The Company grants stock-based awards to attract, retain and motivate key employees and directors.

The 2020 Omnibus Incentive Compensation Plan (“2020 Plan”), provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and performance-based or other equity-related awards to the Company’s employees and directors. The maximum aggregate number of shares that may be issued under the 2020 Plan is 15,852,319 shares with 2,639,181 shares remaining in the reserve. The total aggregate number of shares may be adjusted as determined by the Board of Directors.

Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was $5.6 million and $4.9 million, respectively, and for the six months ended March 31, 2023 and 2022 was $9.6 million and $8.9 million, respectively, recognized in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Income. Total income tax benefit for the three months ended March 31, 2023 and 2022 was $1.1 million and $1.1 million, respectively, and for the six months ended March 31, 2023 and 2022 was $1.8 million and $1.9 million, respectively. As of March 31, 2023, the Company had not yet recognized compensation cost on unvested stock-based awards of $35.1 million, with a weighted average remaining recognition period of 1.9 years.

The Company uses the Black Scholes pricing model to estimate the fair value of its service-based awards as of the grant date. Under the terms of the 2020 Plan, all stock options will expire if not exercised within ten years of the grant date.

The following table sets forth the significant assumptions used for the calculation of stock-based compensation expense for the six months ended March 31, 2023 and 2022:


	December 12, 2022 Grant Date			November 19, 2021 Grant Date
Risk-free interest rate		3.77	%		1.34	%
Expected volatility		40.00	%		40.00	%
Expected term (in years)		6.00			6.00
Expected dividend yield		0.00	%		0.00	%

The following table summarizes the performance-based stock option activity for the six months ended March 31, 2023:


	Number of Shares				Weighted Average Exercise Price Per Share		Weighted Average Remaining Contract Term		Aggregate Intrinsic Value
							(in years)		(in thousands)
Outstanding at October 1, 2022		1,410,653		$		23.00
Granted		—				—
Exercised		(68,980	)			23.00
Cancelled/Forfeited		(2,174	)			23.00
Outstanding at March 31, 2023		1,339,499				23.00		7.2		723
Vested and exercisable at March 31, 2023		1,339,499		$		23.00		7.2		723

The following table summarizes the service-based stock option activity for the six months ended March 31, 2023:


	Number of Shares				Weighted Average Exercise Price Per Share		Weighted Average Remaining Contract Term		Aggregate Intrinsic Value
							(in years)		(in thousands)
Outstanding at October 1, 2022		3,557,194		$		25.57
Granted		250,477				20.18
Exercised		(78,383	)			23.00
Cancelled/Forfeited		(42,786	)			23.00
Outstanding at March 31, 2023		3,686,502				25.28		7.5		2,438
Vested and exercisable at March 31, 2023		2,239,133		$		24.55		7.3		1,092

A summary of the service-based restricted stock awards activity during the six months ended March 31, 2023 was as follows:


	Number of Shares				Weighted Average Grant Date Fair Value

Outstanding and unvested at October 1, 2022		275,628		$		23.00
Granted		—				—
Vested		(114,093	)			23.00
Forfeited		(18,328	)			23.00
Outstanding and unvested at March 31, 2023		143,207		$		23.00

Performance restricted stock units were granted to officers and certain employees of the Company and represent the right to earn shares of Company common stock based on the achievement of company-wide non-GAAP performance conditions, including cumulative net sales, average return on net tangible assets and cumulative EBITDA during the three-year performance period. Compensation cost is amortized into expense over the performance period, which is generally three years, and is based on the probability of meeting performance targets. The fair value of each performance share award is based on the closing stock price on the date of grant.

A summary of the performance-based restricted stock unit awards activity for the six months ended March 31, 2023 presented at target was as follows:


	Number of Shares				Weighted Average Grant Date Fair Value

Outstanding and unvested at October 1, 2022		221,469		$		37.51
Granted		319,263				20.18
Vested		—				—
Forfeited		(11,463	)			33.29
Outstanding and unvested at March 31, 2023		529,269		$		27.15

A summary of the service-based restricted stock unit awards activity for the six months ended March 31, 2023 was as follows:


	Number of Shares				Weighted Average Grant Date Fair Value

Outstanding and unvested at October 1, 2022		574,499		$		31.14
Granted		474,140				20.52
Vested		(110,635	)			35.13
Forfeited		(21,233	)			30.47
Outstanding and unvested at March 31, 2023		916,771		$		25.18