|12 Months Ended|
Dec. 31, 2022
|Share-based Payment Arrangement [Abstract]|
STOCK-BASED COMPENSATION EXPENSE
Stock-based compensation expense consisted of the following:The Company realized a tax benefit for the deduction from stock-based award transactions of $3.6 million, $8.3 million and $4.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.STOCK OPTIONS
Options to purchase the Company's common stock are granted at exercise prices equal to or greater than the fair market value of the Company's common stock on the date of grant. Options generally vest and become exercisable ratably on an annual basis over a period of four years and expire ten years from the date of the grant.
The fair value of stock options is determined using the Black-Scholes model. Key inputs and assumptions used in the model include the exercise price of the award, the expected option term, the expected stock price volatility of the Company's stock over the option's expected term, the risk-free interest rate over the option's expected term, and the Company's expected annual dividend yield. The option's expected term is derived from historical option exercise behavior and the option's terms and conditions, which the Company believes provide a reasonable basis for estimating an expected term. The expected volatility is estimated based on observations of the Company's historical volatility over the most recent term commensurate with the expected term. The risk-free interest rate is based on the United States Treasury yield approximating the expected term. The dividend yield is based on the expected cash dividend payouts.
The weighted average assumptions for stock options granted and resulting fair value is as follows:
The following table summarizes stock option activity under the Plan:
(1) The aggregate intrinsic value above represents pre-tax intrinsic value that would have been realized if all options had been exercised on the last business day of the period indicated, based on the Company's closing stock price on that day.
Stock option compensation expense was $7.8 million, $6.9 million and $7.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, unrecognized costs related to outstanding stock options totaled $12.9 million, before any related tax benefit. The unrecognized costs related to stock options are being amortized over the related vesting period using the straight-line attribution method. These unrecognized costs related to stock options are being amortized over a weighted average period of 2.18 years. The aggregate intrinsic value of stock options exercised was $3.4 million, $19.2 million and $4.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. The total cash received as a result of stock option exercises was $6.6 million, $28.8 million and $6.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.RESTRICTED STOCK UNITS
Service-based restricted stock units are granted at no cost to key employees and generally vest over a period of four years. Performance-based restricted stock units are granted at no cost to certain members of the Company's senior executive team, excluding the Chief Executive Officer. Performance-based restricted stock units granted after 2009 generally vest over a performance period of between two and three years. Restricted stock units vest in accordance with the terms and conditions established by the Compensation Committee of the Board of Directors, and are based on continued service and, in some instances, on individual performance or Company performance or both.
The fair value of service-based and performance-based restricted stock units that are not eligible for dividends are valued at the closing price of the Company’s common stock on the date of grant, reduced by the present value of dividends not received during the vesting period. Other assumptions incorporated into the grant date fair value include the vesting period and the Company's expected annual dividend yield.
The weighted average assumptions for restricted stock units granted and resulting fair value are as follows:
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef