The Company issues stock-based awards, including stock options, restricted stock and restricted stock units, to certain officers, employees and non-employee directors under the Acadia Healthcare Company, Inc. Incentive Compensation Plan (the “Equity Incentive Plan”). At March 31, 2020, a maximum of 8,200,000 shares of the Company’s common stock were authorized for issuance as stock options, restricted stock and restricted stock units or other share-based compensation under the Equity Incentive Plan, of

which 1,024,052 were available for future grant. Stock options may be granted for terms of up to ten years. The Company recognizes expense on all share-based awards on a straight-line basis over the requisite service period of the entire award. Grants to employees generally vest in annual increments of 25% each year, commencing one year after the date of grant. The exercise prices of stock options are equal to the most recent closing price of the Company’s common stock on the most recent trading date prior to the date of grant.

The Company recognized $5.0 million and $6.1 million in equity-based compensation expense for the three months ended March 31, 2020 and 2019, respectively. At March 31, 2020, there was $50.8 million of unrecognized compensation expense related to unvested options, restricted stock and restricted stock units, which is expected to be recognized over the remaining weighted average vesting period of 1.5 years.

At March 31, 2020, there were no warrants outstanding and exercisable. The Company recognized a deferred income tax benefit of $1.3 million and $1.6 million for the three months ended March 31, 2020 and 2019, respectively, related to equity-based compensation expense.

Stock option activity during 2019 and 2020 was as follows (aggregate intrinsic value in thousands):

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2019		1,199,540		$	44.64		7.26	$	2,717
Options granted		605,200			28.50		9.21		1,343
Options exercised		(55,671	)		19.05	N/A			658
Options cancelled		(389,001	)		40.84	N/A		N/A
Options outstanding at December 31, 2019		1,360,068			39.40		7.57		1,650
Options granted		443,200			33.72		9.91		—
Options exercised		—			—	N/A			—
Options cancelled		(105,462	)		41.00	N/A		N/A
Options outstanding at March 31, 2020		1,697,806		$	37.81		7.97	$	659
Options exercisable at December 31, 2019		513,290		$	48.08		5.88	$	512
Options exercisable at March 31, 2020		702,956		$	44.08		6.36	$	479

Fair values are estimated using the Black-Scholes option pricing model. The following table summarizes the grant-date fair value of options and the assumptions used to develop the fair value estimates for options granted during the three months ended March 31, 2020 and year ended December 31, 2019:

	March 31, 2020			December 31, 2019
Weighted average grant-date fair value of options	$	12.29		$	17.59
Risk-free interest rate		1.6	%		2.4	%
Expected volatility		39	%		38	%
Expected life (in years)		5.0			5.0

The Company’s estimate of expected volatility for stock options is based upon the volatility of our stock price over the expected life of the award. The risk-free interest rate is the approximate yield on U.S. Treasury Strips having a life equal to the expected option life on the date of grant. The expected life is an estimate of the number of years an option will be held before it is exercised.

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2019		805,057		$	42.40
Granted		700,937			28.77
Cancelled		(389,684	)		33.50
Vested		(311,174	)		44.23
Unvested at December 31, 2019		805,136		$	34.14
Granted		511,006			25.37
Cancelled		(57,782	)		35.55
Vested		(160,398	)		36.73
Unvested at March 31, 2020		1,097,962		$	29.61

	Number of Units			Weighted Average Grant-Date Fair Value
Unvested at January 1, 2019		484,111		$	44.52
Granted		234,408			34.54
Cancelled		(271,162	)		45.17
Vested		—			—
Unvested at December 31, 2019		447,357		$	38.89
Granted		583,680			10.60
Cancelled		(10,123	)		42.09
Vested		(12,691	)		42.09
Unvested at March 31, 2020		1,008,223		$	22.44

Restricted stock awards are time-based vesting awards that vest over a period of three or four years and are subject to continuing service of the employee or non-employee director over the ratable vesting periods. The fair values of the restricted stock awards were determined based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date.

Restricted stock units are granted to employees and are subject to Company performance compared to pre-established targets and Company performance compared to peers. In addition to Company performance, these performance-based restricted stock units are subject to the continuing service of the employee during the two- or three-year period covered by the awards. The performance condition for the restricted stock units is based on the Company’s achievement of annually established targets for diluted earnings per share. Additionally, the number of shares issuable pursuant to restricted stock units granted during 2020 and 2019 are subject to adjustment based on the Company’s three-year annualized total stockholder return relative to a peer group consisting of S&P 1500 companies within the Healthcare Providers & Services 6 digit GICS industry group and selected other companies deemed to be peers. The number of shares issuable at the end of the applicable vesting period of restricted stock units ranges from 0% to 200% of the targeted units based on the Company’s actual performance compared to the targets and, for 2020 and 2019 awards, performance compared to peers.

The fair values of restricted stock units were determined based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date for units subject to performance conditions, or at its Monte-Carlo simulation value for units subject to market conditions.