Prior to the consummation of the holding company reorganization discussed in Note 1 - Presentation of Financial Statements and Significant Accounting Policies, the Company maintained stock-based two equity incentive plans, which inlcude stock options and restricted stock. In 2023, pursuant to the holding company reorganization, each outstanding share of HHC's common stock was automatically converted into one share of HHH common stock. HHH assumed all obligations under the equity incentive plans. All stock options and restricted stock outstanding will be settled in HHH stock.

In May 2020, the Company’s shareholders approved The Howard Hughes Corporation 2020 Equity Incentive Plan (the 2020 Equity Plan). Pursuant to the 2020 Equity Plan, 1,350,000 shares of common stock were reserved for issuance. The 2020 Equity Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards (collectively, the Awards). Employees, directors, and consultants of the Company are eligible for Awards. The 2020 Equity Incentive Plan is administered by the Compensation Committee of the HHH Board of Directors (Compensation Committee).

Prior to the adoption of the 2020 Equity Plan, equity awards were issued under The Howard Hughes Corporation Amended and Restated 2010 Equity Incentive Plan (the 2010 Equity Plan). The adoption of the 2020 Equity Plan did not impact the administration of Awards issued under the 2010 Equity Plan but following adoption of the 2020 Equity Plan, equity awards will no longer be granted under the 2010 Equity Plan.

The following summarizes stock-based compensation expense, net of amounts capitalized to development projects, for the years ended December 31:


thousands	2023		2022		2021
Stock Options (a)	$	336	$	250	$	227
Restricted Stock (b)	10,847		6,860		7,332
Pre-tax stock-based compensation expense	$	11,183	$	7,110	$	7,559
Income tax benefit	$	882	$	636	$	882

(b)Amounts shown are net of $4.6 million capitalized to development projects in 2023, $4.8 million capitalized to development projects in 2022, and $2.2 million capitalized to development projects in 2021.

Stock Options There were no grants or exercises of stock options in 2023. The following table summarizes stock option activity:


	Stock Options	Weighted-average Exercise Price		Weighted-average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Stock options outstanding at December 31, 2022	258,987	$	110.20


Forfeited	(8,000)	106.83
Expired	(116,650)	112.09
Stock options outstanding at December 31, 2023	134,337	$	108.76	4.4	$	663,915

Stock options vested and expected to vest at December 31, 2023	133,096	$	109.08	4.4	$	647,298
Stock options exercisable at December 31, 2023	79,500	$	131.19	2.4	$	—

The total intrinsic value of stock options exercised was $0.1 million during 2022 and $2.6 million during 2021, based on the difference between the market price at the exercise date and the exercise price. Cash received from stock option exercises was $0.3 million in 2022 and $4.1 million in 2021. The tax benefit from these exercises was immaterial.

The fair value of stock option awards is determined using the Black-Scholes option-pricing model with the following assumptions:

The fair value on the grant date and the significant assumptions used in the Black‑Scholes option‑pricing model are as follows:


	2022			2021
Weighted-average grant date fair value	$	37.70		$	41.52
Assumptions
Expected life of options (in years)	7.5			7.5
Risk-free interest rate	3.4		%	1.2		%
Expected volatility	50.3		%	36.5		%
Expected annual dividend per share	—			—

Generally, options granted vest over requisite service periods, expire ten years after the grant date and generally do not become exercisable until their restrictions on exercise lapse after the five-year anniversary of the grant date.

The balance of unamortized stock option expense as of December 31, 2023, is $0.9 million, which is expected to be recognized over a weighted‑average period of 2.6 years.

Restricted Stock Restricted stock awards issued under the 2020 Equity Plan provide that shares awarded may not be sold or otherwise transferred until restrictions have lapsed as established by the Compensation Committee. Restricted stock awards are granted to certain members of management as well as to HHH’s non‑employee directors as part of their annual retainer. The management awards generally vest over a range of three to five years, and non‑employee director awards generally vest in approximately one year.


	Restricted Stock	Weighted-average Grant Date Fair Value
Restricted stock outstanding at December 31, 2022	353,463	$	75.14
Granted	267,820	83.85
Vested	(119,744)	84.42
Forfeited	(107,841)	68.92
Restricted stock outstanding at December 31, 2023	393,698	$	79.94

The grant date fair value of restricted stock is based on the closing price of HHH common stock at grant date. For restricted stock awards that vest based on shareholder returns, the grant date fair value is calculated using a Monte-Carlo approach which simulates HHH’s stock price on the corresponding vesting dates and is reflected at the target level of performance. For restricted stock awards that vest based on net asset value per share, the grant date fair value is calculated using a Monte-Carlo approach which simulates HHH’s net asset value on the vesting date and is reflected at the target level of performance.

The weighted-average grant-date fair value per share of restricted stock granted was $88.19 during 2022 and $83.91 during 2021. The fair value of restricted stock that vested was $9.6 million during 2023, $8.0 million during 2022, and $6.9 million during 2021, based on the HHH market price at the vesting date.

The balance of HHC’s unamortized restricted stock expense as of December 31, 2023, was $20.6 million, which is expected to be recognized over a weighted‑average period of 1.9 years.