11. SHARE-BASED COMPENSATION Effective July 1, 2015, our eligible employees commenced participation in the 2015 LTIP. The 2015 LTIP authorizes the Board to grant stock options, stock appreciation rights, restricted shares, restricted share units, performance awards, and dividend equivalents. All grants are made by issuing new shares and no more than 4.0 million shares of common stock may be issued under the 2015 LTIP. As of June 30, 2022, we had 1.9 million shares remaining available for issuance under the 2015 LTIP. Share-based compensation expense is included in selling, general, and administrative expense. The income tax effect associated with share-based compensation awards is included in income tax expense. The following table presents share-based compensation amounts recognized in our condensed consolidated statements of operations, in thousands: | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | 2022 | | 2021 | | 2022 | | 2021 | Share-based compensation expense | | $ | 3,334 | | $ | 2,266 | | $ | 7,061 | | $ | 5,377 | Income tax (expense) benefit | | $ | (32) | | $ | 228 | | $ | 1,573 | | $ | 3,320 |
The following table presents a summary of our share-based compensation activity for the three months ended June 30, 2022, in thousands, except per share amounts: | | | | | | | | | | | | | | | | | | | RSAs | | Stock Options | | | Number of Shares | | Weighted Average Grant Date Fair Value Per Share | | Number of Shares | | Weighted Average Grant Date Fair Value Per Share | | Weighted Average Exercise Price Per Share | | Aggregate
Intrinsic
Value | Balance December 31, 2021 | | 244.4 | | $ | 119.41 | | 210.5 | | $ | 32.35 | | $ | 87.30 | | $ | 39,692.4 | Granted | | 105.5 | | $ | 181.82 | | — | | $ | — | | $ | — | | | — | Converted/Exercised | | (166.8) | | $ | 75.10 | | (18.1) | | $ | 27.85 | | $ | 80.14 | | $ | 2,282.9 | Forfeited/Expired | | (9.3) | | $ | 222.20 | | (3.1) | | $ | 68.81 | | $ | 174.76 | | | — | Balance June 30, 2022 | | 173.8 | | $ | 194.70 | | 189.3 | | $ | 32.19 | | $ | 86.57 | | $ | 16,311.0 | | | | | | | | | | | | | | | | | | Exercisable June 30, 2022 (a) | | | | | 155.5 | | $ | 25.82 | | $ | 70.45 | | $ | 15,391.1 |
| (a) | The weighted average remaining contractual term for vested stock options is approximately 5.8 years. |
Unrecognized share-based compensation expense related to unvested awards is shown in the following table, dollars in thousands: | | | | | | | | | As of June 30, 2022 | | | Unrecognized Compensation Expense
on Unvested Awards | | Weighted Average
Remaining
Vesting Period | RSAs | | $ | 17,630 | | | 1.6 | Stock options | | | 826 | | | 0.8 | Total unrecognized compensation expense related to unvested awards | | $ | 18,456 | | | |
Our RSAs with performance-based conditions are evaluated on a quarterly basis with adjustments to compensation expense based on the likelihood of the performance target being achieved or exceeded. The following table shows the range of payouts and the related expense for our outstanding RSAs with performance-based conditions, in thousands: | | | | | | | | | | | | | | | | | | | | | Payout Ranges and Related Expense | RSAs with Performance-Based Conditions | | Grant Date Fair Value | | 0% | | 25% | | 100% | | 200% | February 17, 2020 | | $ | 2,535 | | $ | 0 | | $ | 634 | | $ | 2,535 | | $ | 5,070 | February 16, 2021 | | $ | 2,404 | | $ | 0 | | $ | 601 | | $ | 2,404 | | $ | 4,808 | February 15, 2022 | | $ | 3,464 | | $ | 0 | | $ | 866 | | $ | 3,464 | | $ | 6,928 |
During the first quarter of 2022, RSAs with performance-based conditions that were granted on February 18, 2019 vested based on cumulative three-year achievement of 200%. Total compensation expense recognized over the three-year performance period, net of forfeitures, was $4.4 million. The fair value of our RSAs with a market-based condition granted under the 2015 LTIP was determined using a Monte Carlo simulation. The following are key inputs in the Monte Carlo analysis for awards granted in 2022 and 2021: | | | | | | | | | | | 2022 | | | 2021 | | Measurement period (years) | | | 2.87 | | | | 2.87 | | Risk free interest rate | | | 1.76 | % | | | 0.22 | % | Dividend yield | | | 0.00 | % | | | 0.00 | % | Estimated fair value of market-based RSAs at grant date | | $ | 298.20 | | | $ | 298.66 | |
The fair values of stock options granted under the 2015 LTIP were calculated using the Black-Scholes Options Pricing Model. The following table presents the assumptions used to estimate the fair values of stock options granted in 2021. There were no stock options issued in the first six months of 2022. | | | | | | | 2021 | | Risk free interest rate | | | 0.76 | % | Expected volatility, using historical return volatility and implied volatility | | | 43.29 | % | Expected life (in years) | | | 6.0 | | Dividend yield | | | 0.00 | % | Estimated fair value of stock options at grant date | | $ | 89.59 | |
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