9. Stock Options, Restricted Stock and Restricted Stock Units

The Company administers the Strayer Education, Inc. 2015 Equity Compensation Plan (the “2015 Plan”), which provides for the granting of restricted stock, restricted stock units, stock options intended to qualify as incentive stock options, options that do not qualify as incentive stock options, and other forms of equity compensation and performance-based awards to employees, officers, and directors of the Company, or to a consultant or advisor to the Company, at the discretion of the Board of Directors. Vesting provisions are at the discretion of the Board of Directors. Options may be granted at option prices based at or above the fair market value of the shares at the date of grant. The maximum term of the awards granted under the 2015 Plan is ten years. The number of shares of common stock reserved for issuance under the 2015 Plan is 500,000 authorized but unissued shares, plus the number of shares available for grant under the Company’s previously existing equity compensation plans at the time of stockholder approval of the 2015 Plan, plus the number of shares which may in the future become available under any previously existing equity compensation plan due to forfeitures of outstanding awards.

In February 2018, the Company’s Board of Directors approved grants of 144,577 shares of restricted stock to certain individuals. These shares, which vest over a four-year period, were granted pursuant to the 2015 Plan. The Company’s stock price closed at $90.99 on the date of these grants.

In May 2018, the Company’s Board of Directors approved grants of 5,856 shares of restricted stock. These shares, which vest annually over a three-year period, were awarded to non-employee members of the Company’s Board of Directors, as part of the Company’s annual director compensation program and the 2015 Plan. The Company’s stock price closed at $103.37 on the date of these grants.

Dividends paid on unvested restricted stock are reimbursed to the Company if the recipient forfeits his or her shares as a result of termination of employment prior to vesting in the award, other than as a result of the recipient’s death, disability, or certain qualifying terminations in connection with a change in control of the Company, unless waived by the Company.

Restricted Stock and Restricted Stock Units

The table below sets forth the restricted stock and restricted stock units activity for the six months ended June 30, 2018:


	Number of shares or units	Weighted- average Grant price
Balance, December 31, 2017	716,128	$	99.65
Grants	150,433		91.47
Vested shares	(198,104)		69.12
Forfeitures	(11,331)		57.37
Balance, June 30, 2018	657,126	$	112.86

Stock Options

The table below sets forth the stock option activity and other stock option information as of and for the six months ended June 30, 2018:


				Weighted-
				average
		Weighted-		remaining	Aggregate
	Number of	average		contractual	intrinsic value(1)
	shares	exercise price		life (years)	(in thousands)
Balance, December 31, 2017	100,000	$	51.95	3.1	$	3,763
Grants	—		—
Exercises	—		—
Forfeitures/Expirations	—		—
Balance, June 30, 2018	100,000	$	51.95	2.6	$	6,106
Exercisable, June 30, 2018	100,000	$	51.95	2.6	$	6,106

⁽¹⁾

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company’s common stock.

Valuation and Expense Information under Stock Compensation Topic ASC 718

At June 30, 2018, total stock-based compensation cost which has not yet been recognized was $22.3 million for unvested restricted stock, restricted stock units, and stock option awards. This cost is expected to be recognized over the next 32 months on a weighted-average basis. Awards of approximately 552,000 shares of restricted stock and restricted stock units are subject to performance conditions. The accrual for stock-based compensation for performance awards is based on the Company’s estimates that such performance criteria are probable of being achieved over the respective vesting periods. Such a determination involves judgment surrounding the Company’s ability to maintain regulatory compliance. If the performance targets are not reached during the respective vesting period, or it is determined it is more likely than not that the performance criteria will not be achieved, related compensation expense is adjusted.

The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three and six months ended June 30, 2017 and 2018 (in thousands):


	For the three months ended				For the six months ended
	June 30,				June 30,
	2017		2018		2017		2018
Instruction and educational support	$	645	$	499	$	814	$	1,118
Marketing		—		—		—		—
Admissions advisory		—		—		—		—
General and administration		2,583		2,751		4,840		4,819
Stock-based compensation expense included in operating expense		3,228		3,250		5,654		5,937
Tax benefit		1,275		894		2,233		1,646
Stock-based compensation expense, net of tax	$	1,953	$	2,356	$	3,421	$	4,291

During the three months ended June 30, 2017 and 2018, the Company recognized a tax windfall related to share-based payment arrangements of approximately $0.6 million and $2.0 million, respectively, which was recorded as an adjustment to the provision for income taxes. No stock options were exercised during the six months ended June 30, 2017 or 2018.