Stock-Based Compensation | Share-Based Compensation Long Term Incentive Plan In connection with the IPO, Brigham Minerals adopted the Brigham Minerals, Inc. 2019 Long Term Incentive Plan (“LTIP”) for employees, consultants and directors who perform services for Brigham Minerals. The LTIP provides for issuance of awards based on shares of Class A common stock. Brigham Minerals has issued restricted stock awards ("RSAs"), restricted stock units subject to time-based vesting ("RSUs") and restricted stock units subject to performance-based vesting ("PSUs") under the LTIP. The shares to be delivered under the LTIP shall be made available from (i) authorized but unissued shares, (ii) shares held as treasury stock or (iii) previously issued shares reacquired by Brigham Minerals including shares purchased on the open market. A total of 5,999,600 shares of Class A common stock have been authorized for issuance under the LTIP. At March 31, 2021, 3,028,367 shares of Class A common stock remained available for future grants. Currently, all RSAs, RSUs and PSUs granted under the LTIP are entitled to receive dividends (in the case of RSAs) or have dividend equivalent rights (“DERs”), which entitle holders of RSUs and PSUs to the same dividend value per share as holders of the Company's Class A common stock. Such dividends and DERs are subject to the same vesting and other terms and conditions as the corresponding unvested RSAs, RSUs, and PSUs. Dividends and DERs are accumulated and paid when the underlying shares vest. The fair value of the RSA awards granted with the right to receive dividends and RSU awards granted with the right to receive DERs are generally based on the trading price of the Company’s Class A common stock as of the date of grant. Brigham Minerals accounts for the awards granted under the LTIP as compensation cost measured at the fair value of the award on the date of grant. Brigham Minerals accounts for forfeitures as they occur. The Company has granted RSAs to certain employees, which are grants of shares of Class A common stock subject to a risk of forfeiture and restrictions on transferability. The share-based compensation expense of such RSAs was determined using the closing price of Class A common stock on April 23, 2019, the date of grant, of $21.25. The RSAs generally vested in one-third increments on each of April 23, 2020 and 2021 and will vest as to the final one-third increment on April 23, 2022 and are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases providing services to Brigham Minerals prior to the lapse of such restrictions. The following table summarizes activity related to RSAs for the three months ended March 31, 2021. Restricted Stock Awards Number of RSAs Grant Date Fair Value Unvested at January 1, 2021 68,293 $ 21.25 Vested — $ — Forfeited (4,512) $ 21.25 Unvested at March 31, 2021 63,781 $ 21.25 The Company has granted RSUs to certain employees and directors, which represent the right to receive shares of Class A common stock at the end of the vesting period in an amount equal to the number of RSUs that vest. The RSUs generally vest in one-third increments over a three-year period and are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases providing services to Brigham Minerals prior to the date the award vests. The share-based compensation cost of such RSUs was determined using the closing price on the applicable date of grant, which is then applied to the total number of RSUs granted. During the three months ended March 31, 2021, the Company granted 527,778 RSUs. The share-based compensation expense of such RSUs was determined using the closing price of Class A common stock on February 24, 2021, the date of grant, of $16.11. The following table summarizes activity related to RSUs for the three months ended March 31, 2021. Restricted Stock Units Number of RSUs Weighted-Average Grant Date Fair Value Unvested at January 1, 2021 562,871 $ 17.81 Granted 527,778 $ 16.11 Vested — $ — Forfeited (2,710) $ 18.29 Unvested at March 31, 2021 1,087,939 $ 16.98 The Company has granted PSUs to certain officers and managers, which vest based on continuous employment and satisfaction of a performance metric based on the absolute total shareholder return of the Company’s common stock, including paid dividends, over an approximate three-year performance period. The terms and conditions of the PSUs allow for vesting of the awards ranging between 0% (or forfeiture) and 200% of target. Expense related to these PSUs is recognized on a straight-line basis over the length of the applicable performance period. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved. The grant date fair value of such PSUs was determined using a Monte Carlo simulation model that utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award to calculate the fair value of the award. Expected volatilities in the model were estimated on the basis of historical volatility of a group of publicly traded oil and gas companies with a performance period of approximately three years. The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the expected life of the grant. The following table summarizes activity related to PSUs for the three months ended March 31, 2021. In addition, no PSUs became vested or were forfeited during the three months ended March 31, 2021: Performance-Based Restricted Stock Units Target PSUs Grant Date Fair Value Unvested at January 1, 2021 1,187,811 $ 10.07 Granted (1) — — Unvested at March 31, 2021 1,187,811 $ 10.07 (1) In February 2021, the Compensation Committee of the Board of Directors approved a grant of 472,377 PSUs and management is in the process of executing the award agreements. However, as all terms of the grant have not yet been agreed to, a grant date has not been established as of March 31, 2021. Share-Based Compensation Expense Share-based compensation expense is included in general and administrative expense in the Company's condensed consolidated statements of operations included within this Quarterly Report. Share-based compensation expense recorded for each type of share-based compensation award for the three months ended March 31, 2021 and 2020 is summarized in the table below. Three Months Ended March 31, (In thousands) 2021 2020 Incentive Units (1) $ 178 $ 178 RSAs (1) (4) 134 700 RSUs (1) 2,542 1,594 PSUs (2) 1,079 930 Capitalized share-based compensation (3) (1,633) (1,518) Total share-based compensation expense $ 2,300 $ 1,884 (1) Share-based compensation expense relating to Incentive Units, RSAs and RSUs with ratable vesting is recognized on a straight-line basis over the requisite service period for the entire award. (2) Share-based compensation expense relating to PSUs with cliff-vesting is recognized on a straight-line basis over the performance period for the entire award. (3) During the three months ended March 31, 2021, Brigham Minerals capitalized $0.9 million of share-based compensation cost to unevaluated property and $0.7 million of share-based compensation cost to evaluated property. (4) During the three months ended March 31, 2020, share-based compensation cost included $0.5 million associated with the accelerated vesting of 30,174 RSAs for certain employees who retired in February 2020. Future Share-Based Compensation Expense The following table reflects the future share-based compensation expense expected to be recorded for the share-based compensation awards that were outstanding at March 31, 2021, a portion of which will be capitalized: Incentive Units RSAs RSUs PSUs Total Year (In thousands) 2021 $ 534 $ 511 $ 7,110 $ 3,296 $ 11,451 2022 534 209 5,477 966 7,186 2023 — — 2,828 — 2,828 Total $ 1,068 $ 720 $ 15,415 $ 4,262 $ 21,465 |