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Share-based Compensation Plans: | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
Share-based Compensation Plans | SHARE-BASED COMPENSATION PLANS Our 2015 Omnibus Incentive Plan allows for the granting of stock, restricted stock, restricted stock units, stock options, performance shares and performance share units. We had 416,325 shares available to grant at December 31, 2021. Compensation expense is determined using the grant date fair value estimated in accordance with the provisions of accounting standards for stock compensation and is recognized over the vesting periods of the individual awards. As of December 31, 2021, total unrecognized compensation expense related to non-vested stock awards was approximately $14 million and is expected to be recognized over a weighted-average period of two years. Stock-based compensation expense, which is included in Operations and maintenance on the accompanying Consolidated Statements of Income, was as follows for the years ended December 31 (in thousands):
| 2021 | 2020 | 2019
Stock-based compensation expense | $ | 9,655 |  | $ | 5,373 |  | $ | 12,095 |
Restricted Stock The fair value of restricted stock and restricted stock unit awards equals the market price of our stock on the date of grant. The shares carry a restriction on the ability to sell the shares until the shares vest. The shares substantially vest over three years, contingent on continued employment. Compensation expense related to the awards is recognized over the vesting period. A summary of the status of the restricted stock and restricted stock units at December 31, 2021, was as follows:
| Restricted Stock | Weighted-Average Grant Date Fair Value
| (in thousands) |
Balance at January 1, 2021 | 196 |  | $ | 69.05 |
Granted | 118 |  | 65.64 |
Vested | (83) |  | 67.85 |
Forfeited | (12) |  | 69.59 |
Balance at December 31, 2021 | 219 |  | $ | 67.64 |
The weighted-average grant-date fair value of restricted stock granted and the total fair value of shares vested during the years ended December 31, were as follows:
| Weighted-Average Grant Date Fair Value | Total Fair Value of Shares Vested
|  | (in thousands)
2021 | $ | 65.64 |  | $ | 5,400 |
2020 | $ | 69.49 |  | $ | 6,722 |
2019 | $ | 73.66 |  | $ | 8,438 |
As of December 31, 2021, there was $11 million of unrecognized compensation expense related to non-vested restricted stock that is expected to be recognized over a weighted-average period of 2.2 years. Performance Share Plan Prior to 2021, certain officers of the Company and its subsidiaries became participants in a market-based performance share award plan. Performance shares are awarded based on our total shareholder return over designated performance periods as measured against a selected peer group. In addition, certain stock price performance must be achieved for a payout to occur. The final value of the performance shares will vary according to the number of shares of common stock that are ultimately granted based upon the actual level of attainment of the performance criteria. These performance awards are paid 50% in cash and 50% in common stock. The cash portion accrued is classified as a liability and the stock portion is classified as equity. In the event of a change-in-control, performance awards are paid 100% in cash. If it is determined that a change-in-control is probable, the equity portion of $2.1 million at December 31, 2021 would be reclassified as a liability. The outstanding performance periods at December 31, 2021 were as follows (shares in thousands):
|  |  | Possible Payout Range of Target
Grant Date | Performance Period | Target Grant of Shares | Minimum | Maximum
January 1, 2020 | January 1, 2020 - December 31, 2022 | 36 | 0% | 200%
January 1, 2019 | January 1, 2019 - December 31, 2021 | 36 | 0% | 200%
A summary of the status of the Performance Share Plan at December 31, 2021 was as follows:
| Equity Portion | Liability Portion
|  | Weighted-Average Grant Date Fair Value (a) |  | Weighted-Average Fair Value at
| Shares | Shares | December 31, 2021
| (in thousands) |  | (in thousands) |
Performance Shares balance at beginning of period | 61 |  | $ | 69.71 |  | 61 |  |
Granted | — |  | — |  | — |  |
Forfeited | — |  | — |  | — |  |
Vested | (25) |  | 61.82 |  | (25) |  |
Performance Shares balance at end of period | 36 |  | $ | 68.14 |  | 36 |  | $ | 31.51 |
____________________ (a) The grant date fair values for the performance shares granted in 2020 and 2019 were determined by Monte Carlo simulation using a blended volatility of 18% and 21%, respectively, comprised of 50% historical volatility and 50% implied volatility and the average risk-free interest rate of the three-year United States Treasury security rate in effect as of the grant date. The weighted-average grant-date fair value of performance share awards granted was as follows in the years ended:
| Weighted Average Grant Date Fair Value
December 31, 2020 | $ | 81.42 |
December 31, 2019 | $ | 68.72 |
Performance plan payouts have been as follows (in thousands):
Performance Period | Year Paid | Stock Issued | Cash Paid | Total Intrinsic Value
January 1, 2018 to December 31, 2020 | 2021 | 28 |  | $ | 1,647 |  | $ | 3,294 |
January 1, 2017 to December 31, 2019 | 2020 | 14 |  | $ | 1,100 |  | $ | 2,199 |
January 1, 2016 to December 31, 2018 | 2019 | 44 |  | $ | 2,860 |  | $ | 5,720 |
On January 25, 2022, the Compensation Committee of our Board of Directors determined that the Company’s total shareholder return for the January 1, 2018 to December 31, 2020 performance period was at the 30th percentile of its peer group and confirmed a payout equal to 40.17% of target shares, valued at $1.0 million. The payout was fully accrued at December 31, 2021. Performance Share Units Beginning in 2021, certain officers of the Company, and its subsidiaries, were granted performance share units which have a three-year vesting period, do not have voting rights until vested, and are subject to three specified conditions. A market condition of relative total shareholder return, and two equally weighted performance metrics of average earnings per share and the average cost to serve. The units are paid 100% in common stock should conditions be met and can range from 0% to 200% of the target award. Dividend equivalents are accrued during the vesting period and paid out based on the final number of shares awarded. In the event of participant’s death or retirement at age 55 or older, awarded vest on a pro-rata basis over the three-year period. Performance Share Units - Market Condition The fair value of each share unit is based on the Company’’s closing price at December 31 of the year prior to the award and a Monte Carlo simulation. The Monte Carlo simulation is used to estimate expected share payout based on the Company’s TSR for a three-year performance period relative to the designated peer group beginning January 1 of the award year.
| 2021
Fair value of share units award | $64.97
Three-year risk-free rate | 0.17%
Black Hills Corporation’s common stock volatility | 33%
Volatility range for the peer group | 25 | % | - | 76%
Performance Share Units - Performance Condition A performance condition share unit vests at the end of the three-year performance period if the specified performance conditions are achieved. The conditions are based on the Company’s average earnings per share and the average cost to serve. The grant-date fair value for an individual outcome of a performance condition is determined by the closing common share price on the grant date. The following table summarizes the performance share unit activity for the year ended December 31, 2021:
| Performance Share Units - Market Condition | Performance Share Units - Performance Condition
| Share Units | Weighted-Average Fair Value per Share Unit | Share Units | Weighted-Average Fair Value per Share Unit
Nonvested at January 1, 2021 | — |  | $ | — |  | — |  | $ | — |
Granted | 32,903 |  | 64.97 |  | 21,948 |  | 61.45 |
Nonvested at December 31, 2021 | 32,903 |  | $ | 64.97 |  | 21,948 |  | $ | 61.45 |
As of December 31, 2021, there was $2.9 million of unrecognized compensation expense related to outstanding performance share/unit plans that is expected to be recognized over a weighted-average period of 1.8 years.

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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