COMMON STOCK

The authorized capital stock of the Company consists of 500.0 million shares of Class A Common Stock, par value $0.001 per share (“Class A Common Stock”), 75.0 million shares of Class B Common Stock, par value $0.001 per share (“Class B Common Stock”), and 10.0 million shares of Preferred Stock, par value $0.001 per share.

The Company has two classes of issued and outstanding common stock: Class A Common Stock and Class B Common Stock. Holders of Class A Common Stock and holders of Class B Common Stock have substantially identical rights, including rights with respect to any declared dividends or distributions of cash or property, and the right to receive proceeds on liquidation or dissolution of the Company after payment of the Company’s indebtedness. The two classes have different voting rights, with holders of Class A Common Stock entitled to one vote per share while holders of Class B Common Stock are entitled to ten votes per share on all matters submitted to a vote of stockholders. The Company uses the two-class method for calculating net earnings per share (“EPS”). Basic and diluted net EPS of Class A Common Stock and Class B Common Stock are identical. The shares of Class B Common Stock are convertible at any time at the option of the holder into shares of Class A Common Stock on a share-for-share basis. In addition, shares of Class B Common Stock will be automatically converted into a like number of shares of Class A Common Stock upon transfer to any person or entity who is not a permitted transferee.

During the years ended December 31, 2024, 2023 and 2022 certain Class B stockholders converted 803,758, 627,632 and 128,530 shares, respectively, of Class B Common Stock to Class A Common Stock.

SHARE REPURCHASE PROGRAM

The Company's Board of Directors authorized a new share repurchase program effective July 25, 2024, pursuant to which the Company may purchase shares of its Class A common stock, for an aggregate repurchase price not to exceed $1.0 billion. This repurchase program expires on July 25, 2027, does not obligate the Company to acquire any particular amount of shares, and replaced the prior share repurchase program. At December 31, 2024, there was $789.9 million remaining to repurchase shares under the program.

The share repurchase program authorized in 2022 allowed the Company to purchase shares of its Class A common stock for an aggregate price not to exceed $500.0 million. The remaining authorization under this repurchase program was terminated upon authorization of the new program in 2024.

INCENTIVE AWARD PLAN

On April 6, 2023, the Company's Board of Directors adopted the 2023 Incentive Award Plan (the "2023 Plan"), which became effective upon approval by the Company's stockholders on June 12, 2023. The 2023 Plan superseded prior plans. Awards issued and outstanding under the prior plan vest in accordance with the original terms. A total of 7.5 million shares of Class A Common Stock are reserved for issuance under the 2023 Plan, which provides for the grants of restricted stock, restricted stock units and various other types of equity awards as described in the plan to the employees, consultants, and directors of the Company. The 2023 Plan is administered by the Company's Board of Directors with respect to awards to non-employee directors and by the Company's Compensation Committee with respect to other eligible participants.

For the year ended December 31, 2024, the Company granted restricted stock with time-based vesting, as well as performance-based awards. The performance-based awards include those with a market condition tied to the Company’s total shareholder return in relation to its peer companies as well as those with a financial performance condition tied to annual EPS growth. The vesting and ultimate payout of performance awards is determined at the end of the three-year performance period and can vary from zero to 200% based on actual results. As of December 31, 2024, a total of 5,807,480 shares remain available for grant as equity awards under the 2023 Plan if target levels are achieved for performance-based awards and 5,223,030 available if maximum levels are achieved.

The Company determines the fair value of restricted stock awards and any performance-related components based on the closing market price of the Company’s common stock on the date of grant. For share-based awards with a performance-based vesting requirement, the Company evaluates the probability of achieving the performance criteria throughout the performance period and will adjust stock compensation expense up or down based on its estimated probable outcome. Certain performance-based awards contain market condition components which are valued on the date of grant using a Monte Carlo simulation model.

The Company recognized, as part of general and administrative, compensation expense of $83.4 million, $65.1 million and $57.3 million for grants under the Plan for the years ended December 31, 2024, 2023 and 2022. Related excess tax expense (benefit) on stock compensation recorded in the Consolidated Statements of Earnings for the years ended December 31, 2024, 2023 and 2022, was $(4.7) million, $(0.9) million, and $1.3 million. Nonvested shares generally vest over a graded vesting schedule from one to four years from the date of grant. For grants that have a service requirement, the Company accounts for forfeitures upon occurrence, rather than estimating the probability of forfeiture at the date of grant. Accordingly, the Company recognizes the full grant-date fair value of these awards on a straight-line basis throughout the requisite service period. There was $83.9 million of unrecognized compensation cost related to nonvested restricted shares as of December 31, 2024, which is expected to be recognized over a weighted-average period of 1.47 years. The total grant-date fair value of shares vested during the years ended December 31, 2024, 2023 and 2022 was $84.6 million, $43.4 million and $51.4 million.

STOCK PURCHASE PLAN

As approved by the Company’s stockholders on May 23, 2017, the 2018 Employee Stock Purchase Plan (the “ESPP”) provides a total of 5.0 million shares of Class A Common Stock for sale. The ESPP provides eligible employees of the Company and its subsidiaries the opportunity to purchase shares of the Company’s Class A Common Stock at a purchase price equal to 85% of the fair market value on the first trading day or last trading day of each purchase period, whichever is lower. Eligible employees can invest up to 15% of their compensation through payroll deductions during each purchase period. The purchase price discount and the look-back feature cause the ESPP to be compensatory and the Company recognizes compensation expense, which is computed using the Black-Scholes valuation model.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized $3.3 million, $2.9 million, and $2.6 million of ESPP stock compensation expense. Under the ESPP, the Company received cash of approximately $11.0 million, $9.4 million and $8.1 million, and issued 213,168, 242,166 and 243,166 shares, for the years ended December 31, 2024, 2023 and 2022. As of December 31, 2024, there were 3,360,412 shares available for sale under the ESPP.