The Company's 2016 Omnibus Stock Incentive Plan ("2016 SIP") provides for the granting of share-based incentive awards in the form of nonqualified stock options, stock appreciation rights ("SARs"), restricted stock units ("RSUs") and restricted and unrestricted stock to officers and key employees of the Company. On October 23, 2019, the number of shares of common stock authorized for issuance under the 2016 SIP increased to 23.8 million shares. At June 30, 2023, 6.4 million common stock shares were available for future issuance.

We satisfy share-based incentive award obligations by issuing shares of common stock out of treasury, which have been repurchased pursuant to our share repurchase program described in Note 13, or through the issuance of previously unissued common stock.

SARs - Upon exercise, SARs entitle the participant to receive shares of common stock equal to the increase in value of the award between the grant date and the exercise date. SARs are exercisable from one to three years after the date of grant and expire no more than 10 years after grant.

The fair value of each SAR award granted in 2023, 2022 and 2021 was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	2023			2022			2021
Risk-free interest rate	3.0		%	0.8		%	0.4		%
Expected life of award	5.6 years			5.6 years			5.4 years
Expected dividend yield of stock	1.8		%	1.9		%	2.0		%
Expected volatility of stock	37.1		%	35.7		%	35.2		%
Weighted-average fair value	$	97.70		$	81.71		$	53.92

The risk-free interest rate was based on U.S. Treasury yields with a term similar to the expected life of the award. The expected life of the award was derived by referring to actual exercise and post-vesting employment termination experience. The expected dividend yield was based on our historical dividend rate and stock price over a period similar to the expected life of the award. The expected volatility of stock was derived by referring to changes in our historical common stock prices over a time-frame similar to the expected life of the award.


	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding June 30, 2022	4,099,144	$	172.27
Granted	605,135	$	298.26
Exercised	(800,815)	$	134.38
Canceled	(30,035)	$	263.62
Outstanding June 30, 2023	3,873,429	$	199.08	6.0 years	$	739.7
Exercisable June 30, 2023	2,737,336	$	165.45	5.0 years	$	614.8


	Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested June 30, 2022	1,212,497	$	60.44
Granted	605,135	$	97.36
Vested	(654,784)	$	52.13
Canceled	(26,755)	$	83.35
Nonvested June 30, 2023	1,136,093	$	84.36

During 2023, 2022 and 2021, we recognized stock-based compensation expense of $51 million, $37 million and $35 million, respectively, relating to SAR awards. The Company derives a tax deduction measured by the excess of the market value over the grant price at the date stock-based awards are exercised. The related income tax benefit was credited to income tax expense.

At June 30, 2023, $19 million of expense with respect to nonvested SAR awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 23 months. The total fair value of shares vested during 2023, 2022 and 2021 was $34 million, $29 million and $25 million, respectively.

Information related to SAR awards exercised during 2023, 2022 and 2021 is as follows:


	2023		2022		2021
Net cash proceeds	$	3,476	$	2,831	$	4,684
Intrinsic value	$	158,452	$	97,002	$	225,025
Income tax benefit	$	26,854	$	15,845	$	37,437
Number of shares surrendered	152,835		98,673		316,330

RSUs - RSUs constitute an agreement to deliver shares of common stock to the participant at the end of a vesting period. Generally, the RSUs granted to employees vest, and the underlying stock is issued ratably, over a three-year graded vesting period. Nonvested RSUs may not be transferred and do not have dividend or voting rights. For each nonvested RSU, recipients are entitled to receive a dividend equivalent, payable in cash or common shares, equal to the cash dividend per share paid to common shareholders.

The fair value of each RSU award granted in 2023, 2022 and 2021 was based on the fair market value of our common stock on the date of grant. A summary of the status and changes of shares subject to RSU awards for employees and the related average price per share follows:


	Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested June 30, 2022	277,902	$	224.40
Granted	93,336	$	298.54
Vested	(155,718)	$	194.46
Canceled	(9,999)	$	262.95
Nonvested June 30, 2023	205,521	$	278.88

During 2023, 2022 and 2021, we recognized stock-based compensation expense of $27 million, $26 million and $26 million, respectively, relating to RSU awards for employees. At June 30, 2023, $18 million of expense with respect to nonvested RSU awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 21 months. The total fair value of RSU awards vested during 2023, 2022 and 2021 was $30 million, $26 million and $21 million, respectively. We recognized an income tax benefit of $2 million, $4 million and $1 million relating to the issuance of common stock for RSU awards that vested during 2023, 2022 and 2021, respectively.

Additionally, we granted RSUs with a one-year vesting period to non-employee members of the Board of Directors. Recipients receive a dividend equivalent payable in common shares, equal to the cash dividend per share paid to common shareholders. A summary of the status and changes of shares subject to Board of Directors RSU awards and the related average price per share follows:


	Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested June 30, 2022	5,620	$	297.89
Granted	6,638	$	278.99
Vested	(5,650)	$	297.89
Canceled	(383)	$	278.90
Nonvested June 30, 2023	6,225	$	278.90

The fair value of each RSU award granted to the Board of Directors in 2023, 2022 and 2021 was based on the fair market value of our common stock on the date of grant. In 2023, 2022 and 2021, we recognized stock-based compensation expense of $1.9 million, $1.8 million and $1.5 million, respectively, relating to these awards. During 2023, 2022 and 2021, we recognized an income tax (cost) benefit of $(0.02) million, $0.2 million and $2.1 million, respectively, related to the vesting of Board of Directors RSU awards. At June 30, 2023, $0.4 million of expense with respect to nonvested RSU awards granted to the Board of Directors has yet to be recognized and will be amortized into expense over a weighted-average period of approximately three months.

LTIP - The Company's Long Term Incentive Plans ("LTIP") provide for the issuance of unrestricted stock to certain officers and key employees based on the attainment of certain goals relating to our revenue growth, earnings per share growth and return on invested capital during the three-year performance period.


Stock issued and surrendered for LTIP	2023		2022		2021
LTIP three-year plan	2020-21-22		2019-20-21		2018-19-20
Number of shares issued	204,175		251,783		210,864
Number of shares surrendered	102,120		124,007		105,402
Share value on date of issuance	$	311.65	$	271.38	$	317.60
Total value of shares issued	$	63,631	$	68,329	$	66,970

The fair value of each LTIP award granted in 2023, 2022 and 2021 was based on the fair market value of our common stock on the date of grant. These nonvested LTIP awards entitle participants to earn a dividend equivalent unit, payable in common shares, equal to the cash dividend per share paid to common shareholders. These dividend equivalent units do not have dividend or voting rights and are subject to the same performance goals as the initial award granted. A summary of shares relating to the LTIP and the related average price per share follows:


	Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested June 30, 2022	417,789	$	246.63
Granted	186,194	$	301.64
Vested	(199,143)	$	205.95
Canceled	(12,233)	$	279.75
Nonvested June 30, 2023	392,607	$	292.32

During 2023, 2022 and 2021, we recorded stock-based compensation expense of $63 million, $72 million and $59 million, respectively, relating to the LTIP. During 2023, 2022 and 2021, we recognized an income tax benefit of $4 million, $5 million and $2 million, respectively, relating to the LTIP.