The Company has shares available for grant under the Amended and Restated 2014 Beazer Homes USA, Inc. Long-Term Incentive Plan. We issue new shares upon the exercise of stock options and the grant of restricted stock awards. In cases of forfeitures and cancellations, those shares are returned to the share pool for future issuance. As of September 30, 2022, we had 1.5 million shares of common stock for issuance under our various equity incentive plans, of which 1.5 million shares are available for future grants.

Stock-based compensation expense is included in general and administrative expenses in our consolidated statements of operations. The following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the fiscal years ended 2022, 2021 and 2020, respectively.

Stock options have an exercise price equal to the fair market value of the common stock on the grant date, generally vest two or three years after the date of grant, and may be exercised thereafter until their expiration, subject to forfeiture upon termination of employment as provided in the applicable plan. Under certain conditions of retirement, eligible participants may receive a partial vesting of stock options. Stock options generally expire on the eighth anniversary from the date such options were granted, depending on the terms of the award.

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model (Black-Scholes Model). As of September 30, 2022, the intrinsic value of our stock options outstanding and vested and exercisable were less than $0.1 million and less than $0.1 million, respectively. As of both September 30, 2022 and 2021, there was less than $0.1 million of total unrecognized compensation cost related to unvested stock options. The cost remaining as of September 30, 2022 is expected to be recognized over a weighted-average period of 1.4 years.

During fiscal 2018, the Compensation Committee of our Board of Directors approved the Employee Stock Option Program (ESOP). This program is available to all full-time employees and is designed to enable employees to share in potential price appreciation of the Company's stock. The ESOP matches stock purchases made by eligible employees meeting certain conditions with an option to purchase an additional share of the Company's shares on a one-to-one basis. The exercise price of the options granted is equal to the closing price of the Company's stock on the day the underlying shares are purchased by the employee, which is also the ESOP grant date. The options will vest on the second anniversary of the date of grant but are forfeited if (1) the eligible employee no longer works for the Company or (2) the underlying shares are sold before the two-year vesting period is over. The total number of options available under the ESOP is limited to 100,000, each for one share of the Company's common stock, of which 31,968 options were granted through the end of fiscal 2022.

During the year ended September 30, 2022, we issued 236 stock options, all were issued under the ESOP. No stock options were issued during the year ended September 30, 2021, and 950 stock options were issued during the year ended September 30, 2020. We used the following valuation assumptions for stock options granted for the periods presented:


	Fiscal Year Ended September 30,
	2022			2020
Expected life of options	5.7 years			5.7 years
Expected volatility	55.02		%	51.52		%
Expected dividends	—			—
Weighted-average risk-free interest rate	1.88		%	0.43		%
Weighted-average fair value	$	8.54		$	4.99

We relied upon a combination of the observed exercise behavior of our prior grants with similar characteristics, the vesting schedule of the current grants, and an index of peer companies with similar grant characteristics to determine the expected life of the options granted. We considered historic returns of our stock and the implied volatility of our publicly-traded options in determining expected volatility. We assumed no dividends would be paid since our Board of Directors has suspended payment of dividends indefinitely and payment of dividends is restricted under our Senior Notes covenants. The risk-free interest rate is based on the term structure of interest rates at the time of the option grant.


	2022			2021			2020
	Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price
Outstanding at beginning of period	114,259	$	17.89	392,465	$	15.47	523,754	$	14.34
Granted	236	16.58		—	—		950	10.67
Exercised	(988)	11.32		(278,206)	14.48		(128,921)	11.01
Expired	(86,000)	19.11		—	—		—	—

Forfeited	—	—		—	—		(3,318)	9.55
Outstanding at end of period	27,507	$	14.31	114,259	$	17.89	392,465	$	15.47
Exercisable at end of period	27,271	$	14.29	113,309	$	17.95	354,796	$	15.90

The fair value of each restricted stock award with market conditions is estimated on the date of grant using the Monte Carlo valuation method. The fair value of restricted stock awards without market conditions is based on the market price of the Company's common stock on the date of grant. If applicable, the cash-settled component of any awards granted to employees is accounted for as a liability, which is adjusted to fair value each reporting period until vested.

Compensation cost arising from restricted stock awards granted to employees is recognized as an expense using the straight-line method over the vesting period. As of September 30, 2022 and 2021, there was $7.3 million and $7.2 million, respectively, of total unrecognized compensation cost related to unvested restricted stock awards. The cost remaining as of September 30, 2022 is expected to be recognized over a weighted-average period of 1.7 years.

During the year ended September 30, 2022, we issued 91,858 shares of performance-based restricted stock (2022 Performance Shares), containing market conditions, to our executive officers and certain other employees. The 2022 Performance Shares are structured to be awarded based on the Company's performance under three pre-determined financial and operational metrics at the end of the three-year performance period. After determining the number of shares earned based on the financial and operational metrics, which can range from 0% to 175% of the targeted number of shares, the award will be subject to further upward or downward adjustment by as much as 20% based on the Company's relative total shareholder return (TSR) compared against a selected small to mid-cap homebuilder peers during the three-year performance period. The 2022 Performance Shares were valued using the Monte Carlo valuation model due to the existence of the TSR market condition and had an estimated fair value of $23.36 per share on the date of grant.


	Fiscal Year Ended September 30,
	2022		2021		2020
Expected volatility range	41.0% - 89.0%		26.1% - 67.0%		21.2% - 54.8%
Risk-free interest rate	0.81	%	0.23	%	1.61	%
Dividend yield	—		—		—
Grant-date stock price range	$21.40 - $142.99		$14.07 - $4,318.03		$15.62 - $3,595.17

Each of our performance shares represent a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Compensation Committee. In November 2019, we cash settled 135,337 shares earned above target level based on the performance level achieved under our 2017 performance-based award plan. The cash payment totaled $2.1 million, which was reflected as a reduction to paid-in capital in the accompanying consolidated statements of stockholders' equity. We have not cash settled any such performance-based awards prior to or subsequent to the November 2019 transaction, and we have no current plans to cash settle any additional performance-based restricted shares in the future.

The performance criteria of the 2020 Performance Share grant were satisfied as of September 30, 2022. Based on the actual performance level achieved, 334,736 performance-based restricted stock awards from the 2020 Performance Share grant cliff vested at the end of the three-year vesting period on November 15, 2022. Of the total $7.0 million compensation cost related to these awards, we have recognized $2.1 million, $3.3 million and $1.3 million during the fiscal years ended September 30, 2022, 2021 and 2020, respectively. The remaining $0.3 million of unrecognized compensation cost will be recognized in the first quarter of fiscal 2023.

During the year ended September 30, 2022, we also issued 246,844 shares of time-based restricted stock (Restricted Shares) to our directors, executive officers, and certain other employees. Restricted Shares are valued based on the market price of the Company's common stock on the date of the grant. The Restricted Shares granted to our non-employee directors vest on the first anniversary of the grant, while the Restricted Shares granted to our executive officers and other employees generally vest ratably over three years from the date of grant.


	Year Ended September 30, 2022
	Performance-Based(a)			Time-Based			Total
	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Beginning of period	738,155	$	13.45	486,574	$	13.79	1,224,729	$	13.59
Granted	269,617	18.98		246,844	21.40		516,461	20.14
Vested	(552,417)	10.50		(286,182)	13.21		(838,599)	11.42
Forfeited	(19,209)	17.27		(35,194)	16.49		(54,403)	16.77
End of period	436,146	$	17.76	412,042	$	18.52	848,188	$	18.13

(a) Grant and vesting activity during the year ended September 30, 2022 include 177,759 shares that were issued above target based on performance level achieved under performance-based restricted stock vesting in the current period.


	Year Ended September 30, 2021
	Performance-Based(a)			Time-Based			Total
	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Beginning of period	796,024	$	14.71	610,130	$	13.85	1,406,154	$	14.34
Granted	164,296	17.90		251,788	14.21		416,084	15.67
Vested	(222,165)	22.40		(346,856)	14.36		(569,021)	17.50
Forfeited	—	—		(28,488)	11.77		(28,488)	11.77
End of period	738,155	$	13.45	486,574	$	13.79	1,224,729	$	13.59

(a) Grant and vesting activity during the year ended September 30, 2021 include 60,930 shares that were issued above target based on performance level achieved under performance-based restricted stock vesting in the current period.


	Year Ended September 30, 2020
	Performance-Based			Time-Based			Total
	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Beginning of period	778,814	$	13.60	611,607	$	12.11	1,390,421	$	16.53
Granted	260,131	16.98		327,571	15.29		587,702	16.04
Vested	(242,921)	13.60		(302,255)	11.89		(545,176)	12.65
Forfeited	—	—		(26,793)	13.79		(26,793)	13.79
End of period	796,024	$	14.71	610,130	$	13.85	1,406,154	$	14.34