awards evenly over the vesting period or minimum required service period.

The table below identifies the employee stock option activity under these plans during the year ended December 31, 2021:

The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes option pricing model. The Black-Scholes model requires the use of assumptions, including the risk free rate, expected life, expected volatility and expected dividend yield.

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Risk-free interest rate – The United States Treasury rates in effect at the time the options are granted for the options’ expected life.

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Expected life – Represents the period of time that options granted are expected to be outstanding. The Company uses historical experience to estimate the expected life of options granted.

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Expected volatility – Measure of the amount, by which the Company’s stock price is expected to fluctuate, based on a historical trend.

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Expected dividend yield – The Company has not paid, nor does it have plans in the foreseeable future to pay, any dividends.

The table below identifies the weighted-average assumptions used for stock options awarded by the Company during the years ended December 31, 2021, 2020 and 2019:


	December 31,
	2021		2020		2019
Risk free interest rate	0.82	%	0.86	%	2.26	%
Expected life	5.9	Years	5.9	Years	5.7	Years
Expected volatility	30.0	%	26.4	%	25.1	%
Expected dividend yield	—	%	—	%	—	%

The following table summarizes activity related to stock options awarded by the Company for the years ended December 31, 2021, 2020 and 2019:


	For the Year Ended
	December 31,
	2021		2020		2019
Compensation expense for stock options awarded (in thousands)	$	20,035	$	18,435	$	18,044
Income tax benefit from compensation expense related to stock options (in thousands)		4,989		4,620		4,436
Total intrinsic value of stock options exercised (in thousands)		163,722		79,451		117,489
Cash received from exercise of stock options (in thousands)		67,761		46,282		46,106
Weighted-average grant-date fair value of options awarded	$	146.57	$	106.76	$	105.37
Weighted-average remaining contractual life of exercisable options (in years)		4.7		4.5		4.6

At December 31, 2021, the remaining unrecognized compensation expense related to unvested stock option awards was $29.9 million, and the weighted-average period of time, over which this cost will be recognized, is 2.4 years.

Restricted stock:

The Company’s incentive plans provide for the awarding of shares of restricted stock to certain key employees that vest evenly over a three-year period and are held in escrow until such vesting has occurred. Generally, unvested shares are forfeited when an employee ceases employment. The fair value of shares awarded under these plans is based on the closing market price of the Company’s common stock on the date of award and compensation expense is recorded over the vesting period or minimum required service period.

The table below identifies employee restricted stock activity under these plans during the year ended December 31, 2021 (in thousands, except per share data):


		Weighted-Average Grant-Date
	Shares	Fair Value
Non-vested at December 31, 2020	4	$	358.58
Granted during the period	1		451.84
Vested during the period ⁽¹⁾	(2)		430.04
Forfeited during the period	—		—
Non-vested at December 31, 2021	3	$	419.47

(1)	Includes less than one thousand shares withheld to cover employees’ taxes upon vesting.

The Company’s incentive plans provide for the awarding of shares of restricted stock to the non-employee directors of the Company that vest over a one-year period, except for awards issued prior to May 2020, which vests evenly over a three-year period, and are held in escrow until such vesting has occurred. Unvested shares are forfeited when a director ceases their service on the Company’s Board of Directors for reasons other than death or retirement. The fair value of shares awarded under these plans is based on the closing market price of the Company’s common stock on the date of award, and compensation expense is recorded evenly over the minimum required service period.

The table below identifies non-employee director restricted stock activity under these plans during the year ended December 31, 2021 (in thousands, except per share data):


		Weighted-Average Grant-Date
	Shares	Fair Value
Non-vested at December 31, 2020	4	$	371.46
Granted during the period	1		559.53
Vested during the period	(3)		556.74
Forfeited during the period	—		—
Non-vested at December 31, 2021	2	$	508.45

The following table summarizes activity related to restricted stock awarded by the Company for the years ended December 31, 2021, 2020 and 2019 (in thousands, except per share data):


	For the Year Ended
	December 31,
	2021		2020		2019
Compensation expense for restricted shares awarded	$	1,602	$	1,488	$	1,387
Income tax benefit from compensation expense related to restricted shares	$	399	$	373	$	341
Total fair value of restricted shares at vest date	$	2,815	$	1,591	$	1,633
Shares awarded under the plans		3		4		4
Weighted-average grant-date fair value of shares awarded under the plans	$	509.24	$	412.67	$	355.91

At December 31, 2021, the remaining unrecognized compensation expense related to unvested restricted share awards was $0.4 million, and the weighted-average period of time, over which this cost will be recognized, is 0.3 years.

Employee stock purchase plan:

The Company’s employee stock purchase plan (the “ESPP”) permits eligible employees to purchase shares of the Company’s common stock at 85% of the fair market value. Employees may authorize the Company to withhold up to 5% of their annual salary to participate in the plan. The fair value of shares issued under the ESPP is based on the average of the high and low market prices of the Company’s common stock during the offering periods. Compensation expense is recognized based on the discount between the grant-date fair value and the employee purchase price for the shares sold to employees.

The table below summarizes activity related to the Company’s ESPP for the years ended December 31, 2021, 2020 and 2019 (in thousands, except per share data):


	For the Year Ended
	December 31,
	2021		2020		2019
Compensation expense for shares issued under the ESPP	$	3,019	$	2,824	$	2,490
Income tax benefit from compensation expense related to shares issued under the ESPP	$	752	$	708	$	612
Shares issued under the ESPP		36		45		43
Weighted-average price of shares issued under the ESPP	$	473.22	$	353.04	$	329.69

Profit sharing and savings plan:

The Company sponsors a contributory profit sharing and savings plan (the “401(k) Plan”) that covers substantially all employees who are at least 21 years of age and have completed one year of service. The Company makes matching contributions equal to 100% of the first 2% of each employee’s wages that are contributed and 25% of the next 4% of each employee’s wages that are contributed. An employee generally must be employed on December 31 to receive that year’s Company matching contribution, with the matching contribution funded annually at the beginning of the subsequent year following the year in which the matching contribution was earned. The Company may also make additional discretionary profit sharing contributions to the plan on an annual basis as determined by the Board of Directors. The Company did not make any discretionary contributions to the 401(k) Plan during the years ended December 31, 2021, 2020 or 2019. The Company expensed matching contributions under the 401(k) Plan in the amounts of $32.5 million, $31.0 million and $27.5 million for the years ended December 31, 2021, 2020 and 2019, respectively, which were primarily included in “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income.

Nonqualified deferred compensation plan:

The Company sponsors a nonqualified deferred compensation plan (the “Deferred Compensation Plan”) for highly compensated employees whose contributions to the 401(k) Plan are limited due to the application of the annual limitations under the Internal Revenue Code. The Deferred Compensation Plan provides these employees with the opportunity to defer the full 6% of matched compensation, including salary and incentive based compensation, that was precluded under the Company’s 401(k) Plan, which is then matched by the Company using the same formula as the 401(k) Plan. An employee generally must be employed on December 31 to receive that year’s Company matching contribution, with the matching contribution funded annually at the beginning of the subsequent year following the year in which the matching contribution was earned. In the event of bankruptcy, the assets of this plan are available to satisfy the claims of general creditors. The Company has an unsecured obligation to pay, in the future, the value of the deferred compensation and Company match, adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period. The timing related to the ultimate payment of these future share-based compensation related payments cannot be determined. The liability for compensation deferred under the Deferred Compensation Plan was $52.5 million and $40.4 million as of December 31, 2021 and 2020, respectively, which were included in “Other liabilities” on the Consolidated Balance Sheets. The Company expensed matching contributions under the Deferred Compensation Plan in the amount of $0.2 million for each of the years ended December 31, 2021, 2020 and 2019, respectively, which were primarily included in “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income.

Stock appreciation rights:

The Company’s incentive plans provide for the granting of stock appreciation rights, which expire after 10 years and vest 25% per year, over four years, and are settled in cash. There were 9,811 and 8,149 stock appreciation rights outstanding as of December 31, 2021 and 2020, respectively. During the year ended December 31, 2021, there were 1,662 stock appreciation rights granted. The liability for compensation to be paid for the future redemption of stock appreciation rights was $1.3 million and $0.3 million as of December 31, 2021 and 2020, respectively, which were included in “Other liabilities” on the Consolidated Balance Sheets. The Company expensed compensation expense for stock appreciation rights in the amounts of $1.0 million and $0.3 million and less than $0.1 million for the years ended December 31, 2021, 2020 and 2019, respectively, which were included in “Selling, general and administrative expenses” on the accompanying Consolidated Statements of Income.