The First American Financial Corporation 2020 Incentive Compensation Plan (the “Incentive Compensation Plan”), effective January 22, 2020, permits the granting of stock options, stock appreciation rights, restricted stock, RSUs, PRSUs, performance shares and other stock-based awards. Eligible participants, which include the Company’s directors and officers, as well as other employees, may elect to defer the distribution of their RSUs to a future date beyond the scheduled vesting date. At December 31, 2022, 1.6 million shares of common stock remain available to be issued by the Company, subject to certain annual limits based on the type of award granted. The Company settles its equity awards with authorized but unissued shares of its common stock. The Incentive Compensation Plan terminates 10 years from its effective date unless canceled earlier by the Company’s board of directors.

The First American Financial Corporation 2010 Employee Stock Purchase Plan (the “ESPP”) allows eligible employees the option to purchase common stock of the Company at 85% of the lower of the closing price on either the first or last day of each quarterly offering period. There were 0.6 million shares issued in connection with this plan for the year ended December 31, 2022 and 0.5 million for the years ended December 31, 2021 and 2020.

In March 2022, the Company’s board of directors amended the First American Financial Corporation 2010 Employee Stock Purchase Plan (the “Amended ESPP”), effective July 1, 2022. The Amended ESPP increases the maximum number of shares of Company common stock available for sale from 5 million to 14 million. In addition, the Amended ESPP extends the term of the plan from July 1, 2023 to July 1, 2032. At December 31, 2022, there were 9.0 million shares reserved for future issuances.

The following table summarizes the costs associated with the Company’s share-based compensation plans:


	Year ended December 31,
	2022		2021		2020
	(in millions)
Expense:
RSUs	$	58	$	48	$	47
PRSUs		3		—		—
Employee stock purchase plan		6		6		5
	$	67	$	54	$	52

The following table summarizes RSU and PRSU activity for the year ended December 31, 2022:


(in millions, except weighted-average grant-date fair value)	Shares			Weighted-average grant-date fair value
Unvested at December 31, 2021		0.9		$	58.11
Granted during 2022		1.0			67.65
Vested during 2022		(1.0	)		63.47
Unvested at December 31, 2022		0.9		$	63.01

As of December 31, 2022, there was $29 million of total unrecognized compensation cost related to unvested RSUs and PRSUs that is expected to be recognized over a weighted-average period of 2.0 years. The fair values of RSUs and PRSUs is generally based on the market value of the Company’s shares on the date of grant. The weighted-average grant-date fair values of RSUs and PRSUs for the year ended December 31, 2022 was $67.65 and, for the years ended December 31, 2021 and 2020, the weighted-average grant-date fair values of RSUs were $56.65 and $63.14 for the years ended December 31, 2022, 2021 and 2020, respectively. The total fair values of shares distributed for the years ended December 31, 2022, 2021 and 2020 were $57 million, $49 million and $56 million, respectively. At December 31, 2022, 1.2 million shares were vested but not distributed.