2013 Stock Option Plan (the “2013 Plan”) and 2017 Omnibus Equity Plan (the “2017 Plan”)

Effective June 17, 2013, the Board approved the adoption of the 2013 Plan. Following the Company’s IPO, the 2013 Plan is no longer used for granting new awards. Vesting of all option grants begins at the first anniversary of the date of grant. Options granted under the 2013 Plan vest 20% per year over five years.

In April 2017, the Board approved the 2017 Plan. The Company’s stockholders approved the 2017 Plan and it became effective in connection with the Company’s initial public offering. Under the 2017 Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock, restricted stock units (“RSUs”) and stock appreciation rights, dividend equivalent rights, share awards and performance-based awards to employees, directors or consultants. The Company initially reserved 5,000,000 shares of its common stock for issuance under the 2017 Plan. During 2021, the 2017 Plan was amended and restated principally to provide for an increase in the number of shares of the Company’s common stock reserved for issuance under the 2017 Plan by 13,000,000 shares. During 2023, the 2017 Plan was further amended and restated principally to provide for an increase in the number of shares of the Company’s common stock reserved for issuance under the 2017 Plan by 4,900,000 shares. A total of 3,673,109 shares were available for future grant under the 2017 Plan as of December 31, 2024.

The Board determines eligibility, vesting schedules and exercise prices for award grants. Option grants have a contractual term of 10 years from the date of grant. Under the 2017 Plan, options are granted with the exercise price being equal to or greater than the fair market value of the Company’s common stock at the date of grant.

Vesting of all option grants begins at the first anniversary of the grant date. Options granted under the 2017 Plan vest pro rata over a term of either three, four or five years.

In January 2019, the Board approved the ESPP, which was approved by the Company’s stockholders in May 2019. The ESPP requires that participating employees must be employed for at least 20 hours per week, have completed at least 6 months of service, and have compensation (as defined in the ESPP) not greater than $150,000 in the 12-month period before the enrollment date to be eligible to participate in the ESPP. Under the ESPP, eligible employees will receive a 10% discount from the lesser of the closing price on the first day of the offering period and the closing price on the purchase date. The Company reserved 500,000 shares of its common stock for issuance under the ESPP.

ESPP expense recognized by the Company was not material for the years ended December 31, 2024, 2023 and 2022. As of December 31, 2024, the Company has issued 170,958 shares to employees under the ESPP.

The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model using the following assumptions:


	Year Ended December 31, 2024
	Range		Weighted-Average
Expected volatility	61.4% to 67.0%
Dividend yield		—
Risk-free interest rate	3.6% to 4.5%
Expected term (in years)	5.5 to 7.5
Weighted-average fair value at grant date			$	3.68

	Year Ended December 31, 2023
	Range		Weighted-Average
Expected volatility	34.7% to 38.6%
Dividend yield		—
Risk-free interest rate	3.5% to 4.5%
Expected term (in years)	5.5 to 7.5
Weighted-average fair value at grant date			$	1.49

	Year Ended December 31, 2022
	Range		Weighted-Average
Expected volatility	31.5% to 34.5%
Dividend yield		—
Risk-free interest rate	1.4% to 3.7%
Expected term (in years)	5.5 to 9.1
Weighted-average fair value at grant date			$	1.09

There were 371,000 stock options granted during the year ended December 31, 2024. There were 8,794,112 stock options vested and exercisable at December 31, 2024.

There were 7,195,786 and 990,000 stock options granted during the years ended December 31, 2023 and 2022, respectively. There were 6,231,142 and 4,959,488 stock options vested and exercisable at December 31, 2023 and 2022, respectively.

Stock option activity for the year ended December 31, 2024 was as follows:


				Weighted-Average
	Number of Options			Exercise Price per Option		Remaining Contractual Term		Aggregate Intrinsic Value
	(thousands)					(years)		(millions)
Outstanding at December 31, 2023		19,791		$	6.25		7.4	$	15.7
Granted		371			5.77
Exercised		(277	)		4.99
Forfeited/Expired		(2,261	)		8.74
Outstanding at December 31, 2024		17,624		$	5.94		6.1	$	6.9
Exercisable at December 31, 2024		8,794		$	7.09		4.7	$	1.4

Information regarding fully vested and expected to vest stock options as of December 31, 2024 was as follows:


Exercise Price	Number of Options		Weighted Average Remaining Contractual Life
	(share data in thousands)		(years)
$2.87 - $4.66		6,865		7.96
$5.02 - $7.53		6,740		4.25
$8.00 - $12.00		3,132		4.15
$12.47 - $18.71		592		3.66
$22.08 - $33.12		295		2.96
		17,624

The aggregate intrinsic value is the amount by which the fair value of the common stock exceeded the exercise price of the options at December 31, 2024, for those options for which the market price was in excess of the exercise price.

The Company recognizes cumulative stock-based compensation expense for the portion of the awards for which the service period is probable of being satisfied. During the years ended December 31, 2024, 2023 and 2022, the Company recorded stock-based compensation expense related to stock options of $5.1 million, $6.2 million and $3.8 million, respectively, which is included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. The related deferred tax benefit for stock-based compensation recognized was $1.4 million, $1.9 million and $1.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The aggregate weighted average grant date fair value of stock options vested during the years ended December 31, 2024, 2023 and 2022, was $6.3 million, $3.7 million and $4.9 million, respectively. There was a total of $7.6 million unrecognized stock-based compensation expense at December 31, 2024 related to unvested stock options expected to be recognized over a weighted-average period of 1.89 years.

The Company grants RSUs that contain service conditions to certain executives and employees. The Company recognizes cumulative stock-based compensation expense for the portion of the awards for which the service period is probable of being satisfied. Stock-based compensation expense related to RSUs recognized in the years ended December 31, 2024, 2023 and 2022, was $1.0 million, $1.2 million and $1.9 million, respectively.

RSU activity for the year ended December 31, 2024 was as follows:


(share data in thousands, except per share data)	Number of RSUs (share data in thousands)			Weighted Average Grant Date Fair Value per Share
Unvested balance, December 31, 2023		541		$	5.95
Granted		91			6.59
Forfeited		(18	)		5.49
Vested		(346	)		6.35
Unvested balance, December 31, 2024		268		$	5.71

There was a total of $0.3 million unrecognized stock-based compensation expense at December 31, 2024 related to unvested RSUs expected to be recognized over a weighted-average period of 0.7 years.

In January 2020, the Company granted performance-based market condition share awards to one senior executive under the 2017 Omnibus Equity Plan, which entitle this employee the right to receive shares of common stock equal to a maximum value of $4.9 million in the aggregate, upon achievement of specified targeted share prices measured over sixty days within a ninety-day trading period. The performance-based market condition share awards granted in January 2020 remain unvested with an estimated weighted average conversion threshold of $21.09 per share, which would result in an estimated 45,718 shares of common stock to be issued upon vesting. Each of the estimated 45,718 shares of common stock has a weighted-average grant date fair value of $24.53 per share.

In June 2019, the Company granted performance-based market condition share awards to two senior executives under the 2017 Omnibus Equity Plan, which entitle these employees the right to receive shares of common stock equal to a maximum value of $16.9 million, in the aggregate, upon achievement of specified targeted share prices measured over sixty days within a ninety-day trading period. During the year ended December 31, 2020, performance-based market condition share awards with maximum value of $14.0 million, with an estimated 157,677 shares of common stock that would have been issued were forfeited. During the year ended December 31, 2024, performance-based market condition share awards that had been granted to one senior executive in June 2019, with maximum cash value of $4.9 million and an estimated 32,323 shares of common stock that would have been issued, were forfeited.

As of December 31, 2024, all outstanding performance-based market condition share awards remain unvested with an estimated weighted average conversion threshold of $21.09 per share. The Company recorded a credit of $0.3 million in stock-based compensation expense related to performance-based market condition share awards for the year ended December 31, 2024 and expense of $0.4 million and zero, respectively, for the years ended December 31, 2023 and 2022.

The performance-based market condition awards are classified as liability awards, which are measured at fair value, and are remeasured to an updated fair value at each reporting period. As of December 31, 2024 and 2023, the liability for these awards was $0.5 million and $0.8 million, respectively, and is reported on the consolidated balance sheets in other noncurrent liabilities. The fair value of performance-based market condition share awards is estimated on the grant date using a risk-neutral Monte Carlo simulation model. The aggregate fair value of the awards at the grant date was $1.9 million. The aggregate fair value of the awards as of December 31, 2024 and 2023 was $0.4 million and $1.3 million, respectively. The Company recognizes expense for performance-based market condition share awards over the derived service period for each tranche. As of December 31, 2024, the weighted average remaining service period is 5.0 years in aggregate. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether it becomes probable that these conditions will be achieved or not, and stock-based compensation expense for any such awards may be reversed if vesting does not occur and the employee terminates employment before the ten year term expires, except that upon a termination of employment other than for cause, or upon a termination for good reason within three months prior to the earlier of the execution of an agreement resulting in a change in control or the date of a change in control, any unvested shares subject to the performance-based market condition share award shall remain eligible to vest in accordance with the performance-based market condition share award agreement’s vesting conditions, including in the event of a change in control.

The weighted average assumptions used in determining the fair value for the performance-based market condition share awards granted in 2020 and 2019 and remeasured at December 31, 2024 were as follows:


	Grant Date			December 31, 2024
Expected volatility		41.7	%		69.8	%
Dividend yield		1.1	%		1.2	%
Risk-free interest rate		1.3	%		3.6	%

The weighted-average expected term of the Company’s performance-based market condition share awards was 3.7 years at grant date, which represents the weighted-average of the derived service periods for the share awards.