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Stock Plans

12 Months Ended

Dec. 31, 2021

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The Company has share-based compensation plans ("SCP") that allow it to grant restricted shares, or options to purchase shares, of common stock to certain current and prospective key employees, directors and consultants of the Company. These awards generally vest over periods ranging from three to five years from the date of grant. Stock options are generally exercisable during the shorter of a ten-year term or the term of employment with the Company. With the exception of certain awards made to the Company's employees in Germany, Singapore and Malaysia, awards under the SCP are settled through the issuance of new shares under the provisions of the SCP. For Company employees in Germany, Singapore and Malaysia, certain awards are settled through the issuance of treasury shares, which also reduces the number of shares available for future issuance under the SCP. As of December 31, 2021, the Company has approximately 5.6 million in total shares remaining available for issuance under the SCP.

Share-based compensation expense was $36.5 million, $22.0 million and $21.4 million for the years ended December 31, 2021, 2020 and 2019, respectively, and was recorded in salaries and benefits expense in the accompanying Consolidated Statements of Operations. The Company recorded a tax benefit of $4.1 million, $2.1 million and $4.9 million during the years ended December 31, 2021, 2020 and 2019, respectively, for the portion of this expense that relates to foreign tax jurisdictions in which an income tax benefit is expected to be derived.

Stock options

Summary stock options activity is presented in the table below:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (thousands)
Balance at December 31, 2020 (1,497,567 shares exercisable)	4,091,293		$	94.88
Granted	532,979		$	116.55
Exercised	(296,363	)	$	26.41
Forfeited/Canceled	(17,831	)	$	119.80
Expired	(877	)	$	16.39
Balance at December 31, 2021	4,309,201		$	102.19	7.2	$	97,425
Exercisable at December 31, 2021	1,466,983		$	78.19	4.5	$	65,770
Vested and expected to vest at December 31, 2021	1,963,940		$	90.29	5.5	$	68,162

Options outstanding that are expected to vest are net of estimated future forfeitures. The Company received cash of $7.8 million, $15.8 million and $13.1 million in connection with stock options exercised in the years ended December 31, 2021, 2020 and 2019, respectively. The intrinsic value of these options exercised was $27.7 million, $41.1 million and $30.6 million in the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, unrecognized compensation expense related to nonvested stock options that are expected to vest totaled $58.5 million and will be recognized over the next 4 years, with an overall weighted-average period of 2.6 years. The following table provides the fair value of options granted under the SCP during 2021, 2020 and 2019, together with a description of the assumptions used to calculate the fair value using the Black-Scholes-Merton option-pricing model:

	Year ended December 31,
	2021			2020			2019
Volatility	39.3		%	35.6		%	29.3		%
Risk-free interest rate - weighted average	1.2		%	0.6		%	2.1		%
Risk-free interest rate - range	0.5% to 1.21		%	0.31% to 1.17		%	(a)
Dividend yield	—		%	—		%	—		%
Assumed forfeitures	8.0		%	8.0		%	8.0		%
Expected lives	4.6 years			7.1 years			5.2 years
Weighted-average fair value (per share)	$	39.99		$	48.21		$	43.96

(a) At the date of grant, the risk fee rate for stock options awarded in 2019 was 1.7%.

During 2021, the Company granted approximately 331,000 options that were valued using a Monte Carlo simulation (not included in the table above). The Monte Carlo simulation calculated a fair value per option of $40.30 using the following assumptions: volatility of 40.0%, risk-free interest rate of 1.19%, and a term of 4.5 years. During 2020, the Company granted 1,350,000 options that were valued using a Monte Carlo simulation (not included in the table above). The Monte Carlo simulation calculated a fair value per option of $26.90 using the following assumptions: volatility of 37.0%, risk-free interest rate of 0.33%, and a term of 5.0 years.

Restricted stock

Restricted stock awards vest based on the achievement of time-based service conditions and/or performance-based conditions. For certain awards, vesting is based on the achievement of more than one condition of an award with multiple time-based and/or performance-based conditions.

Summary restricted stock activity is presented in the table below:

	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Nonvested at December 31, 2020	485,510		$	126.62
Granted	191,184		$	117.35
Vested	(107,700	)	$	115.85
Forfeited	(33,890	)	$	98.18
Nonvested at December 31, 2021	535,104		$	127.96

The fair value of shares vested in the years ended December 31, 2021, 2020 and 2019 was $13.8 million, $15.4 million and $16.6 million, respectively. As of December 31, 2021, there was $17.3 million of total unrecognized compensation cost related to unvested time-based restricted stock, which is expected to be recognized over a weighted-average period of 3.0 years. As of December 31, 2021, there was $16.8 million of total unrecognized compensation costs related to unvested performance-based restricted stock, which is expected to be recognized based on Company performance over a weighted-average period of 2.0 years. The weighted average grant date fair value of restricted stock granted during the years ended December 31, 2021, 2020 and 2019 was $115.85, $117.97 and $145.93 per share, respectively.