STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS

Groupon, Inc. Incentive Plan

In August 2011, we established the Groupon, Inc. 2011 Incentive Plan, as amended and restated (the "2011 Plan"), under which options, restricted stock units and performance stock units for up to 13,775,000 shares of common stock are authorized for future issuance to employees, consultants and directors. The 2011 Plan is administered by the Compensation Committee of the Board of Directors. As of September 30, 2023, 2,728,411 shares of common stock were available for future issuance under the 2011 Plan.

Restricted Stock Units

The restricted stock units granted under the 2011 Plan ("Restricted Stock Units") 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 for employees and non-employees under the 2011 Plan for the nine months ended September 30, 2023:


	Restricted Stock Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2022	2,876,089	$	19.33
Granted	601,314	5.26
Vested	(1,342,961)	19.32
Forfeited	(1,210,548)	15.79
Unvested at September 30, 2023	923,894	$	11.32

As of September 30, 2023, $6.1 million of unrecognized compensation costs related to unvested Restricted Stock Units are expected to be recognized over a remaining weighted-average period of 0.85 years.

Stock Options

On March 30, 2023, we issued 3,500,000 units of stock options with a per share value of $0.95, a strike price of $6.00 and vesting over two years. The exercise price of stock options granted is equal to the fair market value of the underlying stock on the date of grant. The contractual term for these stock options expires three years from the grant date. The fair value of stock options on the grant date is amortized on a straight-line basis over the requisite service period.

The fair value of stock options granted is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Expected volatility is based on Groupon's historical volatility over the estimated expected life of the stock options. The expected term represents the period of time the stock options are expected to be outstanding. The risk-free interest rate is based on yields on U.S. Treasury STRIPS with maturity similar to the estimated expected life of the stock options. The weighted-average assumptions for stock options granted are outlined in the following table:


Dividend yield	0.0	%
Risk-free interest rate	4.1	%
Expected term (in years)	2
Expected volatility	78.2	%

The table below summarizes stock option activity for the nine months ended September 30, 2023:


	Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022	—	$	—	—	$	—
Granted	3,500,000	6.00		3.00	—
Exercised	(437,500)	6.00
Outstanding at September 30, 2023	2,625,000	6.00		2.5	24,465
Vested and exercisable at September 30, 2023	437,500	$	6.00	2.5	$	4,078

As of September 30, 2023, there was $2.5 million of total unrecognized compensation costs related to unvested stock options granted under the 2011 Plan. That cost is expected to be recognized over a weighted-average period of 1.5 years. The total fair value of shares vested during the nine months ended September 30, 2023 was $0.8 million.

Performance Shares Units

We have previously granted performance share units under the 2011 Plan 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"). Our existing Performance Share Units are subject to continued service through the period dictated by the award and certification by the Compensation Committee of the Board that the specified performance conditions have been achieved.

The table below summarizes Performance Share Unit activity under the 2011 Plan for the nine months ended September 30, 2023:


	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2022	17,269	$	24.13
Granted	482,991	13.31
Vested	(17,269)	24.13
Forfeited	—	—
Unvested at September 30, 2023	482,991	$	13.31

As of September 30, 2023, $4.2 million of unrecognized compensation costs related to unvested Performance Share Units are expected to be recognized over a remaining weighted-average period of 0.58 years.