NOTE 12. EQUITY-BASED COMPENSATION

As of September 30, 2018, we had three shareholder approved stock incentive plans under which performance shares, restricted stock units (RSUs) and deferred compensation stock equivalent units were outstanding. We were originally authorized to issue up to 1.6 million shares and 1.0 million shares under our 2005 Stock Incentive Plan and 2014 Stock Incentive Plan, respectively. At September 30, 2018, approximately 0.4 million shares were authorized for future use under those plans. Upon closing of the merger with Deltic, we assumed Deltic’s stockholder-approved 2002 Incentive Plan and reserved 0.25 million shares for issuance under the plan. We issue new shares of common stock to settle performance shares, restricted stock units and deferred compensation stock equivalent units.

The following table details equity-based compensation expense and the related income tax benefit:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2018		2017		2018		2017
Employee equity-based compensation expense:
Performance shares	$	1,074	$	905	$	3,084	$	2,678
Restricted stock units		536		283		1,470		858
Accelerated share-based termination benefits in connection with the merger		3		—		1,767		—
Total employee equity-based compensation expense	$	1,613	$	1,188	$	6,321	$	3,536

Deferred compensation stock equivalent units expense	$	16	$	166	$	197	$	488

Total tax benefit recognized for share-based expense	$	74	$	95	$	258	$	284

Employee equity-based compensation expense includes restricted stock unit awards issued to directors.

PERFORMANCE SHARES

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards in 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017
Stock price as of valuation date	$	54.00		$	43.60
Risk-free rate		2.46	%		1.61	%
Expected volatility		23.74	%		24.22	%
Expected dividends		2.96	%		3.44	%
Expected term (years)		3.00			3.00
Fair value	$	75.37		$	53.85

The following table summarizes outstanding performance share awards as of September 30, 2018 and changes during the nine months ended September 30, 2018:

(Dollars in thousands, except grant date fair value)	Shares			Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at December 31, 2017		200,631		$	39.19
Granted		67,747		$	75.37
Forfeited		(5,082	)	$	47.90
Unvested shares outstanding at September 30, 2018		263,296		$	48.33	$	10,782

As of September 30, 2018, there was $5.8 million of unrecognized compensation cost related to unvested performance share awards, which is expected to be recognized over a weighted-average period of 1.0 years.

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of September 30, 2018 and changes during the nine months ended September 30, 2018:

(Dollars in thousands, except grant date fair value)	Shares			Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at December 31, 2017		67,871		$	32.87
Granted		43,693		$	51.54
Vested		(1,000	)	$	42.92
Forfeited		(3,694	)	$	45.36
Unvested shares outstanding at September 30, 2018		106,870		$	39.98	$	4,376

The fair value of each RSU equaled our common share price on the date of grant. As of September 30, 2018, there was $2.0 million of total unrecognized compensation cost related to unvested RSU awards, which is expected to be recognized over a weighted-average period of 1.0 years.

DEFERRED COMPENSATION STOCK EQUIVALENT UNITS

Through December 31, 2017, a long-term incentive award was granted annually to our directors and payable upon a director's separation from service. Effective May 2018, directors received restricted stock unit awards that may be deferred. Directors may also elect to defer their quarterly retainers, which may be payable in the form of stock. All stock unit equivalent accounts are credited with dividend equivalents. As of September 30, 2018, there were 146,502 shares outstanding that will be distributed in the future to directors as common stock.

Issuance of restricted stock units awarded to certain officers and select employees may also be deferred. All stock unit equivalent accounts are credited with dividend equivalents. As of September 30, 2018, there were 74,989 RSUs which had vested, but issuance of the related stock had been deferred.

REPLACEMENT RESTRICTED STOCK UNIT AWARDS

The replacement RSUs issued as a result of the merger with Deltic have four-year vesting terms. During the vesting period, the grantee may vote and receive dividends on the shares, but the shares are subject to transfer restrictions and are all, or partially, forfeited if a grantee terminates employment. Expense for replacement RSUs will continue to be recognized over the remaining service period unless a qualifying termination occurs. A qualifying termination of an awardee will result in acceleration of vesting and expense recognition in the period that the qualifying termination occurs. Qualifying terminations during the nine months ended September 30, 2018 resulted in accelerated vesting of approximately 35,000 replacement RSUs and recognition of $1.8 million of expense. This accelerated expense recognition is included in merger-related integration costs as described in Note 13: Merger, Integration and other Costs.