The Company's share-based compensation plans are described in Note 11, Share-Based Compensation, to the consolidated financial statements in Part II, Item 8, filed on the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands)
Stock option expense	$	3,417	$	3,560	$	10,443	$	10,740
Restricted stock expense	5,106		5,578		15,232		15,875
Performance restricted stock unit expense	4,220		3,775		9,232		9,158
Total pre-tax expense	$	12,743	$	12,913	$	34,907	$	35,773

Pre-tax share-based compensation expense is included in the consolidated statement of income in either Cost of sales or Selling, general and administrative expenses, depending on where the recipient’s cash compensation is reported.

The fair value of each stock option grant is estimated on the grant date using a Black-Scholes-Merton option pricing model. The following weighted average assumptions were used in the Black-Scholes-Merton model to estimate the fair values of stock options granted during the periods indicated:


	Nine Months Ended September 30, 2024			Year Ended December 31, 2023
Expected volatility	28.2		%	26.0		%
Expected term (years)	5.0			5.0
Risk-free interest rate	4.31		%	3.54		%
Expected dividend yield	0.62		%	0.72		%
Black-Scholes-Merton fair value per stock option granted	$	56.42		$	38.11


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(In thousands)			(Years)	(In millions)
Outstanding at December 31, 2023	2,741	$	101.20
Granted	231	181.93
Exercised	(482)	83.93
Forfeited	(44)	149.47
Outstanding at September 30, 2024	2,446	$	111.35	6.4	$	149.8
Exercisable at September 30, 2024	1,809	$	96.89	5.7	$	135.4

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2024 was $43.1 million. The total fair value of stock options vested during the nine months ended September 30, 2024 was $14.8 million. As of September 30, 2024, there was approximately $19.3 million of expected future pre-tax compensation expense related to the 0.6 million non-vested stock options outstanding, which is expected to be recognized over a weighted average period of approximately two years.


	Shares	Weighted Average Grant Date Fair Value
	(In thousands)
Non-vested restricted stock outstanding at December 31, 2023	296	$	135.39
Granted	148	181.60
Vested	(141)	132.77
Forfeited	(22)	153.79
Non-vested restricted stock outstanding at September 30, 2024	281	$	159.52

The total fair value of restricted stock vested during the nine months ended September 30, 2024 was $18.7 million. As of September 30, 2024, there was approximately $32.3 million of expected future pre-tax compensation expense related to the 0.3 million non-vested restricted shares outstanding, which is expected to be recognized over a weighted average period of approximately two years.

In March 2024, the Company granted performance restricted stock units ("PRSU") to officers and certain key management-level employees. The PRSUs vest over a period up to three years from the grant date based on continuous service, with the number of shares earned (0% to 200% of the target award) depending upon the extent to which the Company achieves certain financial and market performance targets measured over the period from January 1 of the year of grant to December 31 of the third year. Half of the PRSUs were valued in a manner similar to restricted stock as the financial targets are based on the Company’s operating results, which represents a performance condition. The grant date fair value of these PRSUs are recognized as compensation expense over the vesting period based on the probable number of awards to vest at each reporting date.

The other half of the PRSUs were valued using a Monte Carlo model as the performance target is related to the Company’s total shareholder return compared to a group of peer companies, which represents a market condition. The Company recognizes the grant date fair value of these awards as compensation expense ratably over the vesting period.


	Shares	Weighted Average Grant Date Fair Value
	(In thousands)
Non-vested performance restricted stock outstanding at December 31, 2023	239	$	131.90
Granted	77	181.93
Performance assumption change 1	24	121.91
Vested	(99)	121.91
Forfeited	(6)	155.48
Non-vested performance restricted stock outstanding at September 30, 2024	235	$	150.93

As of September 30, 2024, there was approximately $8.9 million of expected future pre-tax compensation expense related to the 0.2 million non-vested restricted shares outstanding, which is expected to be recognized over a weighted average period of less than one year.