OPTIONS AND AWARDS

6 Months Ended

Jun. 30, 2025

Share-Based Payment Arrangement [Abstract]

Stock-based compensation expense consists of stock-based payment awards made to employees and directors, including employee stock options and restricted stock awards, based on estimated fair values. As stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the three and six months ended June 30, 2025 and 2024 was based on awards expected to vest, it has been reduced for estimated forfeitures. The Company estimates forfeitures at the time of grant and, if necessary, revises the estimate in subsequent periods if actual forfeitures differ.

The Company has one stock incentive plan, the Amended and Restated 2022 Omnibus Incentive Plan (the Amended and Restated Plan), pursuant to which grants of the Company's securities may currently be made. During the second quarter of 2025, the Company’s stockholders approved the Amended and Restated Plan, which increased the total number of shares authorized for issuance under the 2022 Omnibus Incentive Plan (the Predecessor Plan). Including the shares rolled over from the Predecessor Plan, the Amended and Restated Plan provides for the issuance of 4,231 shares of common stock. The number of shares available to be issued under the Amended and Restated Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) two shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award). Non-employee director options, to the extent granted, will vest and become exercisable in three equal annual installments, or the length of the term if less than three years, on the completion of each year of service measured from the grant date. All other options generally vest over five years at 20% per year on the anniversary of the grant date. Options expire ten years from the date of grant. At June 30, 2025, the total number of shares available for issuance under the Amended and Restated Plan was 3,982.

The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for stock option awards. Determining the appropriate fair-value model and calculating the fair value of stock option awards at the grant date requires judgment, including estimating stock price volatility, expected option life, and forfeiture rates. The fair-value of the restricted stock awards at the grant date is based on the market price on the grant date, adjusted for forfeiture rates. The Company develops estimates based on historical data and market information, which can change significantly over time.

Stock Options

The Company used the following assumptions for stock options granted during the three months ended June 30, 2025 and 2024:



Grant Year	Options Granted	Weighted Average Risk-Free Rate	Expected Life	Weighted Average Volatility	Weighted Average Dividend Yield
2025	175	4.2%	6.2 years	39.1%	0.2%
2024	173	4.4%	6.1 years	40.6%	0.2%

The Company used the following assumptions for stock options granted during the six months ended June 30, 2025 and 2024:



Grant Year	Options Granted	Weighted Average Risk-Free Rate	Expected Life	Weighted Average Volatility	Weighted Average Dividend Yield
2025	327	4.2%	6.2 years	39.4%	0.2%
2024	354	4.4%	6.1 years	40.8%	0.2%

For the six months ended June 30, 2025 and 2024, the following represents the exercise price and fair value displayed at grant date for stock option grants:


Grant Year	Granted	Weighted Average Exercise Price		Weighted Average Fair Value of Options
2025	327	$	137.42	$	61.71
2024	354	$	120.98	$	55.39

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the six months ended June 30, 2025 and 2024 and therefore, the intrinsic value was $0 at the date of grant.

The following table represents the employee stock option activity during the six months ended June 30, 2025:


	Number of Options Outstanding	Weighted Average Exercise Price		Number of Options Vested	Weighted Average Exercise Price of Options Vested












January 1, 2025	3,987	$	78.84	1,895	$	52.64
Granted	327	137.42
Forfeited	(31)	104.56
Exercised	(274)	49.89
June 30, 2025	4,009	$	85.40	1,943	$	58.64

The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of June 30, 2025 and December 31, 2024 is as follows:



Options	June 30, 2025		December 31, 2024


Outstanding	$	276,046	$	219,309
Vested	185,823		152,011
Expected to vest	84,487		63,243

The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options. The aggregate intrinsic value of options that vested during the six months ended June 30, 2025 and 2024 was $22,121 and $18,073, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2025 and 2024 was $24,957 and $29,894, respectively.

Restricted Stock Awards

The Company granted 42 and 134 restricted stock awards during the three and six months ended June 30, 2025, respectively. The Company granted 42 and 137 restricted stock awards during the three and six months ended June 30, 2024, respectively. All awards were granted at an issue price of $0 and generally vest over five years. The fair value per share of restricted awards granted during the six months ended June 30, 2025 and 2024 ranged from $126.34 to $147.04 and $116.65 to $122.69, respectively. The fair value per share includes quarterly stock awards to non-employee directors. Included in the restricted stock award grants are $8,003 and $6,165 of annual bonuses that were settled in vested restricted stock awards in the first quarter of 2025 and 2024, respectively.

A summary of the status of the Company's non-vested restricted stock awards as of June 30, 2025 and changes during the six months ended June 30, 2025 is presented below:


	Non-Vested Restricted Awards	Weighted Average Grant Date Fair Value








Nonvested at January 1, 2025	435	$	102.71
Granted	134	134.11
Vested	(152)	105.12
Forfeited	(6)	109.88
Nonvested at June 30, 2025	411	$	112.17

During the three and six months ended June 30, 2025, the Company granted 3 and 7 automatic quarterly stock awards, respectively, to non-employee directors for their service on the Company's board of directors. The fair value per share of these stock awards ranged from $129.09 to $134.58 based on the market price on the grant date.

Stock-based compensation expense

Stock-based compensation expense recognized for the Company's equity incentive plans and long-term incentive plan for the three and six months ended June 30, 2025 and 2024 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Stock-based compensation expense related to stock options	$	7,402	$	5,518	$	14,207	$	10,506
Stock-based compensation expense related to restricted stock awards	3,761		2,936		7,163		5,663
Stock-based compensation expense related to restricted stock awards to non-employee directors	465		524		949		1,040
TOTAL	$	11,628	$	8,978	$	22,319	$	17,209

In future periods, the Company expects to recognize approximately $89,480 and $39,906 in stock-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of June 30, 2025. Future stock-based compensation expense will be recognized over 3.7 weighted average years for both unvested options and restricted stock awards. There were 2,066 unvested and outstanding options as of June 30, 2025, of which 1,900 options are expected to vest. The weighted average contractual life for options outstanding, vested and expected to vest as of June 30, 2025 was 6.7 years.