The Company’s Amended and Restated 2006 Equity Incentive Plan (the “2006 Plan”) provided for the issuance of non-qualified stock options, restricted stock, and stock awards to the Company’s employees, officers, directors, and consultants. The 2006 Plan authorized up to an aggregate of 3,444,668 shares of the Company's Class B common stock for such issuances. In conjunction with the effectiveness of the Company’s 2015 Equity Incentive Plan (the “2015 Plan”), the Board voted that no further stock options or other equity-based awards may be granted under the 2006 Plan.

In 2015 the Board adopted the 2015 Plan, which became effective on June 26, 2015. The 2015 Plan provided for the issuance of stock-based incentives to employees, consultants, and non-employee directors. As of the effective date of the 2015 Plan, up to 603,436 shares of common stock were authorized for issuance under the 2015 Plan. The 2015 Plan was amended and restated effective August 6, 2015 to permit the granting of RSUs under the 2015 Plan, to remove Class B common stock from the pool of shares available for issuance under the 2015 Plan, and to make certain other desired changes. The 2015 Plan was further amended and restated at October 15, 2015 to add a ten-year term and to make certain other desired changes.

The 2015 Plan was further amended and restated effective August 22, 2016 to merge the 2006 Plan into the 2015 Plan, to increase the number of shares of Class A common stock that may be issued under the 2015 Plan, and to lengthen the term of the 2015 Plan to expire on August 21, 2026. In addition, pursuant to this amendment and restatement of the 2015 Plan, prior to giving effect to the recapitalization that occurred on June 21, 2017, there were (i) 618,691 shares of Class A common stock, plus (ii) 802,562 shares of Class B common stock authorized under the 2015 Plan; provided, however, that (1) the number of shares of Class A common stock was increased, on a share for share basis, by the number of shares of Class B common stock that were (a) subject to outstanding options granted under the 2006 Plan that expired, terminated, or were canceled for any reason without having been exercised, (b) surrendered in payment of the exercise price of outstanding options granted under the 2006 Plan, or (c) withheld in satisfaction of tax withholding upon exercise of outstanding options granted under the 2006 Plan, and the number of shares of Class B common stock reserved under the amended and restated 2015 Plan was decreased, on a corresponding share for share basis, (2) no new awards of Class B common stock could be granted under the amended and restated 2015 Plan, and (3) except with respect to outstanding options granted under the 2006 Plan that were exercised on or after the date of the amendment and restatement, no Class B common stock could be issued under the 2015 Plan.

In connection with the recapitalization that occurred on June 21, 2017, the 2015 Plan was further amended and restated to account for each outstanding common stock option being adjusted such that each share of common stock underlying such option became two shares of Class A common stock and four shares of Class B common stock underlying such option, and each outstanding RSU being adjusted such that each share of common stock issuable upon settlement of such RSU became two shares of Class A common stock and four shares of Class B common stock issuable upon settlement of such RSU. Pursuant to the 2015 Plan as further amended in connection with the recapitalization, there were (i) 3,181,740 shares of Class A common stock and (ii) 5,161,644 shares of Class B common stock authorized for issuance under the 2015 Plan.

In connection with the Company's initial public offering ("IPO"), in October 2017 the Board adopted, and the Company’s stockholders approved, the 2017 Plan for the purpose of granting incentive stock options, non-qualified stock options, stock awards, stock units, other share-based awards, and cash awards to employees, advisors, and consultants to the Company and its subsidiaries and non-employee members of the Board. The 2017 Plan is the successor to the 2015 Plan. The 2017 Plan authorizes the issuance or transfer of the sum of: (i) 7,800,000 shares of the Company’s Class A common stock, plus (ii) the number of shares of Class A common stock (up to 4,500,000 shares) equal to the sum of (x) the number of shares of Class A common stock and Class B common stock of the Company subject to outstanding awards under the 2015 Plan as of October 10, 2017, that terminate, expire, or are canceled, forfeited, exchanged, or surrendered on or after October 10, 2017, without having been exercised, vested, or paid prior to October 10, 2017, including shares tendered or withheld to satisfy tax withholding obligations with respect to outstanding grants under the 2015 Plan, plus (y) the number of shares of Class A common stock reserved for issuance under the 2015 Plan that remain available for grant under the 2015 Plan as of October 10, 2017. The aggregate number of shares of Class A common stock that may be issued or transferred under the 2017 Plan pursuant to incentive stock options will not exceed 12,300,000 shares of Class A common stock. Unless determined otherwise by the Compensation Committee of the Board, as of the first trading day of January of each calendar year during the term of the 2017 Plan (excluding any extensions), eligible beginning with calendar year 2019, an additional number of shares of Class A common stock will be added to the number of shares of the Company’s Class A common stock authorized to be issued or transferred under the 2017 Plan and the number of shares authorized to be issued or transferred pursuant to incentive stock options, equal to 4% of the total number of shares of Class A common stock outstanding on the last trading day in December of the immediately preceding calendar year, or 6,000,000 shares, whichever is less, or such lesser amount as determined by the Board (the “Evergreen Increase”). The Compensation Committee of the Board determined to not effectuate the Evergreen Increase that was otherwise scheduled to have occurred on each of January 2, 2019, January 2, 2020, and January 4, 2021. On January 3, 2022, an additional 4,070,921 shares of the Company's Class A Common Stock was authorized to be issued or transferred under the 2017 Plan pursuant to the Evergreen Increase. On January 3, 2023, an additional 4,065,466 shares of the Company's Class A Common Stock was authorized to be issued or transferred under the 2017 Plan pursuant to the Evergreen Increase. On January 2, 2024, an additional 3,687,010 shares of the Company's Class A Common Stock was authorized to be issued or transferred under the 2017 Plan pursuant to the Evergreen Increase. In conjunction with the adoption of the 2017 Plan, options and RSUs outstanding under the 2015 Plan will remain outstanding but no additional grants will be made from the 2015 Plan.

As of December 31, 2023, 6,236,628 shares of Class A common stock were available for issuance under the 2017 Plan.

The 2020 CO Plan provided for the issuance of CO Incentive Units to CarOffer’s employees, officers, managers, and consultants. The 2020 CO Plan authorized up to an aggregate of 485,714 CO Incentive Units for such issuances, all of which were issued prior to the close of the 2021 CarOffer Transaction. At the time of the 2021 Closing, 142,857 CO Incentive Units were accelerated and redeemed. The compensation relating to these CO Incentive Units was deemed to be outside of consideration transferred. Therefore, for the year ended December 31, 2021, the Company recognized an additional $1,229 of stock-based compensation expense. As a result of the 2023 CarOffer Transaction, all CO Incentive Units were accelerated and redeemed and, thus, as of December 31, 2023, there were no CO Incentive Units unvested. During the year ended December 31, 2023, no CO Incentive Units were granted, vested, or forfeited. As of December 31, 2023, there is no unrecognized stock‑based compensation expense related to the unvested CO Incentive Units, as a result of the redemption of the awards following the 2021 CarOffer Transaction. As of December 31, 2022, 342,857 CO Inventive Units were unvested.

As of December 31, 2023, there were no CO Incentive Units available for issuance under the 2020 CO Plan.

The Vesting Agreement provides for the vesting of the Subject Units beneficially owned by the T5 Holders, which vest in accordance with the terms described in Note 2 of these consolidated financial statements. As a result of the 2023 CarOffer Transaction, all Subject Units were accelerated and redeemed and, thus, as of December 31, 2023, no Subject Units were unvested. As of December 31, 2022, 288,395 Subject Units were issued and unvested, respectively. During the year ended December 31, 2023, there were no Subject Units granted or vested. During the year ended December 31, 2022, no Subject Units were granted and 144,197 Subject Units vested. During the year ended December 31, 2023 and 2022, no Subject Units were forfeited. As of December 31, 2023, there is no unrecognized stock‑based compensation expense related to the unvested Subject Units, as a result of the redemption of the awards following the 2023 CarOffer Transaction.

As of December 31, 2023, there were no Subject Units available for issuance under the Vesting Agreement.

The 2021 CO Plan provides for an incentive equity grant structure whereby 2021 Incentive Units will be granted to CIE and 2021 CO Plan grantees will receive an associated CIE Interest, with back-to-back vesting between the 2021 Incentive Units and the associated CIE Interest. The 2021 CO Plan authorized up to an aggregate of 228,571 2021 Incentive Units for such issuances.

As of December 31, 2023, there were no 2021 Incentive Units available for issuance under the 2021 CO Plan.

All CO Incentive Units and Subject Units were accelerated and redeemed in connection with the 2023 CarOffer Transaction. As a result, there were no CO Incentive Units, Subject Units or 2021 Incentive Units as of December 31, 2023.

During the year ended December 31, 2023, stock option activity is as follows:


	Common Stock			Weighted- Average Exercise Price for Equity		Weighted- Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value(1)
Outstanding, December 31, 2022		826,609		$	25.22		6.2	$	3,172
Granted		—			—
Exercised		(15,834	)		4.69				229
Forfeited or Expired		(34,681	)		35.61
Outstanding, December 31, 2023		776,094		$	25.17		5.3	$	5,442
Exercisable as of December 31, 2023		590,401		$	21.83		4.7	$	5,442

(1)

As of December 31, 2023 and 2022, the aggregate intrinsic value was calculated based on the positive difference, if any, between the estimated fair value of common stock on December 31, 2023 and 2022, respectively, or the date of exercise, as appropriate, and the exercise price of the underlying options.

During the year ended December 31, 2022, there were 30,266 options granted. During the year ended December 31, 2021, there were 619,618 options granted.

During the years ended December 31, 2022 and 2021, the aggregate intrinsic value for options exercised was $3,774 and $6,027, respectively.

As of December 31, 2023, there was $2,623 unrecognized stock‑based compensation expense related to unvested stock options that is expected to be recognized over a weighted‑average period of 1.3 years.

During the year ended December 31, 2023, RSU activity is as follows:


	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Unvested outstanding, December 31, 2022		4,484,291		$	29.36	$	62,825
Granted		4,133,865			17.47
Vested		(2,440,510	)		26.83
Forfeited		(489,935	)		24.30
Unvested outstanding, December 31, 2023		5,687,711		$	22.02	$	137,415

During the years ended December 31, 2022 and 2021, the weighted-average grant-date fair value of RSUs granted was $28.94 and $33.83 per share, respectively.

During the years ended December 31, 2022 and 2021, RSUs that vested and settled totaled 1,649,294 and 1,575,206, respectively.

During the years ended December 31, 2022 and 2021, the total fair value of RSUs vested was $55,136 and $52,423, respectively.

As of December 31, 2023, there was $108,714 of unrecognized stock‑based compensation expense related to unvested RSUs that is expected to be recognized over a weighted‑average period of 2.5 years.

For the year ended December 31, 2023, 2022, and 2021, stock-based compensation expense by award type and where the stock-based compensation expense was recognized in the Company’s consolidated income statements is as follows:


	Year Ended December 31,
	2023		2022			2021
Options	$	2,386	$	2,553		$	2,471
Restricted Stock Units		55,527		52,224			52,916
CO Incentive Units and Subject Units		26,552		(21,095	)		22,323
Noncontrolling Interest Units		28,991		—			—
Total	$	113,456	$	33,682		$	77,710

CO Incentive Units and Subject Units stock-based compensation expense increased $47,647, primarily due to the redemption of the units in connection with the 2023 CarOffer Transaction. See Note 4 of these consolidated financial statements for additional information. Additionally, this increase was due in part to the prior-year revaluation of these liability-based awards which brought the value down to zero, thus resulting in negative expense for the year ended December 31, 2022.

Noncontrolling Interest Units, which were employee-owned, increased $28,991 for the year ended December 31, 2023 compared to the year ended December 31, 2022, due to the redemption of the Noncontrolling Interest Units in connection with the completion of the 2023 CarOffer Transaction.


	Year Ended December 31,
	2023		2022		2021
Cost of revenue	$	2,370	$	475	$	417
Sales and marketing expense		13,710		7,733		12,801
Product, technology, and development expense		25,934		20,266		22,289
General and administrative expense		71,442		5,208		42,203
Total	$	113,456	$	33,682	$	77,710

For the years ended December 31, 2023, 2022, and 2021, stock-based compensation expense excluded $5,472, $4,468, and $3,247, respectively, of capitalized website development costs, capitalized internal-use software costs, and capitalized hosting arrangements.

For the years ended December 31, 2023, 2022, and 2021, the income tax benefit from stock-based compensation expense, recognized through the Company's deferred tax asset in the consolidated balance sheets was $5,353, $5,441, and $5,301, respectively.

During the years ended December 31, 2023, 2022, and 2021, the Company withheld 840,995, 566,267, and 527,237 shares of Class A common stock, respectively, to satisfy employee tax withholding requirements for net share settlements of RSUs. The shares withheld return to the authorized, but unissued pool under the 2017 Plan and can be reissued by the Company. For the years ended December 31, 2023, 2022, and 2021, total payments to satisfy employee tax withholding requirements for net share settlements of RSUs, were $15,729, $16,025, and $15,388, respectively, and are reflected as a financing activity in the consolidated statements of cash flows.

For the year ended December 31, 2023, total payments to satisfy employee tax withholding requirements for net share settlements of RSUs were $15,729, of which $15,597 was paid and reflected as a financing activity in the consolidated statements of cash flows. For the year ended December 31, 2022, total payments to satisfy employee tax withholding requirements for net share settlements of RSUs were $16,025, of which $16,022 was paid and reflected as a financing activity in the consolidated statements of cash flows.

In connection with the 2023 CarOffer Transaction, the Company redeemed all remaining CO Incentive Units, Subject Units, and Noncontrolling Interest Units.

Certain of the Noncontrolling Interest Units were employee owned. The Company paid $28,991 for these units and accounted for this portion of the 2023 CarOffer Transaction as stock-based compensation in its consolidated income statements. For all other Noncontrolling Interest Units, the Company reduced the remaining redeemable noncontrolling interest on its consolidated balance sheets to zero and recorded excess cash paid to these unit holders as a deemed dividend of $5,838.

As part of the 2023 CarOffer Transaction, Subject Units and CO Incentive Units were modified such that any remaining unvested units received accelerated vesting. As part of the 2023 CarOffer Transaction, the Company purchased all outstanding Subject Units and CO Incentive Units and recognized approximately $20,655 of stock-based compensation in its consolidated income statements.

As of December 31, 2023, the Company had reserved the following shares of Class A common stock for future issuance:


Common stock options outstanding			776,094
Unvested restricted stock units outstanding			5,687,711
Shares available for issuance under the 2017 Plan			6,236,628
Total shares of authorized common stock reserved for future issuance			12,700,433

On November 7, 2023, the Company announced that the Board authorized a share repurchase program (the “2024 Share Repurchase Program”), pursuant to which the Company may, from time to time, purchase shares of its Class A common stock for an aggregate purchase price not to exceed $250.0 million. Share repurchases under the 2024 Share Repurchase Program may be made through a variety of methods, including but not limited to open market purchases, privately negotiated transactions, and transactions that may be effected pursuant to one or more plans under Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934. The 2024 Share Repurchase Program does not obligate the Company to repurchase any minimum dollar amount or number of shares. The 2024 Share Repurchase Program has an effective date of January 1, 2024, and an expiration date of December 31, 2024, and prior to its expiration may be modified, suspended, or discontinued by the Board at any time without prior notice. All repurchased shares under the 2024 Share Repurchase Program will be retired. The Company expects to fund share repurchases under the 2024 Share Repurchase Program through cash on hand and cash generated from operations.

On December 8, 2022, the Company announced that the Board authorized a share repurchase program (the “2022 Share Repurchase Program”) pursuant to which the Company could, from time to time, purchase shares of its Class A common stock for an aggregate purchase price not to exceed $250.0 million. The 2022 Share Repurchase Program expired on December 31, 2023. The 2022 Share Repurchase Program did not obligate the Company to repurchase any minimum dollar amount or number of shares. All repurchased shares under the 2022 Share Repurchase Program were retired. The Company funded share repurchases under the 2022 Share Repurchase Program through cash on hand and cash generated from operations.

During the year ended December 31, 2023, the Company repurchased and retired 11,076,755 shares for $204,127, exclusive of commissions and excise tax, at an average cost of $18.43 per share, under the 2022 Share Repurchase Program. As of December 31, 2023, the 2022 Share Repurchase Program expired.