In October 2012, the Company adopted the 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan, employees and non-employees could be granted stock options, RSUs and other stock-based awards, including awards earned in connection with the Agent Equity Program. Generally, these awards were based on stock agreements with a maximum ten-year term for stock options and a maximum seven-year term for RSUs, subject to board approval.

In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Equity Incentive Plan (the “2021 Plan”), with an initial pool of 29.7 million shares of common stock available for granting stock-based awards plus any reserved shares of common stock not issued or subject to outstanding awards granted under the 2012 Plan. In addition, on January 1st of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the 2021 Plan shall be increased automatically by the number of shares equal to 5% of the total number of outstanding shares of common stock and outstanding shares of preferred stock (on an as converted to common stock basis) on the immediately preceding December 31st, although the Company’s board of directors or one of its committees may reduce the amount of such increase in any particular year. The 2021 Plan became effective on March 30, 2021 and as of that date, the Company ceased granting new awards under the 2012 Plan and all remaining shares available under the 2012 Plan were transferred to the 2021 Plan. As of December 31, 2023, there were 48.6 million shares available for future grants under the 2021 Plan, inclusive of those shares transferred from the 2012 Plan. Effective January 1, 2024, the shares available for future grants were increased by an additional 24.2 million shares as a result of the annual increase provision described above.

In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Employee Stock Purchase Plan (the “ESPP”), with an initial pool of 7.4 million shares of Class A common stock available for authorized purchase rights to the Company’s employees or to employees of its designated affiliates. In addition, on January 1st of each

year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the ESPP shall be increased automatically by the number of shares equal to 1% of the total number of outstanding shares of common stock and outstanding shares of preferred stock (on an as converted to common stock basis) on the immediately preceding December 31st, although the Company’s board of directors or one of its committees may reduce the amount of the increase in any particular year. No more than 150.0 million shares of common stock may be issued over the term of the ESPP, subject to certain exceptions set forth in the ESPP. As of December 31, 2023, 14.1 million shares of Class A common stock remain available for grant under the ESPP. Effective January 1, 2024, the authorized shares increased by 4.7 million shares as a result of the annual increase provision described above.

The ESPP permits employees to purchase shares of the Company’s Class A common stock through payroll deductions accumulated during six-month offering periods up to a maximum value of $12,500 per offering period. The offering periods begin each February and August, or such other period determined by the Compensation Committee. On each purchase date, eligible employees may purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP. During the year ended December 31, 2023, the Company issued 0.8 million shares of Class A common stock under the ESPP.

The Company recognized $1.3 million and $2.1 million of stock-based compensation expense related to the ESPP during the years ended December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023 and 2022, $1.0 million and $1.3 million, respectively had been withheld on behalf of employees for a future purchase under the ESPP.

The fair value of each stock option award is estimated on the grant date using the Black-Scholes option pricing model. For the year ended December 31, 2023, stock options granted were not material to the Company's financial statements. For the years ended December 31, 2022 and 2021, the table below demonstrates the inputs used for options granted.


	Year Ended December 31,
	2022			2021
Expected term (in years)	6.2			6.3
Risk-free interest rate	3.0		%	0.9		%
Expected volatility	50.5		%	49.3		%
Dividend rate	—		%	—		%
Fair value of common stock (range for the period)	$2.33 - $8.25			$8.80 - $18.00
Weighted average grant date fair value of options granted	$	2.31		$	8.68

Expected Term — The expected term represents the period that the stock-based awards are expected to be outstanding. The Company uses the simplified method to calculate the expected term due to insufficient historical experience, which assumes a ratable rate of exercise over the contractual term.

Expected Volatility — As a result of the lack of historical and implied volatility data of the Company’s common stock prior to the IPO, the expected stock price volatility has been estimated based on the historical volatilities of a specified group of companies in its industry for a period equal to the expected life of the option. The Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, and position

Fair Value of Common Stock — Prior to the IPO, the fair value of the shares of common stock underlying stock options and RSUs were historically determined by the board of directors as there was no public market for the common stock. The board of directors determined the fair value of the Company’s common stock by considering a number of objective and subjective factors including: the valuation of comparable companies, sales of convertible preferred stock to unrelated third parties, the Company’s operating and financial performance, secondary transactions involving the Company’s common stock, the lack of liquidity of common stock and general and industry specific economic outlook, amongst other factors.


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contract Term (in years)	Aggregate Intrinsic Value (1)
Balance as of December 31, 2022	46,694,237	$	5.44	5.9	$	8.5
Granted	257,286	3.62
Exercised	(2,963,701)	1.52
Forfeited	(3,459,974)	6.74
Balance as of December 31, 2023	40,527,848	$	5.60	5.1	$	20.2
Exercisable and vested at December 31, 2023	35,844,208	$	5.20	4.8	$	20.1

Stock-based compensation recognized during the years ended December 31, 2023, 2022 and 2021 associated with stock options was $25.6 million, $35.2 million and $46.5 million, respectively. As of December 31, 2023, unrecognized compensation costs totaled $31.4 million and are expected to be recognized over a weighted-average period of 1.8 years.

(1)During the year ended December 31, 2023, the Company net settled all RSUs through which it issued an aggregate of 35.9 million shares of Class A common stock and withheld an aggregate of 7.6 million shares of Class A common stock to satisfy $23.5 million of tax withholding obligations on behalf of the Company’s employees.

(2)Included in forfeited shares are 17.2 million performance based RSUs previously held by the Company’s Chief Executive Officer that were cancelled in connection with changes made to the CEO's compensation package in December 2023. The cancellation of these awards was accounted for as a modification and is not expected to have a material impact on the Company's statements of operations.

In connection with the 2021 Agent Equity Program, the Company recognized a total of $100.0 million in stock-based compensation expense of which $84.8 million was recognized during the year ended December 31, 2021 and $15.2 million was recognized during the year ended December 31, 2022. In February 2022, the Company granted 13.6 million RSUs, which immediately vested and converted to Class A common stock in connection with the 2021 Agent Equity Program. Prior to the issuance of the underlying RSUs, the stock-based compensation expense associated with these awards was recorded as a liability and $100.0 million was ultimately reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs were granted.

In connection with the 2022 Agent Equity Program, the Company recognized a total of $53.3 million stock-based compensation expense of which $41.7 million was recognized during the year ended the year ended December 31, 2022 and $11.6 million was recognized during the year ended December 31, 2023. In January 2023, the Company granted 14.1 million RSUs to affiliated agents in connection with the 2022 Agent Equity Program. Prior to the issuance of the underlying RSUs, the stock-based compensation expense associated with these awards was recorded as a liability and $53.3 million was ultimately reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs were granted. Following the issuance of these RSUs, the Company discontinued the Agent Equity Program.


	Year Ended December 31,
	2023		2022		2021
Commissions and other related expense	$	11.6	$	59.0	$	128.7
Sales and marketing	35.0		42.0		38.4
Operations and support	16.1		15.6		16.9
Research and development	45.7		57.5		92.7
General and administrative	49.8		60.4		109.6
Total stock-based compensation expense	$	158.2	$	234.5	$	386.3

The decrease in stock-based compensation expense in 2023 as compared to 2022 was due to lower headcount resulting from workforce reductions. The decrease in stock-based compensation expense in 2022 as compared to 2021 was almost entirely the result of the required accounting treatment for RSUs which differed before and after the March 31, 2021 effective date of the Company’s IPO. The RSUs outstanding prior to the IPO contained a liquidity-event based vesting condition, in addition to a time-based vesting condition. The liquidity-event based vesting condition did not allow for the recognition of stock based-compensation expense until this condition was satisfied at the time of the IPO. The Company recognized a one-time acceleration of stock-based compensation expense of $148.5 million in connection with the IPO when this liquidity-event based vesting condition was satisfied on March 31, 2021 and recognized additional stock-based compensation expense subsequent to the IPO over the periods that the time-based vesting conditions are satisfied. Stock-