The Company issues share-based compensation awards under the Zebra Technologies 2018 Long-Term Incentive Plan (“2018 Plan”), approved by shareholders in 2018 which superseded and replaced all prior share-based incentive plans. Outstanding awards issued prior to the 2018 Plan are governed by the provisions of those plans until such awards have been exercised, forfeited, cancelled, expired or otherwise terminated in accordance with their terms. Awards available under the 2018 Plan include stock-settled awards, including stock-settled restricted stock units, stock-settled performance stock units, restricted stock awards, performance share awards, stock appreciation rights, incentive stock options, and non-qualified stock options. Awards available under the 2018 Plan also include cash-settled awards, including cash-settled stock appreciation rights, cash-settled restricted stock units, and cash-settled performance stock units. No awards remain available for future grants under previous plans.

The Company uses treasury shares as its source for issuing shares under the share-based compensation programs. As of December 31, 2022, the Company had 2,791,708 shares of Class A Common stock remaining available to be issued under the 2018 Plan.

The compensation expense from the Company’s share-based compensation plans and associated income tax benefit, excluding the effects of excess tax benefits or shortfalls, were included in the Consolidated Statements of Operations as follows (in millions):


	Year Ended December 31,
Compensation costs and related income tax benefit	2022		2021		2020
Cost of sales	$	6	$	8	$	6
Selling and marketing	22		26		16
Research and development	34		28		16
General and administration	34		31		21
Total compensation expense	$	96	$	93	$	59
Income tax benefit	$	17	$	14	$	9

As of December 31, 2022, total unearned compensation costs related to the Company’s share-based compensation plans was $111 million, which will be recognized over the weighted average remaining service period of approximately 1.4 years.

The majority of the Company’s share-based compensation awards are generally issued as part of its employee and non-employee director incentive program during the second quarter of each fiscal year. The Company also issues awards associated with business acquisitions or other off-cycle events.

The Company began issuing stock-settled RSUs and stock-settled PSUs in the second quarter of 2021. Stock-settled RSUs and stock-settled PSUs each typically vest over a three-year service period, with stock-settled RSUs vesting ratably in three annual installments and stock-settled PSUs vesting at the end of the three-year period. Vesting for each participant is subject to restrictions, such as continuous employment, except in certain cases as set forth in each stock agreement. Upon vesting, stock-settled RSUs and stock-settled PSUs are converted into shares of Class A Common Stock that are released to participants.

Compensation cost for the Company’s stock-settled RSUs and stock-settled PSUs is expensed over each participant’s required service period. Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of units granted, net of estimated forfeitures. The fair value of PSUs also includes assumptions around achievement of certain Company-wide financial performance goals.

Prior to 2021, the Company’s restricted stock grants consisted of time-vested RSAs and PSAs as part of the Company’s annual incentive program. These awards are considered participating securities, and as such, are included as part of the Company’s Class A Common Stock outstanding. The RSAs and PSAs vest at each vesting date, subject to restrictions such as continuous employment, except in certain cases as set forth in each stock agreement. Upon vesting, RSAs and PSAs are released to holders and are no longer subject to restrictions.

Compensation cost for the Company’s RSAs and PSAs is expensed over each participant’s required service period. Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of awards granted, net of estimated forfeitures. The fair value of PSAs also includes assumptions around achievement of certain Company-wide financial performance goals. The total required service period is typically three years.

The Company also issues RSAs to non-employee directors. The number of shares granted to each non-employee director is determined by dividing the value of the annual grant by the price of a share of the Company’s Class A Common Stock. New directors in any fiscal year earn a prorated amount. During fiscal 2022, there were 5,686 shares granted to non-employee directors compared to 2,877 and 6,314 during fiscal 2021 and 2020, respectively. The shares vest immediately upon grant.


	Year Ended December 31, 2022
	RSUs			PSUs			RSAs			PSAs
	Units	Weighted-Average Grant Date Fair Value		Units	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	130,009	$	518.80	37,691	$	482.42	154,322	$	253.54	74,032	$	225.34
Granted	181,351	359.02		70,777	367.16		6,122	321.03		—	—
Released	(48,095)	518.64		(226)	482.42		(104,891)	248.36		(38,671)	206.62
Forfeited	(20,533)	463.11		(2,314)	410.80		(8,582)	259.93		(115)	244.62
Outstanding at end of year	242,732	$	404.19	105,928	$	406.89	46,971	$	271.92	35,246	$	245.79


	Year Ended December 31, 2021
	RSUs			PSUs			RSAs			PSAs
	Units	Weighted-Average Grant Date Fair Value		Units	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at beginning of year	—	$	—	—	$	—	318,565	$	228.08	126,022	$	199.77
Granted	134,419	518.39		38,393	482.42		6,005	486.02		—	—
Released	(674)	489.16		—	—		(159,702)	212.33		(49,236)	160.11
Forfeited	(3,736)	509.58		(702)	482.42		(10,546)	239.78		(2,754)	236.18
Outstanding at end of year	130,009	$	518.80	37,691	$	482.42	154,322	$	253.54	74,032	$	225.34


		Year Ended December 31, 2020
	RSAs	PSAs
		Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		434,641	$	151.52	170,749	$	144.47
Granted		178,150	265.06		98,820	239.79
Released		(275,318)	133.43		(131,943)	160.18
Forfeited		(18,908)	199.04		(11,604)	194.23
Outstanding at end of year		318,565	$	228.08	126,022	$	199.77

SARs were previously granted primarily as part of the Company’s annual share-based compensation incentive program. Beginning in 2021, the Company no longer included SARs in its annual share based compensation award issuances and did not issue any SARs during the years ended December 31, 2022 and 2021. The total fair value of SARs granted during the year ended December 31, 2020 was $6 million, which was estimated on the respective dates of grant using a binomial model.

A summary of the Company’s SARs is as follows:


	2022			2021			2020
SARs	SARs	Weighted-Average Grant Date Exercise Price		SARs	Weighted-Average Grant Date Exercise Price		SARs	Weighted-Average Grant Date Exercise Price
Outstanding at beginning of year	474,151	$	121.05	638,124	$	113.98	896,923	$	89.05
Granted	—	—		—	—		69,742	253.62
Exercised	(28,659)	88.35		(159,035)	89.87		(295,770)	67.96
Forfeited	(1,987)	229.46		(4,938)	213.80		(31,193)	149.09
Expired	(29)	205.12		—	—		(1,578)	166.52
Outstanding at end of year	443,476	$	122.67	474,151	$	121.05	638,124	$	113.98
Exercisable at end of year	400,351	$	110.14	383,273	$	97.29	417,856	$	81.88

The intrinsic value of SARs exercised during fiscal 2022, 2021 and 2020 was $8 million, $69 million and $60 million, respectively. The total fair value of SARs that vested during fiscal 2022, 2021 and 2020 was $3 million, $5 million and $8 million, respectively.

In connection with the Company’s acquisition of Reflexis in 2020, the Company assumed the 2016 Stock Incentive Plan of Reflexis Systems, Inc. (the “Reflexis Plan”) and replaced certain unvested options under the Reflexis Plan with Zebra incentive stock options (“Reflexis Replacement Options”). Upon exercise of Reflexis Replacement Options, the Company receives cash proceeds equal to the exercise price and issues whole shares of Class A Common Stock to participants.

As of December 31, 2022, there were 17,457 outstanding Reflexis Replacement Options, of which 16,148 were exercisable. The outstanding awards have a weighted average exercise price and remaining contractual life of $58.20 and 5.4 years, respectively. The awards that are exercisable have a weighted average exercise price and remaining contractual life of $56.69 and 5.3 years, respectively. The intrinsic value of Reflexis Replacement Options exercised during fiscal 2022, 2021 and 2020 was $2 million, $4 million and $1 million, respectively. The total fair value of Reflexis Replacement Options that vested during fiscal 2022, 2021 and 2020 was $1 million, $5 million and $2 million, respectively.

The Company also issues cash-settled share-based compensation awards, including cash-settled stock appreciation rights, cash-settled restricted stock units and cash-settled performance stock units that are classified as liability awards. These awards are expensed over the vesting period of the related award, which is typically three years. Compensation cost is calculated at the fair value on grant date multiplied by the number of share-equivalents granted. The fair value is remeasured at the end of each reporting period based on the Company’s stock price, with remeasurements reflected as an adjustment to compensation expense in the Consolidated Statements of Operations. Cash settlement is based on the fair value of share equivalents at the time of vesting, which was $5 million, $11 million and $9 million in 2022, 2021 and 2020, respectively. Share-equivalents issued under these programs totaled 66,923, 11,644 and 40,166 in fiscal 2022, 2021 and 2020, respectively.

In May 2020, the Company’s stockholders approved the Zebra Technologies Corporation 2020 Employee Stock Purchase Plan (“2020 ESPP”), which superseded the 2011 Employee Stock Purchase Plan (“2011 ESPP”) and became effective on July 1,