Stock-based compensation expense consists of stock-based payment awards made to employees and directors, including employee stock options, restricted stock awards and performance stock units (PSUs) 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, 2026 and 2025 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 grants equity awards under the Amended and Restated 2022 Omnibus Incentive Plan (the Amended and Restated Plan), the amendment and restatement of which was approved by the Company’s stockholders during the second quarter of 2025. There are 4,231 shares of common stock available for issuance under the Amended and Restated Plan, and the number of shares available for issuance is reduced by one share for each share subject to an option or stock appreciation right award and by two shares for each share subject to an award other than an option or stock appreciation right. At June 30, 2026, 2,425 shares remained available for future issuance under the Amended and Restated Plan.

Non-employee director stock options, to the extent granted, vest and become exercisable in three equal annual installments, or over the term of the award if less than three years, subject to continued service from the grant date through the date of vesting. All other stock options generally vest over five years at a rate of 20% per year on each anniversary of the grant date. Stock options expire ten years from the grant date.

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.



Grant Year	Options Granted	Weighted Average Risk-Free Rate	Expected Life	Weighted Average Volatility	Weighted Average Dividend Yield
2026	197	4.2%	6.2 years	37.9%	0.1%
2025	175	4.2%	6.2 years	39.1%	0.2%



Grant Year	Options Granted	Weighted Average Risk-Free Rate	Expected Life	Weighted Average Volatility	Weighted Average Dividend Yield
2026	509	3.9%	6.2 years	38.2%	0.1%
2025	327	4.2%	6.2 years	39.4%	0.2%

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, 2026 and 2025 and therefore, the intrinsic value was $0 at the date of grant.


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












January 1, 2026	4,071	$	96.87	1,991	$	67.10
Granted	509	199.28
Forfeited	(43)	127.12
Exercised	(254)	62.45
June 30, 2026	4,283	$	110.77	2,042	$	73.22

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, 2026 and 2025 was $17,267 and $22,121, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2026 and 2025 was $33,869 and $24,957, respectively.

The Company granted 50 and 205 restricted stock awards during the three and six months ended June 30, 2026, respectively. The Company granted 42 and 134 restricted stock awards during the three and six months ended June 30, 2025, 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, 2026 and 2025 ranged from $178.00 to $212.65 and $126.34 to $147.04, respectively. The fair value per share includes quarterly stock awards to non-employee directors. Included in the restricted stock award grants are $13,555 and $8,003 of annual bonuses that were settled in vested restricted stock awards during the six months ended June 30, 2026 and 2025, respectively.

A summary of the status of the Company's non-vested restricted stock awards as of June 30, 2026 and changes during the six months ended June 30, 2026 is presented below:


	Non-Vested Restricted Awards	Weighted Average Grant Date Fair Value








Nonvested at January 1, 2026	436	$	129.54
Granted	205	203.09
Vested	(142)	156.12
Forfeited	(9)	123.94
Nonvested at June 30, 2026	490	$	152.85

During the three and six months ended June 30, 2026, the Company granted four and seven automatic quarterly stock awards 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 $183.54 to $197.92 based on the market price on the grant date.

PSU awards are granted to certain employees and vest based on the achievement of specified Company performance objectives over a designated performance period. During the three months ended June 30, 2026, the Company granted 54 PSU awards with a grant date fair values ranging from $169.70 to $257.70 per share. PSU awards are subject to a three-year cliff vesting schedule and the ultimate number of shares granted may range from 0 to 2.5 times the target number of awards based on the Company's achievement of earnings and shareholder returns. Compensation expense is recognized over the requisite service period based on the estimated number of awards expected to vest.

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, 2026 and 2025 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Stock-based compensation expense related to stock options	$	9,456	$	7,402	$	18,108	$	14,207
Stock-based compensation expense related to restricted stock awards	4,727		3,761		9,107		7,163
Stock-based compensation expense related to restricted stock awards to non-employee directors	713		465		1,374		949
Stock-based compensation expense related to performance stock units	1,066		—		1,066		—
TOTAL	$	15,962	$	11,628	$	29,655	$	22,319

In future periods, the Company expects to recognize approximately $126,656, $65,928 and $10,450 in stock-based compensation expense for unvested options, restricted stock awards and performance stock units, respectively, that were outstanding as of June 30, 2026. Future stock-based compensation expense will be recognized over 3.8, 3.9 and 2.1 weighted average years for unvested options, restricted stock awards and performance stock units, respectively. There were 2,241 unvested and outstanding options as of June 30, 2026, of which 2,068 options are expected to vest. The weighted average contractual life for options outstanding, vested and expected to vest as of June 30, 2026 was 6.7 years.