In March 2023, our Board of Directors adopted the 2023 Stock Incentive Plan (the “2023 Plan”), which became effective in May 2023 upon stockholder approval and replaced, on a prospective basis, the Second Amended and Restated 2014 Stock Incentive Plan. The 2023 Plan was adopted to increase the shares available for equity by an additional 11.5 million shares.

In March 2019, our Board of Directors adopted the Second Amended and Restated 2014 Stock Incentive Plan, which amended and restated our Amended and Restated 2014 Stock Incentive Plan (the “Amended 2014 Plan”) (together with the Amended 2014

Plan, the “2014 Plans”), which became effective in May 2019 upon stockholder approval. The 2014 Stock Option Plan authorized stock options to be granted for up to 6.0 million shares of our common stock. The Amended 2014 Plan was adopted with an initial share capacity of 24.0 million shares available for the grant of awards. The Amended 2014 Plan authorized the issuance of equity awards, including stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) and allowed the class of participants to include non-employee directors. The Second Amended and Restated 2014 Stock Incentive Plan was adopted to increase the shares available for equity awards by an additional 34.0 million shares.

Under the terms of the 2023 Plan and 2014 Plans, the exercise price of awards is set on the grant date and may not be less than the fair market value per share on such date. Generally, awards expire ten years from the date of grant.

We generally settle RSUs, RSAs, stock appreciation rights (“SARs”), performance-based stock units (“PSUs”), and stock option exercises with newly issued common shares.

During the years ended December 31, 2023 and 2022, we granted RSUs which generally vest 1/3rd on the first anniversary of the grant and 1/4th of the remaining balance each six months thereafter for two years. We did not grant any RSUs during the year ended December 31, 2021. We determine the fair value of RSUs with a service condition using the value of our common stock on the date of the grant. At December 31, 2023, there was approximately $114.5 million of unearned non-cash stock-based compensation related to RSUs that we expect to recognize as expense over a remaining period of approximately 2.1 years. At December 31, 2022, there was approximately $119.9 million of unearned non-cash stock-based compensation related to RSUs that we expect to recognize as expense over a remaining period of approximately 2.9 years.

In July 2021 and March 2022, we granted performance-based stock units at a grant date fair value of $75.03 per share and $71.89 per share, respectively, based on the value of our common stock on the date of the grant. These awards include established annual earnings per share growth targets and will measure performance against the target over the 2-year performance period. Performance is measured relative to a 2-year average annual growth rate that is established at the beginning of the cycle and held constant. Participants will only be entitled to receive any portion of the PSUs that are earned if they remain employed through the final determination of the satisfaction of these performance goals. The actual number of units that will be issued ranges from zero, if the threshold level of performance is not achieved, to 200% of the targeted number of units, if the annual growth rate meets or exceeds a specified level. During the year ended December 31, 2023, the Compensation Committee determined that the PSUs granted in July 2021 did not meet the threshold level of performance and were cancelled. As of December 31, 2023, the March 2022 PSUs did not meet the threshold level of performance and will not vest. During the year ended December 31, 2022, we recorded a true-up to reverse previously recorded stock-based compensation expense relating to the PSUs.

In 2023, we granted performance-based stock units with a market condition at a grant date fair value of $63.50, estimated using a Monte Carlo simulation model as of the date of the grant using an average of implied and historical volatility. These awards include established annual earnings per share growth targets and will measure performance against the target over the 3-year performance period. Performance is measured relative to a 3-year average annual growth rate that is established at the beginning of the cycle and held constant. Participants will only be entitled to receive any portion of the PSUs that are earned if they remain employed through the final determination of the satisfaction of these performance goals. The actual number of units that will be issued ranges from zero, if the threshold level of performance is not achieved, to 200% of the targeted number of units, if the annual growth rate meets or exceeds a specified level. The ultimate payout of the PSUs is also subject to a relative total shareholder return (“TSR”) performance modifier, with the ultimate payout level adjusted upwards or downwards up to 20% (subject to the maximum 200% payout); however, no upward modifier will be applied if the Company's absolute TSR is negative for the 3-year performance period. As of December 31, 2023, there was approximately $16.2 million of unearned non-cash stock-based compensation related to the 2023 PSUs that we expect to recognize over a remaining period of approximately 2.2 years.

Time-based stock options and SARs generally vest 25% on the first anniversary of the grant date and 1/36th of the remaining balance each month thereafter for 36 months. Time-based stock options granted during 2023, 2022 and 2021 have a weighted-average grant date fair value of $17.54, $15.26 and $22.28 per share, respectively, based on the Black-Scholes option pricing model. Compensation expense is recorded on a straight-line basis over the requisite service period. The fair value of time-based stock options vested during the years ended December 31, 2023, 2022 and 2021 was approximately $86.9 million, $102.1 million and $103.0 million, respectively. At December 31, 2023 and 2022, there was approximately $111.7 million and $201.6 million, respectively, of unearned non-cash stock-based compensation related to time-based stock options that we expect to recognize as expense over a weighted-average remaining period of approximately 2.2 years and 2.7 years, respectively.

In March and December 2021, we granted performance-based stock options (“PSOs”). These awards include established annual earnings per share growth targets and will measure performance against the target over the 3-year performance period. Performance is measured relative to a 3-year average annual growth rate that is established at the beginning of the cycle and held constant. Participants will only be entitled to receive any portion of the PSOs that are earned if they remain employed through the final determination of the satisfaction of these performance goals. The actual number of options that will be issued ranges from zero, if the threshold level of performance is not achieved, to 200% of the targeted number of options, if the annual growth rate meets or exceeds a specified level. PSOs granted during 2021 have a weighted-average grant date fair value of $21.88 per share, based on the Black-Scholes options pricing model. During the year ended December 31, 2023 and 2022, no PSOs have vested. At December 31, 2023 and 2022, there was approximately $23.3 million and $60.8 million, respectively of unearned non-cash stock-based compensation related to PSOs that we expect to recognize as expense over a remaining period of approximately 1.2 years and 2.1 years, respectively. If the threshold level of performance is not achieved for the PSOs granted in December 2021, $38.5 million of previously recorded stock-based compensation expense may be reversed.

For the stock-options valued using the Black-Scholes option-pricing model, we used the following weighted-average assumptions:


	Time-based stock options									PSOs
	2023			2022			2021			2021
Expected term to exercise (years)		4.0			4.0			4.0			4.0
Expected volatility		34.6	%		35.3	%		36.4	%		36.3	%
Risk-free interest rate		4.4	%		4.0	%		1.1	%		1.0	%
Expected dividend yield		1.4	%		1.6	%		1.0	%		1.0	%

The amount of stock-based compensation expense recognized in our Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 was as follows (in millions):


	Year Ended December 31,
	2023						2022							2021
Consolidated Statements of Comprehensive Income Classification	Options		RSUs, PSUs		Total		Options, SARs		RSUs, PSUs			Total		Options, SARs		RSUs, PSUs		Total
Cost of software-enabled services	$	34.4	$	22.6	$	57.0	$	47.2	$	(1.1	)	$	46.1	$	39.1	$	3.7	$	42.8
Cost of license, maintenance and other related		4.5	2.3			6.8		5.6		(0.1	)		5.5		5.2	0.1			5.3
Total cost of revenues		38.9		24.9		63.8		52.8		(1.2	)		51.6		44.3		3.8		48.1
Selling and marketing	19.7		9.3			29.0	24.2			(1.3	)		22.9	19.1		1.5			20.6
Research and development	13.9		7.5			21.4	17.2			(0.6	)		16.6	14.2		0.8			15.0
General and administrative	28.1		17.1			45.2	35.1			(1.4	)		33.7	28.4		1.9			30.3
Total operating expenses		61.7		33.9		95.6		76.5		(3.3	)		73.2		61.7		4.2		65.9
Total stock-based compensation expense	$	100.6	$	58.8	$	159.4	$	129.3	$	(4.5	)	$	124.8	$	106.0	$	8.0	$	114.0

The associated future income tax benefit recognized was $30.4 million, $23.8 million and $22.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.

For the year ended December 31, 2023, the amount of cash received from the exercise of stock options was $115.4 million, with an associated tax benefit from stock awards realized of $28.9 million. The intrinsic value of stock options and SARs exercised during the year ended December 31, 2023 was approximately $84.2 million. For the year ended December 31, 2022, the amount of cash received from the exercise of stock options was $91.8 million, with an associated tax benefit from stock awards realized of $19.2 million. The intrinsic value of stock options and SARs exercised during the year ended December 31, 2022 was approximately $92.6 million. For the year ended December 31, 2021, the amount of cash received from the exercise of stock options was $197.7 million, with an associated tax benefit from stock awards realized of $43.6 million. The intrinsic value of stock options and SARs exercised during the year ended December 31, 2021 was approximately $183.7 million.

The following table summarizes stock option and SAR activity as well as RSU and PSU activity as of and for the years ended December 31, 2023, 2022 and 2021 (share data in millions):


	Stock Options and SARs					PSUs and RSUs
	Shares			Weighted-Average Exercise Price		Shares			Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2020		42.7		$	48.16		0.2		$	44.96
Granted	9.5			$	80.24	0.4			$	75.03
Cancelled/forfeited		(2.1	)	$	61.90		—		$	—
Vested		—		$	—		(0.2	)	$	45.59
Exercised		(5.2	)	$	39.23		—		$	—
Outstanding at December 31, 2021		44.9		$	55.31		0.4		$	75.03
Granted		3.2		$	51.45		3.1		$	55.61
Cancelled/forfeited		(1.6	)	$	71.50		(0.1	)	$	72.47
Exercised		(2.9	)	$	32.60		—		$	—
Outstanding at December 31, 2022		43.6		$	55.91		3.4		$	58.71
Granted		0.6		$	58.75		1.4		$	58.54
Cancelled/forfeited		(1.9	)	$	68.89		(0.6	)	$	66.09
Exercised		(3.5	)	$	33.49		—		$	—
Vested		—		$	—		(0.7	)	$	52.72
Outstanding at December 31, 2023		38.8		$	57.38		3.5		$	59.04

The following table summarizes information about vested stock options and SARs outstanding that are currently exercisable and stock options and SARs outstanding that are exercisable and expected to vest at December 31, 2023:

        Outstanding, Vested Stock Options and SARs Currently Exercisable

        Outstanding Stock Options and SARs Exercisable and Expected to Vest

         
        Weighted-

        Weighted-

         
        Weighted-

        Average

        Weighted-

        Average

         
        Average

        Aggregate

        Remaining

        Average

        Aggregate

        Remaining

         
        Exercise

        Intrinsic

        Contractual

        Exercise

        Intrinsic

        Contractual

        Shares

        Price

        Value

        Term

        Shares

        Price

        Value

        Term

        (In millions)

        (In millions)

        (Years)

        (In millions)

        (In millions)

        (Years)

28.4

52.22

337.2

5.04

37.8

56.76

360.0

5.80