The 2022 Equity and Cash Incentive Plan (“2022 ECIP”) authorizes us to issue stock options, stock appreciation rights, restricted stock awards, performance-based awards and cash awards to officers and key employees. The 2022 ECIP authorizes us to issue up to 2,651,472 shares of common stock, and expires on June 15, 2032, after which time no further awards may be made. As of December 31, 2024, 2,427,008 shares were available for future grants under the 2022 ECIP, which includes anticipated future adjustments to shares for performance-based awards that have been previously granted.

The 2016 Directors Stock Unit Plan (“2016 Director’s Plan”) authorizes us to issue stock units to non-employee directors and expires on July 8, 2026. The 2016 Director’s Plan authorizes us to issue up to 250,000 shares of common stock, which includes all shares that have been issued under the 2016 Director’s Plan. As of December 31, 2024, 125,310 shares were available for future grants under the 2016 Director’s Plan.

The 2020 Inducement Award Plan (“2020 Inducement Plan”) authorizes us to issue stock options, stock appreciation rights, restricted stock awards and stock units to key employees and expires on December 14, 2030, after which time no further awards may be made. The 2020 Inducement Plan authorizes us to issue up to 19,000 shares of common stock. As of December 31, 2024, 8,903 shares were available for future grants under the 2020 Inducement Plan. As of December 31, 2024 and 2023 there were no shares outstanding under the 2020 Inducement Plan.

The following table presents stock option activity for the year ended December 31, 2024:


	Number of shares (thousands)			Weighted-average exercise price
Option shares outstanding, December 31, 2023		6.2		$	48.86
Option shares exercised		(6.2	)	$	48.86
Option shares outstanding, December 31, 2024		-		$	-
Option shares exercisable, vested and expected to vest, December 31, 2024		-		$	-

The following table presents information related to stock option exercises:


	2024		2023		2022
Total intrinsic value of stock options exercised	$	0.3	$	1.3	$	1.3
Cash proceeds received from stock options exercised		1.4		0.2		1.8
Tax deduction realized from stock options exercised		0.1		0.3		0.1

The fair value of option grants was estimated on the date of grant using the Black-Scholes option pricing model. There have been no option grants since 2014.

In 2024 we also granted non-vested stock awards in the form of Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”). A summary of the 2024 activity related to the RSUs and PSUs is as follows:


	Non-Vested Stock Awards
	RSUs						PSUs
	Number of shares (thousands)			Weighted- average fair value at grant date			Number of shares (thousands)			Weighted- average fair value at grant date
December 31, 2023		205.4		$	75.56			308.5		$	98.44
Granted		68.8			124.10			65.7			140.44
Performance adjustments		-			-			(0.2	)		(102.16	)
Vested		(33.7	)		(82.29	)		(103.9	)		(104.75	)
Forfeited		(8.7	)		(89.80	)		(9.1	)		(100.83	)
December 31, 2024		231.8		$	88.46			261.0		$	108.09

RSUs entitle the recipient to a specified number of shares of AWI’s common stock provided the prescribed service period is fulfilled. PSUs entitle the recipient to a specified number of shares of AWI’s common stock provided the prescribed service period is fulfilled and the defined financial targets are achieved at the end of the performance period. Upon vesting, final adjustments based upon financial achievements are reflected as performance adjustments in the table above. RSUs and PSUs generally have vesting periods of three years at the grant date. RSUs and PSUs earn dividends during the vesting period that are subject to forfeiture if the awards do not vest.

RSUs and PSUs with non-market based performance conditions are measured at fair value based on the closing price of our stock on the date of grant. In 2024 and 2023, we granted 31,118 and 48,073 PSUs, respectively, with market-based performance conditions that are valued through the use of a Monte Carlo simulation. The weighted average assumptions for PSUs measured at fair value through the use of a Monte Carlo simulation are presented in the table below.


	2024			2023
Weighted-average grant date fair value of market-based PSUs granted (dollars per award)	$	164.22		$	121.69
Assumptions
Risk-free rate of return		4.4	%		4.5	%
Expected volatility		27.7	%		38.7	%
Expected term (in years)		3.1			3.1
Expected dividend yield		0.0	%		0.0	%

The risk-free rate of return was determined based on the implied yield available on zero coupon U.S. Treasury bills at the time of grant with a remaining term equal to the expected term of the PSUs. The expected volatility was based on historical volatility of our stock price commensurate with the expected term of the PSUs. The expected term represented the performance period for the underlying

award. The expected dividend yield was assumed to be zero under the assumption that dividends distributed during the performance period are reinvested in AWI’s common stock.

As of December 31, 2024 and 2023, there were 31,472 and 53,938 RSUs, respectively, outstanding under the 2016 Directors Stock Unit Plan not reflected in the non-vested stock awards table above. In 2024 and 2023, we granted 7,041 and 13,086 RSUs, respectively, to non-employee directors. These awards generally have a vesting period of one year, and as of December 31, 2024 and 2023, 24,431 and 40,852 shares, respectively, were vested but not yet delivered. The awards are generally payable upon vesting or the director’s deferral election. These awards earn dividends during the vesting period that are subject to forfeiture if the underlying award does not vest.

We recognize share-based compensation expense on a straight-line basis over the vesting period. Share-based compensation cost was $18.3 million ($13.7 million net of tax benefit) in 2024, $18.8 million ($14.1 million net of tax benefit) in 2023, and $14.3 million ($10.8 million net of tax benefit) in 2022.

As of December 31, 2024, there was $23.1 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements which is expected to be recognized over a weighted-average period of 1.8 years.