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Stock Plans | 6 Months Ended
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Jun. 30, 2021
Share-based Payment Arrangement [Abstract] |
Stock Plans | Stock Plans The 2016 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible key employees through May 2026. Management stock-based compensation includes stock options, restricted stock awards, restricted stock units and performance stock units. The 2017 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2027. We issue treasury shares for stock option exercises and grants of restricted stock and performance stock. Please refer to Note 6—Capital Stock for further information regarding stock compensation share issuance. Stock compensation expense is as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Stock compensation expense |  | $ | 7,403 |  |  | $ | 830 |  |  | $ | 10,695 |  |  | $ | 4,352 |
Income tax expense |  | 1,784 |  |  | 202 |  |  | 2,577 |  |  | 1,062 |
Stock compensation expense, net of tax |  | $ | 5,619 |  |  | $ | 628 |  |  | $ | 8,118 |  |  | $ | 3,290 |
A summary of stock option activity for the six months ended June 30, 2021, follows:
|  | Shares |  | Weighted Average Exercise Price
Outstanding at January 1, 2021 |  | 283,998 |  |  | $ | 46.23 |
Exercised |  | (47,538) |  |  | 45.42 |
Forfeited |  | (81) |  |  | 49.66 |
Outstanding at June 30, 2021 |  | 236,379 |  |  | 46.40 |
Exercisable at June 30, 2021 |  | 235,399 |  |  | $ | 46.39 |
Restricted stock awards and restricted stock units are valued at the market value of the stock on the grant date. A summary of restricted stock activity for the six months ended June 30, 2021, follows:
|  | Shares |  | Weighted Average Grant Date Fair Value
Unvested at January 1, 2021 |  | 146,191 |  |  | $ | 105.83 |
Granted |  | 35,686 |  |  | 169.54 |
Vested |  | (51,753) |  |  | 92.84 |
Forfeited |  | (1,035) |  |  | 139.08 |
Unvested at June 30, 2021 |  | 129,089 |  |  | $ | 128.39 |
Performance stock units that have a market condition modifier and are valued at an estimated fair value using a Monte Carlo model. The final number of shares to be issued for performance stock units granted in the first quarter of 2021 may range from 0% to 200% of the target award based on achieving the specified performance targets over the performance period plus an additional modifier based on total shareholder return (TSR) over the performance period. The following weighted average assumptions were used in estimating the fair value of the performance stock units granted in the first quarter of 2021.
Fair value per unit | $177.50 |  |  |
Risk-free interest rate | 0.2% |  |  |
Expected dividend yield | 1.33% |  |  |
Expected volatility | 35.6% |  |  |
MSA stock beta | 0.932 |  |  |
The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the ten year historical volatility using daily stock prices. Expected life is based on historical stock option exercise data. A summary of performance stock unit activity for the six months ended June 30, 2021, follows:
|  | Shares |  | Weighted Average Grant Date Fair Value
Unvested at January 1, 2021 |  | 200,212 |  |  | $ | 104.69 |
Granted |  | 46,070 |  |  | 177.32 |
Performance adjustments |  | 4,941 |  |  | 88.86 |
Vested |  | (63,286) |  |  | 84.97 |
Unvested at June 30, 2021 |  | 187,937 |  |  | $ | 128.72 |
The performance adjustments above relate primarily to the final number of shares issued for the 2018 performance unit awards which vested in the first quarter of 2021 at 105.4% of the target award based on both cumulative performance against the operating margin and revenue growth targets and MSA's TSR during the three-year performance period.

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