Equity Awards (Notes)

The Company granted 900,000 stock option awards during the six months ended June 30, 2025. The Company estimated the grant-date fair value of the awards using the Black-Scholes option pricing model using the following weighted-average assumptions: risk-free interest rate of 4.1%, expected volatility of 33.0%, annual dividend payment of $0.16, and an expected term of 6.5 years. Information related to stock options at June 30, 2025 is as follows:


	Number of Stock Options	Weighted Average Option Price		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2025	—	$	—
Granted	900,000	41.11



Outstanding at June 30, 2025	900,000	$	41.11	10.0	$	—

As of June 30, 2025, there was $6.7 million of unrecognized compensation cost related to stock options that is expected to be recorded over a weighted average period of 1.6 years.

The Company recognized approximately $0.1 million of stock-based compensation expense related to stock options during the three and six months ended June 30, 2025 and no stock-based compensation expense related to stock options during the three and six months ended June 30, 2024. The stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statement of income.

Restricted Stock Units

The Company awarded the following restricted stock units ("RSUs") during the six months ended June 30, 2025:

•Granted 457,504 RSUs to certain employees, which are subject only to a service condition and vest ratably over one, two, or three years so long as the employee remains with the Company;

•Granted 36,396 RSUs to its non-employee independent directors, which fully vest one year from date of grant so long as the director and/or Company does not terminate the director's service prior to the vesting date;

•Issued 81 RSUs to certain employees related to dividend equivalent rights on existing equity awards; and

•Issued 1,242 RSUs related to director fee deferrals as certain of the Company's directors elected to defer all or a portion of their director fees and to receive the amount in Company common stock at a future date.

During 2025, the Company also awarded 95,023 performance-based RSUs to certain Company key employees which vest three years from the grant date as long as the employee remains with the Company. These awards are initially earned 50% based upon the Company's achievement of an earnings per share compound annual growth rate ("EPS CAGR") metric and 50% based upon the Company's cash return on net assets ("Cash RONA") metric over a period beginning January 1, 2025 and ending December 31, 2027. The total EPS CAGR and Cash RONA performance-based RSUs initially earned shall be subject to modification based on the Company's total shareholder return ("TSR") relative to the TSR of the common stock of a pre-defined industry peer-group, measured over the performance period. TSR is calculated as the Company's average closing stock price for the 20 trading days at the end of the performance period plus Company dividends, divided by the Company's average closing stock price for the 20 trading days prior to the start of the performance period. The Company estimates the grant-date fair value subject to a market condition using a Monte Carlo simulation model, using the following weighted average assumptions: risk-free rate of 4.00% and annualized volatility of 30.8%. Depending on the performance achieved for these two metrics, the amount of shares earned, if any, can vary for each metric from 0% of the target award to a maximum of 250% of the target.

Information related to RSUs at June 30, 2025 is as follows:


	Number of Unvested RSUs	Weighted Average Grant Date Fair Value		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2025	823,943	$	27.63
Granted	590,246	25.49
Vested	(245,543)	27.35
Cancelled	(138,765)	31.20
Outstanding at June 30, 2025	1,029,881	$	25.99	1.5	$	29,460,000

As of June 30, 2025, there was $13.1 million of unrecognized compensation cost related to unvested RSUs that is expected to be recorded over a weighted average period of 2.4 years.