In 2012, the Company’s Board of Directors adopted the 2012 Stock Option and Restricted Stock Incentive Plan (the “2012 Plan”), which provides for the granting of incentive and nonqualified stock options, shares of restricted stock and other equity interests or awards in the Company. The Company only issued time-based vesting awards under the 2012 Plan.

In 2017, the Company’s Board of Directors approved the 2017 Equity Incentive Plan (the “2017 Plan”). No new awards have been issued under the 2012 Plan following the approval of the 2017 Plan. The 2017 Plan provides for the granting of incentive and nonqualified stock options, shares of restricted stock and other equity interests or awards in the Company. The Company issued time-based and performance-based vesting awards under the 2017 Plan.

In 2020, the Company’s Board of Directors approved the 2020 Incentive Award Plan (the “2020 Plan”, together with the 2012 Plan and the 2017 Plan, the “Plans”). The 2020 Plan provides for the granting of incentive and nonqualified stock options, restricted stock units (“RSUs”) and other equity interests or awards in the Company. As of December 31, 2024, the total number of shares available for issuance under the 2020 Plan was 33.9 million shares. There are 10.4 million shares available for issuance under the 2017 Plan, however, we no longer issue awards under the 2017 Plan. There are no securities remaining available for future issuance under the 2012 Plan as this plan has expired pursuant to the terms. The Company issues time-based and performance-based vesting awards under the 2020 Plan.

Also in 2020, the Company’s Board of Directors approved the Employee Stock Purchase Plan, as amended from time to time, (as amended, the “ESPP”). The ESPP permits eligible employees to purchase a number of shares of the Company’s Class A common stock at a price per share that is 85% of the lesser of the fair market value of the shares on the first or last day of the offering period, during offerings periods each year. Employees started contributing to the ESPP in 2024 and no shares have been issued under the plan as of December 31, 2024. As of December 31, 2024, a share reserve established that the aggregate number of shares may not exceed 133.3 million shares under the 2020 Plan and the ESPP.

The Company has historically issued three types of stock-based compensation: time-based awards, long term incentive plan (“LTIP”) awards and performance-based stock compensation plan (“PSP”) awards. Time-based awards are equity awards that tie vesting to length of service with the Company. LTIP awards are performance-based equity awards that are used to establish longer-term performance objectives and incentivize management to meet those objectives. PSP awards are performance-based equity awards which establish performance objectives related to a particular fiscal year. As applicable, certain stock-based compensation awards expire seven to ten years after the grant date.

Time-based awards generally vest over a four-year period in annual and/or quarterly installments and, as applicable, expire no later than ten years from the date of grant. Time-based options are valued using the Black-Scholes option-pricing model with the assumptions noted in the table below. Shares issued from the exercise of options are issued from the available Class A shares available under the Plans. The fair value of time-based RSUs is estimated on the grant date using the underlying share price.

LTIP awards that were granted as RSUs subsequent to 2020 vest based on long-term revenue targets and used the underlying share price on the grant date to estimate their fair value. On and after November 2, 2022, certain DraftKings executives agreed to delay vesting of the third tranche of their restricted stock units granted under a long-term incentive plan and to add a service condition through an extended vesting date. This modification impacts the issuance of approximately 4 million shares of DraftKings Inc.’s Class A common stock, which vested approximately ten months after the performance condition was met.

PSP awards granted in 2024, 2023 and 2022 vest based on achievement of revenue and Adjusted EBITDA targets and have a range of payouts from 0% to 200%. PSP awards granted in 2021 and 2020 vest based on achievement of revenue targets and have a range of payouts from 0% to 300%. As these awards are performance-based RSUs, the fair value is estimated on the grant date using the underlying share price.

The fair value of each option is estimated on the grant date using the Black-Scholes option-pricing model and the assumptions noted in the table below. The fair value is recognized over the requisite service period of the awards, which is generally the vesting period. For awards with only service-based vesting conditions, the Company recognizes compensation cost using the straight-line method. Expected volatility is based on an average volatility for a representative sample of comparable public companies, including the Company. Stock options are generally granted with an exercise price equal to the fair value of the common stock at the grant date with a 10-year contractual term.

The expected term represents the period of time that the options are expected to be outstanding. The Company uses the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted, whereby, the expected term equals the average of the vesting term and the original contractual term of the options. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate is estimated using the rate of return on U.S. treasury notes with a life that approximates the expected life of the option. The fair value of the stock options issued was measured using the following assumptions:


	Year Ended December 31,
	2024		2023		2022
Weighted average risk free interest rate	4.6	%	4.1	%	3.1	%
Weighted average expected term (in years)	3.6		5.9		5.6
Weighted average expected volatility	45.1	%	55.7	%	53.0	%
Weighted average expected dividend yield	0.0	%	0.0	%	0.0	%


	Options	RSUs			Total	Weighted Average Exercise Price of Options		Weighted Average FMV of RSUs		Weighted Average Remaining Term of Options (Years)	Aggregate Intrinsic Value
		Time Based	PSP	LTIP
Outstanding at December 31, 2022	25,684	15,273	13,119	13,864	67,940	$	6.17	$	29.64	5.49	$	192,062
Granted	800	11,629	2,240	209	14,878	29.02		19.55		—	—
Exercised options / vested RSUs	(3,944)	(7,211)	(1,715)	(12,310)	(25,180)	4.16		42.29		—	—
Change in awards due to performance-based multiplier	—	—	1,141	—	1,141	—		60.25		—	—
Forfeited	(285)	(1,810)	(976)	(508)	(3,579)	4.39		21.18		—	—
Outstanding at December 31, 2023	22,255	17,881	13,809	1,255	55,200	$	7.10	$	21.01	4.59	$	645,885
Granted	761	7,789	1,449	—	9,999	31.85		42.48		—	—
Exercised options / vested RSUs	(2,227)	(7,841)	—	(261)	(10,329)	4.17		26.11		—	—
Change in awards due to performance-based multiplier	—	—	—	—	—	—		—		—	—
Forfeited	(14)	(1,576)	(752)	(135)	(2,477)	16.99		23.34		—	—
Outstanding at December 31, 2024	20,775	16,253	14,506	859	52,393	$	8.31	$	23.75	3.70	621,065


	Awards Outstanding	Weighted Average Remaining Term of Options (Years)	Aggregate Intrinsic Value		Weighted Average Exercise Price of Options
Stock options exercisable	20,219	3.5	$	618,573	$	7.45
Stock options remaining to vest	556	9.1	$	2,492	$	39.54

As of December 31, 2024, total unrecognized stock-based compensation cost of $620.1 million related to granted and unvested share-based compensation arrangements that are expected to vest is expected to be recognized over a weighted-average period of 2.5 years. The following table shows stock-based compensation cost for the years ended December 31, 2024, 2023 and 2022:


	Year Ended						Year Ended						Year Ended
	December 31, 2024						December 31, 2023						December 31, 2022
	Options		RSUs		Total(3)		Options		RSUs		Total(3)		Options		RSUs		Total
Time Based (1)	$	13,257	$	193,860	$	207,117	$	10,178	$	183,937	$	194,115	$	15,222	$	103,478	$	118,700
PSP (2)	—		169,832		169,832		—		126,071		126,071		—		90,180		90,180
LTIP (2)	—		4,418		4,418		—		78,277		78,277		—		369,919		369,919
Total	$	13,257	$	368,110	$	381,367	$	10,178	$	388,285	$	398,463	$	15,222	$	563,577	$	578,799

(3) Total expenses includes $17.3 million and $20.2 million of liability-classified awards recorded within accounts payable and accrued liabilities in the consolidated balance sheet as of December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, we capitalized stock-based compensation primarily associated with the development of software for internal-use of $17.8 million.

During the years ended December 31, 2024, 2023 and 2022 the Company received proceeds from the exercise of stock options of $9.2 million, $16.5 million and $8.7 million, respectively, and the aggregate intrinsic value of those stock options exercised was $78.3 million, $101.7 million and $38.1 million, respectively.

The total grant date fair value of stock options that vested during the years ended December 31, 2024, 2023 and 2022 were $13.4 million, $11.1 million and $15.3 million, respectively. The total grant date fair value of RSUs that vested during the years ended December 31, 2024, 2023 and 2022 were $212.7 million, $893.2 million and $511.4 million, respectively.