On June 28, 2018 (and as amended and restated on March 10, 2020), in connection with the IPO, the Company’s Board of Directors adopted, and its stockholders approved, the BrightView Holdings, Inc. 2018 Omnibus Incentive Plan (the “2018 Omnibus Incentive Plan”). The 2018 Omnibus Incentive Plan provides that the total number of shares of common stock that may be issued under the plan is 18,650,000. Under the plan, the Company may grant stock options, stock appreciation rights, restricted stock, other equity-based awards and other cash-based awards to employees, directors, officers, consultants and advisors.

A summary of the Company’s restricted stock award activity for the year ended September 30, 2022 is presented in the following table:


	Shares		Weighted-Avg Distribution Price per Share
Outstanding at September 30, 2021		802,000	$	14.31
Less: Redeemed		235,000	$	14.10
Less: Forfeited		26,000	$	14.31
Outstanding at September 30, 2022		541,000	$	14.40

A summary of the Company’s restricted stock unit activity for the year ended September 30, 2022 is presented in the following table:


	Shares		Weighted-Avg Distribution Price per Share
Outstanding at September 30, 2021		1,299,000	$	15.14
Granted		1,613,000	$	11.85
Less: Vested		428,000	$	15.33
Less: Forfeited		199,000	$	15.34
Outstanding at September 30, 2022		2,285,000	$	12.73

During the year ended September 30, 2022, the Company issued 1,613,000 restricted stock units (“RSUs”) at a weighted average grant date fair value of $11.85 per share, all of which are subject to vesting. The majority of these units vest ratably over a four-year period commencing on the grant date. Non-cash equity-based compensation expense associated with the new grants will total approximately $16.3 over the requisite service period. During the year ended September 30, 2022, 428,000 RSUs vested and 199,000 RSUs were forfeited.

A summary of the Company’s stock option activity for the year ended September 30, 2022 is presented in the following table:


	Shares		Weighted-Avg Purchase Price per Share
Outstanding at September 30, 2021		7,017,000	$	21.55
Granted		783,000	$	15.04
Less: Exercised		1,000	$	13.49
Less: Forfeited		310,000	$	18.04
Outstanding at September 30, 2022		7,489,000	$	19.07
Vested and exercisable at September 30, 2022		4,284,000	$	20.12
Expected to vest after September 30, 2022		3,205,000	$	17.67

On November 18 2021, the Company issued 783,000 stock options at a weighted average exercise price of $15.04 per share and a weighted average grant date fair value of $6.84 per share, the majority of which vest and become exercisable ratably over a four-year period commencing on the grant date. Non-cash equity-based compensation expense associated with the grant will be approximately $4.7 over the requisite service period. During the year ended September 30, 2022, 1,000 options were exercised and 310,000 options were forfeited.

A summary of the Company’s performance stock unit activity for the year ended September 30, 2022 is presented in the following table:


	Shares		Weighted-Avg Distribution Price per Share
Outstanding at September 30, 2021		—		—
Granted		403,000	$	12.41
Less: Vested		—		—
Less: Forfeited		—		—
Outstanding at September 30, 2022		403,000	$	12.41

On May 17, 2022, the Company issued 403,000 performance stock units (“PSUs”) at a weighted average distribution price of $12.41 per share and a weighted average grant date fair value of $16.51 per share, which hold a service period of forty months and cliff vest at the end of the service period. Non-cash equity-based compensation expense associated with the grant will be approximately $6.7 over the requisite service period. During the year ended September 30, 2022, no PSUs vested or were forfeited.

The fair value of each restricted stock award, RSU, or PSU granted under the Plan and the 2018 Omnibus Incentive Plan was estimated on the date of grant in accordance with the fair value provisions in ASC 718. The fair value of the RSU awards and stock option awards granted were estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The Company chose the Black-Scholes-Merton model based on its experience with the model and the determination that the model could be used to provide a reasonable estimate of the fair value of awards with terms such as those discussed above. The fair value of the RSU awards and stock option awards are calculated based on a combination of the income and market multiple approaches. Under the income approach, specifically the discounted cash flow method, forecast cash flows are discounted to the present value at a risk-adjusted discount rate. The valuation analyses determine discrete free cash flows over several years based on the forecast financial information provided by management and a terminal value for the residual period beyond the discrete forecast, which are discounted at the appropriate rate to estimate the Company’s enterprise value.

For PSU awards subject to a market condition, the metric is the Company’s total shareholder return during the performance period relative to a pre-defined set of industry peer companies. The fair value of these awards is estimated using a Monte Carlo simulation. For PSU awards subject to a performance condition, the metrics are the Company's compound annual growth rates of revenue and adjusted earnings per share. The fair value of these awards is determined based on the trading price of the company’s common shares on the date of grant.

The weighted-average assumptions used in the valuation of RSU awards, restricted stock into which such awards were converted, PSU awards and stock option awards granted or modified for the years ended September 30, 2022, September 30, 2021 and September 30, 2020 are presented in the table below:


	Fiscal Year Ended
	September 30, 2022			September 30, 2021			September 30, 2020
Assumptions:
Risk-free interest rate		1.88	%		0.49	%		1.56	%
Dividend yield		—			—			—
Volatility factor		47.10	%		54.40	%		43.51	%
Expected term (in years)		5.3			6.4			6.3

The Company recognizes equity-based compensation expense using the estimated fair value as of the grant date over the requisite service or performance period applicable to the grant. Estimates of future forfeitures are made at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company recognized $18.9, $19.7 and $23.6 in equity-based compensation expense for the years ended September 30, 2022, September 30, 2021 and September 30, 2020, respectively, included in Selling, general and administrative expense in the accompanying Consolidated Statements of Operations. The resulting charge increased Additional paid in capital by the same amount. Total unrecognized compensation cost was $36.2, $25.6 and $36.2 as of September 30, 2022, September 30, 2021 and September 30, 2020, respectively, which is expected to be recognized over a weighted average period of 1.3 years.

The Company’s Stockholders have approved the Company’s 2018 Employee Stock Purchase Plan, (the “ESPP”). A total of 1,100,000 shares of the Company’s common stock were made available for sale under the Company’s 2018 Employee Stock Purchase Plan on October 22, 2018, of which 112,000, 120,000 and 172,000 were issued on November 15, 2021, November 14, 2020 and November 14, 2019, respectively. An additional portion thereof is expected to be issued in November 2022.