Note 12. Stock-Based Compensation

Equity Incentive Plan

In April 2021, the Company’s board of directors adopted, and in May 2021 its stockholders approved, the 2021 Equity Incentive Plan (the 2021 Plan), which became effective on May 28, 2021.

No further awards are being made under the Company’s 2009 Equity Incentive Plan, as amended (the 2009 Plan) or the Company’s 2018 Stock Incentive Plan (the 2018 Plan); however, awards outstanding under each of the 2009 Plan and 2018 Plan will continue to be governed by their existing terms. With the establishment of the 2021 Plan as further discussed below, upon the expiration, forfeiture, cancellation, or reacquisition of any stock-based awards granted under the 2009 Plan or 2018 Plan, an equal number of shares will become available for grant under the 2021 Plan. The 2021 Plan, 2018 Plan and 2009 Plan are collectively referred to as the “Equity Incentive Plans”.

The 2021 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards and other forms of equity compensation (collectively, equity awards). A total of 19,988,330 shares of the Company’s common stock have been reserved for issuance under the 2021 Plan in addition to (i) any annual automatic evergreen increases in the number of shares of common stock reserved for issuance under the 2021 Plan and (ii) upon the expiration, forfeiture, cancellation, or reacquisition of any stock-based awards granted under the 2009 Plan or 2018 Plan, an equal number of shares of common stock will become available under the 2021 Plan.

As of December 31, 2023, a total of 14,846,817 shares of the Company's common stock were available for future issuance under the 2021 Plan.

Stock Options

Stock options granted under the 2009 Plan, 2018 Plan and the 2021 Plan generally vest based on continued service over four years and expire within ten years from the date of grant. Any options that are canceled or forfeited before expiration become available for future grants.

The aggregate intrinsic value was calculated as the difference between exercise price of the underlying awards and the closing price of the Company’s common stock at December 31, 2023. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2023, 2022 and 2021 was $89.8 million, $56.1 million and $217.7 million, respectively.

The Company did not grant any options to purchase shares of common stock during the year ended December 31, 2023. The weighted average grant-date fair value of stock options granted during the years ended December 31, 2022 and 2021 was $30.08 and $12.59 per share, respectively.

The Company received cash proceeds from the exercise of options to purchase common stock of $10.4 million, $4.7 million and $6.9 million during the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, there was $11.1 million of total unrecognized expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.27 years.

Restricted Stock Awards and Restricted Stock Units

During 2018, the Company granted restricted stock awards to employees under the 2018 Plan. The restricted stock awards vested ratably over a four year period from the date of grant. The fair value of each restricted stock award was the estimated fair value of the common stock on the date of grant. All restricted stock awards were fully vested as of 2022.

Starting in 2021, the Company has awarded restricted stock units to employees and certain non-employee board members under the 2021 Plan. The fair value of each restricted stock unit is estimated based on the fair value of the Company's common stock on the date of the grant. The restricted stock units vest over the requisite service period, which

range between one and four years from the date of the grant, subject to the continued employment of the employees and service of the non-employee board members.

As of December 31, 2023, there was $89.4 million of total unrecognized compensation expense related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.80 years.

Employee Stock Purchase Plan

In April 2021, the Company’s board of directors adopted, and in May 2021 its stockholders approved, the 2021 ESPP, which became effective on May 28, 2021. The ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to "eligible employees". A total of 3,856,785 shares of common stock have been reserved for future issuance under the ESPP, in addition to any annual automatic evergreen increases in the number of shares of common stock reserved for future issuance under the ESPP. The price at which common stock is purchased under the ESPP is equal to 85% of the fair market value of a share of common stock on the first or last day of the offering period, whichever is lower. Eligible employees can contribute the lesser of up to 15% of their eligible compensation or IRS limit. Offering periods are generally 6 months long.

As of December 31, 2023, a total of 3,856,785 shares of the Company's common stock were available for future issuance under the ESPP.

As of December 31, 2023, there was no unrecognized compensation expense related to the ESPP.

Stock-Based Compensation Costs

In February 2021, certain of the Company’s existing investors acquired 1,205,118 outstanding shares of common stock from employees of the Company for a purchase price greater than the fair value of the common stock at the time of the transaction. As a result, the Company recorded $8.4 million in stock-based compensation during the year ended December 31, 2021. The amount recorded as stock-based compensation represents the difference between the price paid and the estimated fair value at the date of the transaction.

On November 6, 2023, the Company entered into a Transition Agreement with its Chief Financial Officer (CFO). In connection with the Transition Agreement, the Company modified its CFO's outstanding stock options and restricted stock units to i) accelerate vesting for nine months from his separation date and ii) extend the exercise period of his stock options from ninety days to one year. To receive these benefits, the CFO has to remain employed through the Transition Date, which is currently expected to be March 31, 2024. As a result of the modification, the Company expects to recognize $1.9 million of additional compensation expense from the execution of the Transition Agreement through March 31, 2024. The Company recognized additional compensation expense of $0.7 million for the year ended December 31,

2023, and expects to recognize the remaining compensation expense of $1.2 during the three months ended March 31, 2024.