The 2022 ACCO Brands Corporation Incentive Plan, as amended (the "Plan") provides for stock-based awards generally in the form of stock options, restricted stock units ("RSUs") and performance stock units ("PSUs"), any of which may be granted alone or with other types of awards and dividend equivalents. The Plan authorizes the issuance of up to 15,994,631 shares to key employees and non-employee directors.

The Company accrues dividend equivalents ("DEs") on all outstanding RSUs and PSUs as permitted by the Plan. DEs entitle holders of RSUs and PSUs to the same dividend value per share as holders of common stock. RSUs and PSUs are credited with DEs that are converted to RSUs and PSUs at the fair market value of our common stock on the dates the dividend payments are made and are subject to the same terms and conditions as the underlying award. DEs credited to RSUs and PSUs will only be paid to the extent the awards vest and any performance goals are achieved.

We will satisfy the requirement for delivering shares of our common stock for the Plan by issuing new shares.

The following table summarizes the impact of all stock-based compensation expense on our Consolidated Statements of Loss for the years ended December 31, 2024, 2023 and 2022:


(in millions)	2024			2023			2022
Selling, general and administrative expense	$	11.9		$	14.8		$	9.5
(Loss) income before income tax		(11.9	)		(14.8	)		(9.5	)
Income tax expense		(2.9	)		(3.4	)		(2.2	)
Net loss	$	(9.0	)	$	(11.4	)	$	(7.3	)

Stock-based compensation expense by award type for the years ended December 31, 2024, 2023 and 2022 was as follows:


(in millions)	2024		2023		2022
Stock option compensation expense	$	0.5	$	2.7	$	3.7
RSU compensation expense		7.5		6.4		4.4
PSU compensation expense		3.9		5.7		1.4
Total stock-based compensation expense	$	11.9	$	14.8	$	9.5

The exercise price of each stock option equals or exceeds the fair market price of our stock on the date of grant. Options granted beginning in 2020 can generally be exercised over a term of ten years and prior to 2020 options could generally be exercised over a term of seven years. Stock options outstanding as of December 31, 2024, generally vest ratably over three years from the grant date. There were no stock options granted during the years ended December 31, 2024 and 2023. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model and the weighted average assumptions as outlined in the following table:


		Year Ended December 31,
		2022
Weighted average expected lives		6.0 years
Weighted average risk-free interest rate		1.89 %
Weighted average expected volatility		41.7 %
Expected dividend yield		3.60 %
Weighted average grant date fair value		$2.43

The weighted average expected option term of the Company's "plain vanilla" stock options granted during the year ended December 31, 2022 reflect the application of the simplified method, as prescribed by Staff Accounting Bulletin Topic 14. The simplified method was used as the Company does not believe it has sufficient historical exercise data to provide a reasonable basis for the expected term of its stock option grants. The simplified method will be used until such time as the Company has stock option exercise experience in which to reasonably determine the expected life. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Volatility is calculated using ACCO Brands' historic volatility.

A summary of the changes in stock options outstanding under the Plan during the year ended December 31, 2024 is presented below:


	Number Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2023		6,625,226		$	9.26
Forfeited/Expired		(913,930	)	$	11.27
Outstanding at December 31, 2024		5,711,296		$	8.94	4.7 years	zero
Exercisable shares at December 31, 2024		5,212,811				4.5 years	zero

There were no options exercised during the years ended December 31, 2024 and 2023. We received cash of $4.3 million from the exercise of stock options during the year ended December 31, 2022. The aggregate intrinsic value of options exercised during the year ended December 31, 2022 totaled $0.5 million.

The fair value of options vested during the years ended December 31, 2024, 2023, and 2022 was $2.5 million, $3.4 million and $3.1 million, respectively. As of December 31, 2024, we had unrecognized compensation expense related to stock options of $0.1 million, which will be recognized over a weighted-average period of 0.2 years.

RSUs vest over a pre-determined period of time, generally three years from the date of grant. Stock-based compensation expense for the years ended December 31, 2024, 2023 and 2022 includes $1.4 million, $1.3 million and $1.2 million, respectively, of expense related to RSUs granted to non-employee directors as a component of their compensation. RSUs granted to non-employee directors prior to 2021 became fully vested on the grant date; after 2021 non-employee director RSUs fully vest on the first anniversary of the grant date.

PSUs also vest over a pre-determined period of time, generally not longer than three years, but are further subject to the achievement of certain business performance criteria being met. Based upon the level of achieved performance, the number of shares actually awarded can vary from 0 percent to 200 percent of the original grant.

There were 4,241,889 RSUs outstanding as of December 31, 2024. All outstanding RSUs as of December 31, 2024 vest within three years of their date of grant. Upon vesting, all of the RSU awards will be converted into the right to receive one share of common stock of the Company for each unit that vests. The cost of these awards is determined using the fair value of the shares on the date of grant, and compensation expense is generally recognized over the period during which the employee provides the requisite service to the Company.

A summary of the changes in the RSUs outstanding under the Plan during 2024 is presented below:


	Stock Units			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023		3,444,450		$	6.63
Granted		1,501,759		$	5.31
Vested and distributed		(253,634	)	$	8.43
Vested and deferred distributed		(133,273	)	$	7.71
Forfeited and cancelled		(317,413	)	$	6.09
Outstanding at December 31, 2024		4,241,889		$	6.06
Vested and deferred at December 31, 2024(1)		767,216		$	7.80

(1)

Included in outstanding at December 31, 2024. Vested and deferred RSUs are primarily related to deferred compensation for non-employee directors.

For the years ended December 31, 2023 and 2022, we granted 1,969,191 and 695,057 RSUs, respectively. The weighted-average grant date fair value of our RSUs was $5.31, $5.23, and $8.15 for the years ended December 31, 2024, 2023 and 2022, respectively. The fair value of RSUs that vested during the years ended December 31, 2024, 2023 and 2022 was $3.3 million, $4.4 million and $5.1 million, respectively. As of December 31, 2024, we have unrecognized compensation expense related to RSUs of $7.0 million, which will be recognized over a weighted-average period of 1.9 years.

A summary of the changes in the PSUs outstanding under the Plan during 2024 is presented below:


	Stock Units			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023		1,771,690		$	6.48
Granted		1,825,683		$	5.80
Vested and distributed		(685,998	)	$	6.74
Forfeited and cancelled		(319,295	)	$	5.65
Other - increase due to performance of PSUs		954,162		$	5.21
Outstanding at December 31, 2024		3,546,242		$	5.81

For the years ended December 31, 2023 and 2022, we granted 2,301,907 and 1,170,884 PSUs, respectively. For the years ended December 31, 2024, 2023 and 2022, 685,998, 336,077 and 350,656 PSUs vested, respectively. The weighted-average grant date fair value of our PSUs was $5.80, $5.39, and $8.88 for the years ended December 31, 2024, 2023 and 2022, respectively. The fair value of PSUs that vested during the years ended December 31, 2024, 2023 and 2022 was $4.6 million, $2.8 million and $3.0 million, respectively. Based on the level of achievement of the performance targets associated with the PSU awards, as of December 31, 2024, we have $4.4 million of unrecognized compensation expense, which will be recognized over a weighted-average period of 1.5 years.