COMPENSATION ARRANGEMENTS

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Groupon, Inc. Stock Plans

In January 2008, we adopted the 2008 Stock Option Plan, as amended (the "2008 Plan"), under which options for up to 3,230,925 shares of common stock were authorized to be issued to employees, consultants and directors. The 2008 Plan was frozen in December 2010. In April 2010, we established the Groupon, Inc. 2010 Stock Plan (the "2010 Plan"), as amended in April 2011, under which options and restricted stock units ("RSUs") for up to 1,000,000 shares of common stock were authorized for future issuance to employees, consultants and directors. No new awards may be granted under the 2010 Plan following our initial public offering in November 2011. In August 2011, we established the Groupon, Inc. 2011 Stock Plan (the "2011 Plan"), as amended in November 2013, May 2014, June 2016 and April 2019, under which options, RSUs and performance stock units for up to 9,375,000 shares of common stock were authorized for future issuance to employees, consultants and directors.

The Groupon, Inc. Stock Plans described above (the "Plans") are administered by the Compensation Committee of the Board (the "Compensation Committee"). As of December 31, 2021, 2,055,180 shares of common stock were available for future issuance under the Plans.

The stock-based compensation expense related to stock awards issued under the Plans and acquisition-related awards are presented within the following line items of the consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019 (in thousands):


	Year Ended December 31,
	2021		2020		2019
Cost of revenue	$	585	$	662	$	1,482
Marketing	748		1,522		5,809
Selling, general and administrative	31,836		36,826		74,324
Restructuring and related charges	—		1,735		—
Total stock-based compensation expense	$	33,169	$	40,745	$	81,615

We capitalized $3.7 million, $4.5 million and $7.1 million of stock-based compensation for the years ended December 31, 2021, 2020 and 2019, in connection with internally-developed software and cloud computing arrangements.

Employee Stock Purchase Plan

The Groupon, Inc. 2012 Employee Stock Purchase Plan, as amended, authorizes us to grant up to 1,000,000 shares of common stock under that plan. For the years ended December 31, 2021, 2020 and 2019, 49,399, 69,371 and 74,300 shares of common stock were issued under the ESPP.

Restricted Stock Units

The restricted stock units granted under the Plans generally have vesting periods between one and four years and are amortized on a straight-line basis over their requisite service period.

The table below summarizes restricted stock unit activity under the Plans for the year ended December 31, 2021:


	Restricted Stock Units	Weighted- Average Grant Date Fair Value (per share)
Unvested at December 31, 2020	1,853,007	$	31.91
Granted	2,150,963	31.48
Vested	(1,229,689)	30.26
Forfeited	(569,046)	36.69
Unvested at December 31, 2021	2,205,235	$	31.06

The weighted-average grant date fair value of restricted stock units granted in 2020 and 2019 was $24.92 and $68.80. The fair value of restricted stock units that vested during each of the three years ended December 31, 2021, 2020 and 2019 was $48.8 million, $19.2 million and $43.8 million. As of December 31, 2021, $49.9 million of unrecognized compensation costs related to unvested employee restricted stock units are expected to be recognized over a remaining weighted-average period of 1.11 years.

Performance Share Units

We grant performance share units under the Plans that vest in shares of our common stock upon the achievement of financial and operational targets specified in the respective award agreement ("Performance Share Units"). During the year ended December 31, 2019, we also granted performance share units subject to a market condition ("Market-based Performance Share Units").

The Market-based Performance Share Units will vest if our average daily closing stock price is equal to or greater than $120.00 per share over a period of 30 consecutive trading days prior to December 31, 2022 or if a change in control occurs during the performance period at the specified stock price (and on a proportional basis for a change in control price between the grant date price and the specified stock price). We used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period over which we recognized the expense. The key inputs used in the Monte Carlo simulation were the risk-free rate, our volatility of 49.8% and our cost of equity of 12.8%.

Our Performance Share Units and Market-based Performance Share Units are subject to continued employment through the performance period dictated by the award and certification by the Compensation Committee that the specified performance conditions have been achieved.

The table below summarizes Performance Share Unit activity under the Plans for the year ended December 31, 2021:


	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)		Market-based Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2020	124,709	$	29.73	57,668	$	60.60
Granted (1)	41,729	15.44		—	—
Vested	(90,006)	26.46		—	—
Forfeited	(38,669)	23.24		—	—
Unvested at December 31, 2021	37,763	$	28.39	57,668	$	—

Maximum shares issuable upon vesting at December 31, 2021	37,763			57,668

(1) Performance Share Units granted during the year ended December 31, 2021 relate to the issuance of incremental shares upon the Compensation Committee's certification of the achievement of the 2020 performance metrics.

As of December 31, 2021, $0.1 million of unrecognized compensation costs related to unvested Performance Share Units are expected to be recognized over a remaining weighted-average period of 0.99 years. We have recognized all compensation costs related to our unvested Market-Based Performance Share Units.

Defined Contribution Plans

We have a 401(k) defined contribution retirement savings plan covering substantially all domestic employees. Each participant may elect to defer a portion of his or her compensation subject to certain limitations. We contribute up to 50% of the first 6% of eligible compensation contributed to the plan, subject to a 3 year graded vesting schedule. We also have several foreign defined contribution plans, which require us to contribute a percentage of participating employee's salary according to local regulations. During the years ended December 31, 2021, 2020 and 2019, our contributions for all plans were $6.7 million, $6.6 million and $9.4 million.