On May 14, 2021, our stockholders approved the ANSYS, Inc. 2021 Equity and Incentive Compensation Plan (the 2021 Plan). The 2021 Plan is a long-term incentive plan pursuant to which awards may be granted to directors, officers, other employees and certain consultants of Ansys and its subsidiaries. These awards may include stock option rights, stock appreciation rights, restricted stock, restricted stock units, cash incentives, performance shares, performance units and other awards. The 2021 Plan authorizes 4.4 million shares of common stock for issuance, plus 1.6 million shares that remained available for issuance under the Fifth Amended and Restated ANSYS, Inc. 1996 Stock Option and Grant Plan (the Predecessor Plan) as of the effective date of the 2021 Plan plus any shares relating to the outstanding awards under the Predecessor Plan or the 2021 Plan that are subsequently forfeited. As of the effective date of the 2021 Plan, grants were no longer made under the Predecessor Plan.

The 2021 Plan requires a minimum vesting period or performance period of one year for most award types and a maximum period for options to be exercisable as ten years from the grant date. Upon the death or disability of a participant, performance awards are vested pro-rata, subject to any performance target requirements, and all other awards become fully vested. The Compensation Committee of the Board of Directors may, at its sole discretion, accelerate the date or dates on which an award granted under the 2021 Plan may vest in the event of a change in control or an employee's termination of employment. A change in control will result in awards either being assumed by the acquirer or the pre-existing awards becoming immediately vested and earned at target award levels. In the event an employee is terminated without cause within 18 months after the change in control, any assumed awards will become immediately vested.

We currently issue shares related to exercised stock options or vested awards from our existing pool of treasury shares and have no specific policy to repurchase treasury shares as stock options are exercised or as awards vest. If the treasury pool is depleted, we will issue new shares.


	Year Ended December 31,
(in thousands, except per share amounts)	2024		2023		2022
Cost of sales:
Maintenance and service	14,313		13,337		10,073
Operating expenses:
Selling, general and administrative	161,905		126,175		93,117
Research and development	94,682		82,379		64,938
Stock-based compensation expense before taxes	270,900		221,891		168,128
Related income tax benefits	(65,647)		(53,880)		(50,209)
Stock-based compensation expense, net of taxes	$	205,253	$	168,011	$	117,919

As of December 31, 2024, total unrecognized estimated compensation expense related to awards granted prior to that date was $352.8 million, which is expected to be recognized over a weighted average period of 1.5 years. Forfeitures of awards are accounted for as they occur.

Prior to 2017, we granted stock option awards. The value of each stock option award was estimated on the date of grant, or date of acquisition for options issued in a business combination, using the Black-Scholes option pricing model (Black-Scholes model). The determination of the fair value of stock-based payment awards using an option pricing model was affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables included our stock volatility during the preceding six years, actual and projected employee stock option exercise behaviors, interest rate assumptions using the five-year U.S. Treasury Note yield on the date of grant or acquisition date and expected dividends. The stock-based compensation expense for options was recorded ratably over the requisite service period.


	Year Ended December 31,
	2024			2023			2022
(options in thousands)	Options	Weighted- Average Exercise Price		Options	Weighted- Average Exercise Price		Options	Weighted- Average Exercise Price
Outstanding, beginning of year	103	$	94.23	226	$	94.24	375	$	83.67
Granted	—	$	—	—	$	—	—	$	—
Exercised	(1)	$	86.57	(123)	$	94.32	(148)	$	67.56
Forfeited	(2)	$	86.01	—	$	—	(1)	$	67.44
Outstanding, end of year	100	$	94.46	103	$	94.23	226	$	94.24
Vested and Exercisable, end of year	100	$	94.46	103	$	94.23	226	$	94.24
Nonvested	—	$	—	—	$	—	—	$	—


	2024		2023		2022
Weighted Average Remaining Contractual Term (in years)
Outstanding	1.59		2.52		3.53
Vested and Exercisable	1.59		2.52		3.53
Aggregate Intrinsic Value (in thousands)
Exercised	$	83	$	28,231	$	30,358
Outstanding	$	24,370	$	27,717	$	33,361
Vested and Exercisable	$	24,370	$	27,717	$	33,361
Compensation Expense - Stock Options (in thousands)	$	—	$	—	$	—


Award	Vesting Period	Vesting Condition
Restricted stock units with a service condition only	Three years	Prior to March 2023, one third of the awards vested annually. Commencing in March 2023, one third vests in the first year and then one eighth quarterly thereafter.
Restricted stock units with an operating performance and service condition	Three years	Operating performance metrics as defined at the beginning of each sub-performance period and subject to continued employment through the vesting period.
Restricted stock units with a market and service condition	Three years	Our performance measured by total stockholder return relative to the Nasdaq Composite Index for the performance period and subject to continued employment through the vesting period.
Board of Director restricted stock unit awards	The earlier of one year or the next regular meeting of stockholders	Continued service on the Board of Directors through the vesting period. Directors that retire prior to the vest date receive a pro-rata portion of the RSUs.

The fair value of RSUs with operating performance metrics is based on the fair market value of our stock on the date of the grant and is recognized from the grant date through the vesting period based on management's estimates concerning the probability of operating performance metric achievement.

The fair values of RSUs with a market condition were estimated using a Monte Carlo simulation model and are recognized over the vesting period. The determination of the fair values of the awards was affected by the grant date and several variables, each of which has been identified in the chart below. Due to the pending merger with Synopsys, there were no RSUs with a market condition issued in 2024.


	Year Ended December 31,
Assumptions used in Monte Carlo lattice pricing model	2023	2022
Risk-free interest rate	4.6%	1.8%
Expected dividend yield	—%	—%
Expected volatility—Ansys stock price	36%	37%
Expected volatility—Nasdaq Composite Index	25%	26%
Expected term	2.8 years	2.8 years
Correlation factor	0.83	0.84
Weighted average fair value per share	$452.14	$290.65


	Year Ended December 31,
	2024			2023			2022
(RSUs in thousands)	RSUs	Weighted- Average Grant Date Fair Value		RSUs	Weighted- Average Grant Date Fair Value		RSUs	Weighted- Average Grant Date Fair Value
Nonvested, beginning of year	1,538	$	309.33	1,220	$	301.72	1,074	$	278.02
Granted(1)	948	$	339.43	867	$	314.04	861	$	299.08
Performance adjustment - awards with market condition(2)	(20)	$	285.28	(11)	$	279.42	(8)	$	276.73
Performance adjustment - awards with performance condition(2)	59	$	339.62	79	$	310.37	73	$	300.28
Vested	(894)	$	310.84	(558)	$	300.30	(598)	$	257.51
Forfeited	(76)	$	322.38	(59)	$	313.58	(182)	$	295.13
Nonvested, end of year	1,555	$	327.62	1,538	$	309.33	1,220	$	301.72

(1) Includes all RSUs granted during the year. RSUs with operating performance conditions have one performance cycle or three sub-performance cycles. Performance conditions are assigned near the beginning of each performance cycle or sub-performance cycle, as applicable, and awards are reflected as grants at the target number of units at that time.

(2) RSUs with a market or performance condition are granted at target and vest based on achievement of the market or operating performance and service conditions. The actual number of RSUs issued may be more or less than the target RSUs depending on the achievement of the market or operating performance conditions.

On May 12, 2022, our stockholders approved the ANSYS, Inc. 2022 Employee Stock Purchase Plan (2022 ESPP) and the reservation by our Board of Directors of 750,000 shares of common stock for issuance under the 2022 ESPP. On October 27, 2022, our Board of Directors approved the amendment and restatement of the 2022 ESPP. The 2022 ESPP replaced the 1996 Employee Stock Purchase Plan (1996 Plan) in its entirety. Shares issued in 2024 were issued under the 2022 ESPP. The 2022 ESPP and 1996 Plan (Purchase Plans) allow our employees and employees of our designated subsidiaries to purchase shares of our common stock at a discount to fair market value. Due to the pending merger with Synopsys, there were no offering periods under the Purchase Plans in 2024 after the conclusion of the offering period ending January 31, 2024. There were 634,167 shares available for future purchases as of December 31, 2024.

The Purchase Plans are administered by the Compensation Committee. Offerings under the Purchase Plans commence on the first business day occurring on or before each February 1 and August 1, and end on the last business day occurring on or before the following July 31 and January 31, respectively. An employee who owns or is deemed to own shares of stock representing in excess of 5% of the combined voting power of all classes of our stock may not participate in the Purchase Plans.

During each offering, an eligible employee may purchase shares by authorizing payroll deductions of up to 10% of his or her cash compensation during the offering period. The maximum number of shares that may be purchased by any participating employee during any offering period is limited to 3,840 shares. Subject to limitations within the Purchase Plans, each employee's accumulated payroll deductions will be used to purchase common stock on the last day of the applicable offering period at a price equal to 85% of the fair market value of the common stock on the first or last day of the applicable offering period, whichever is less. Under applicable tax rules, an employee may not accrue at a rate that exceeds $25,000 of the fair market value of our stock (determined on the option grant date or dates) for each calendar year in which the option to purchase shares is outstanding at any time. As of December 31, 2024, 115,833 shares of common stock had been issued under the 2022 ESPP. The total compensation expense recorded under the Purchase Plans during the years ended December 31, 2024, 2023 and 2022 was $0.3 million, $8.3 million and $4.2 million, respectively.