Stock-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

8.	Stock-Based Compensation

2012 Stock Incentive Plan

In October 2012, the Company adopted the 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan, employees and

non-employees

could be granted options on common stock, RSUs and other stock-based awards, including awards earned in connection with the Agent Equity Program. Generally, these awards were based on stock agreements with

ten-year

contractional terms for stock options, and seven-year contractual terms for RSU’s, subject to board approval.

2021 Equity Incentive Plan

In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Equity Incentive Plan (the “2021 Plan”), with an initial pool of 29,666,480 shares of common stock available for granting stock-based awards plus any reserved shares of common stock not issued or subject to outstanding awards granted under the Company’s 2012 Plan. The 2021 Plan became effective on March 30, 2021 and as of that date, the Company ceased granting new awards under the 2012 Plan. As of March 31, 2021, there were 41,105,315 shares available for future grants under the 2021 Plan.

2021 Employee Stock Purchase Plan

In February 2021, the board of directors and stockholders also adopted and approved the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP authorizes the issuance of 7,416,620 shares of common stock to purchase rights granted to the Company’s employees or to employees of its designated affiliates. In addition, on January 1 of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the ESPP shall be increased automatically by the number of shares equal to one percent (1%) of the total number of outstanding shares of common stock and shares of preferred stock of the Company outstanding (on an as converted to common stock basis) on the immediately preceding December 31 (rounded down to the nearest whole share), although the board of directors or one of its committees may reduce the amount of the increase in any particular year. No more than 150,000,000 shares of common stock may be issued over the term of the ESPP, subject to certain exceptions set forth in the ESPP. As of the date of this filing, no shares have been granted under the ESPP.

Stock Options

A summary of stock option activity under the 2012 Plan and the 2021 Plan, including 1,061,250 stock options that were granted outside of the 2012 Plan in 2019, is presented below (in millions, except share and per share amounts):


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (in years)		Aggregate Intrinsic Value
Balances as of December 31, 2020		62,827,150		$	4.55		7.8	$	1,208.0
Granted		1,888,660			11.04
Exercised		(4,710,490	)		3.05
Forfeited		(401,930	)		6.35

Balances as of March 31, 2021		59,603,390		$	4.86		7.7	$	780.0

Exercisable and vested at March 31, 2021		32,491,554		$	3.47		6.6	$	470.6

During the three months ended March 31, 2021 and 2020, the intrinsic value of options exercised was $79.8 million and $0.5 million, respectively.

Restricted Stock Units

A summary of RSU activity under the 2012 Plan and the 2021 Plan is presented below:


	Number of Shares			Weighted Average Grant Date Fair Value
Balances as of December 31, 2020		32,556,160		$	6.75
Granted		18,088,710			12.61
Vested and converted to common stock		—			—
Forfeited		(371,945	)		11.80

Balances as of March 31, 2021		50,272,925		$	8.82

Included in the table above are 8,611,810 RSUs granted to an executive employee during the three months ended March 31, 2021. These RSUs have service, performance and market-based vesting conditions that include stock price targets to be met after the listing of the Company’s stock on a public exchange.

Stock-Based Compensation Expense

Total stock-based compensation expense included in the condensed consolidated statements of operations is as follows (in millions):


	Three Months Ended March 31, 2021						Three Months Ended
	IPO Related Expense		Other Expense		Total		March 31, 2020
Commissions and other related expense	$	41.7	$	2.9	$	44.6	$	4.1
Sales and marketing		1.8		7.2		9.0		2.9
Operations and support		3.1		1.9		5.0		0.8
Research and development		46.9		2.6		49.5		0.5
General and administrative		55.0		4.4		59.4		2.8

Total stock-based compensation expense	$	148.5	$	19.0	$	167.5	$	11.1

As more fully described in Note 1 – “Business and Basis of Presentation

”,

the Company recognized $148.5 million in stock-based compensation expense in connection with the effectiveness of the Company’s IPO registration statement on March 31, 2021.

As of March 31, 2021, unrecognized stock-based compensation expense totaled $451.5 million and is expected to be recognized over a weighted-average period of 3.4 years.

The Company has not recognized any tax benefits from stock-based compensation as a result of the full valuation allowance maintained on its deferred tax assets.

Early Exercise of Stock Options

A majority of the stock options granted under the 2012 Plan provide option holders the right to elect to exercise unvested options in exchange for restricted common stock. Shares received from such early exercises are subject to repurchase in the event of the optionee’s termination of service until the stock options are fully vested at the lesser of the original issuance price or the fair value the Company’s common stock.

During the three months ended March 31, 2021, 737,560 stock options were early exercised for total proceeds of $4.5 million. As of March 31, 2021, 1,740,600 shares of common stock received by holders from an early exercise were subject to repurchase. The cash proceeds received for unvested shares of common stock recorded within Accrued expenses and other current liabilities and Other

non-current

liabilities in the condensed consolidated balance sheets was $9.0 million as of March 31, 2021. Amounts recorded are transferred into Common stock and Additional

paid-in

capital within the condensed consolidated balance sheets as the shares vest.