Under the Company’s Amended and Restated Equity Compensation Plan (the “Plan”), stock options, stock units, stock awards, stock appreciation rights, dividend equivalents, and other stock-based awards may be granted to employees, non-employee directors, and consultants and advisors. At June 30, 2025, 694,331 shares were still available for issuance under the Plan.

Performance Share Units – A performance share unit (“PSU”) represents the right to receive a share of the Company’s common stock if specified performance goals are met over the three year performance period specified in the grant, subject to exceptions through the respective vesting period, which is generally three years. Each grantee is granted a target award of PSUs and may earn between 0% and 200% of the target amount depending on the Company’s performance against the performance goals.

The following were the assumptions used in the pricing model for the 2025 grants:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Stock-based compensation within operations and maintenance expenses	$	1,831	$	1,082	$	3,247	$	1,188
Income tax benefit	$	463	$	271	$	821	$	297

The following table summarizes the PSU transactions for the six months ended June 30, 2025:



	Number	Weighted
	of	Average
	Share Units	Fair Value
Nonvested share units at beginning of period	563,656	$	38.61
Granted	195,300	$	34.25
Performance criteria adjustment	(58,379)	$	36.22
Share units issued	(103,775)	$	42.77
Forfeited	(5,494)	$	38.00
Nonvested share units at end of period	591,308	$	36.68

The per unit weighted-average fair value at the date of grant for PSUs granted during the six months ended June 30, 2025 and 2024 was $34.25 and $38.10, respectively.

Restricted Stock Units – A restricted stock unit (“RSU”) represents the right to receive a share of the Company’s common stock. In prior years, RSUs were eligible to be earned at the end of a specified restricted period, which is generally three years, beginning on the date of grant. RSUs granted in 2025 vest 33% each year. The following table provides the compensation expense and income tax benefit for RSUs:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Stock-based compensation within operations and maintenance expenses	$	1,621	$	724	$	2,528	$	1,570
Income tax benefit	$	410	$	182	$	639	$	393

The following table summarizes the RSU transactions for the six months ended June 30, 2025:



	Number	Weighted
	of	Average
	Stock Units	Fair Value
Nonvested stock units at beginning of period	210,249	$	41.40
Granted	156,225	$	35.54
Stock units vested	(54,145)	$	44.84
Forfeited	(2,184)	$	38.27
Nonvested stock units at end of period	310,145	$	37.54

The per unit weighted-average fair value at the date of grant for RSUs granted during the six months ended June 30, 2025 and 2024 was $35.54 and $36.61, respectively.

Stock Options – A stock option represents the option to purchase a number of shares of common stock of the Company as specified in the stock option grant agreement at the exercise price per share as determined by the closing market price of our common stock on the grant date. Stock options are exercisable in installments of 33% annually, starting one year from the grant date and expire 10 years from the grant date, subject to satisfaction of designated performance goals. The following table provides the compensation cost and income tax benefit for stock-based compensation related to stock options:



	Three Months Ended				Six Months Ended
	June 30,					June 30,
	2025		2024		2025		2024
Stock-based compensation within operations and maintenance expenses	$	840	$	71	$	1,109	$	202
Income tax benefit	$	211	$	17	$	279	$	50

The fair value of options was estimated at the grant date using the Black-Scholes option-pricing model. The following assumptions were used in the application of this valuation model for the 2025 grant:


	2025
Expected term (years)		5.54
Risk-free interest rate		4.22%
Expected volatility		28.50%
Dividend yield		3.69%
Grant date fair value per option	$	7.95

The following table summarizes stock option transactions for the six months ended June 30, 2025:



		Weighted		Weighted
		Average		Average	Aggregate
		Exercise		Remaining	Intrinsic
	Shares	Price		Life (years)	Value
Outstanding at beginning of period	906,902	$	36.87
Granted	197,684	$	35.33
Exercised	(11,820)	$	35.31
Outstanding at end of period	1,092,766	$	36.61	5.5	$	1,682

Exercisable at end of period	800,993	$	36.76	4.1	$	1,226

Restricted Stock – Restricted stock awards provide the grantee with the rights of a shareholder, including the right to receive dividends and to vote such shares, but not the right to sell or otherwise transfer the shares during the restriction period. Nonvested shares of restricted stock were 1,268 as of June 30, 2025 and December 31, 2024. There were no restricted stock awards granted and vested during the first half of 2025. The following table provides the compensation cost and income tax benefit for stock-based compensation related to restricted stock:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Stock-based compensation within operations and maintenance expenses	$	12	$	12	$	24	$	24
Income tax benefit	$	3	$	3	$	6	$	6

Stock Awards – Stock awards represent the issuance of the Company’s common stock, without restriction. The issuance of stock awards results in compensation expense that is equal to the fair market value of the stock on the grant date and is expensed immediately upon grant. The following table provides the compensation cost and income tax benefit for stock-based compensation related to stock awards:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Stock-based compensation within operations and maintenance expenses	$	-	$	840	$	-	$	840
Income tax benefit	$	-	$	233	$	-	$	233