The Company approved and adopted the March 11, 2011 Omnibus stock option and award plan (“2011 Plan”), which permits the grant of stock awards to its employees for up to 15,800,000 shares of common stock. Following the Effective Date of 2021 Incentive Award Plan, no additional awards were granted under the 2011 Plan. However, the 2011 Plan will continue to govern outstanding equity awards granted thereunder.

The 2021 Incentive Award Plan (“2021 Plan”) was adopted by the Company’s Board of Directors on October 8, 2021. The 2021 Plan was adopted by the Company’s stockholders on October 19, 2021 and became effective on the date prior to the first date of the effectiveness of the registration statement on Form S-1 filed by the Company. The 2021 Plan authorizes the Company to issue an initial aggregate maximum number of shares of common stock equal to (i) 7,641,979 shares plus (ii) a number of shares that are available for issuance under the 2011 Plan plus (iii) any shares that are subject to 2011 Plan that become available for issuance (via expiration, forfeitures, etc.) plus (iv) an increase commencing on January 1, 2022 and continuing annually on the anniversary thereof through January 1, 2031, equal to the lesser of (a) 5% of the shares of all classes of the Company’s common stock outstanding on the last day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s Board or the committee. As of December 31, 2021, the Company had reserved 6,983,649 common stocks for future grant.

The Employee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors on October 8, 2021. The 2021 Plan was adopted by the Company’s stockholders on October 19, 2021 and became effective on the date prior to the first date of the effectiveness of the registration statement on Form S-1 filed by the Company. The ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 1,329,040 shares of the Company’s common stock. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and ending on January 1, 2031, by the lesser of 1% of all classes of the Company’s common stock outstanding on the immediately preceding December 31, or such smaller number of shares as determined by the Company’s Board or the committee. As of December 31, 2021, no shares have been issued under the ESPP and as such, 1,329,040 shares remained available for issuance.

Option awards under the 2011 and 2021 Plans are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those options generally vest based on one to four years of continuous service and have ten-year contractual terms. There were 3,467,069, 1,723,750 and 676,500 options granted during the years ended December 31, 2021, 2020 and 2019.

The time-based stock options vest in equal installments each year from one to four years. The performance-based options are eligible to vest in equal installments each year subject to the individual meeting certain sales targets.

The Company received cash in the amount of $445, $1,780 and $115 from the exercise of stock options for the years ended December 31, 2021, 2020 and 2019, respectively. The tax benefit from equity options exercised were $93, $409 and $26 for the years ended December 31, 2021, 2020 and 2019, respectively.

During 2019, the Company granted certain employees and contractors of the Company an aggregate of 676,500 time-based options at a weighted average strike price of $6.26.

During 2020, the Company granted certain employees and contractors of the Company an aggregate of 1,723,750 options at a weighted average strike price of $6.38. Of the options granted, there were time-based options and performance-based options, which vest upon achievement of the sales performance milestone.

During 2021, the Company granted certain employees, directors and contractors of the Company an aggregate of 3,467,069 options at a weighted average strike price of $14.63. All options granted in 2021 were time-based options.

The following summarizes the Company’s stock option plan and the activity under the 2011 and 2021 Plans for the year ended December 31, 2021:


	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Outstanding December 31, 2020		4,759,530		$	4.55		7.84
Granted		3,467,069			14.63
Exercised		(236,706	)		1.88
Forfeited or expired		(36,875	)		5.89
Outstanding December 31, 2021		7,953,018		$	9.02		8.16
Exercisable December 31, 2021		3,497,825		$	4.22		6.48
Vested and expected to vest at December 31, 2021		7,953,018		$	9.02		8.16

The aggregate intrinsic value of options outstanding at December 31, 2021 is $68,980. The aggregate intrinsic value of vested and exercisable options at December 31, 2021 is $47,105. The aggregate intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 is $3,743, $1,816 and $8, respectively. The weighted average fair value of options granted in 2021, 2020 and 2019 was $7.57, $3.24 and $2.93, respectively, on the dates of grant.

As of December 31, 2021, there was approximately $27,018 total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 3.13 years.

Below are the assumptions used for the years ended December 31, 2021, 2020 and 2019 in determining the fair value of each option award:


	Year Ended December 31,
	2021		2020		2019
Expected volatility	52% - 55%		51% - 56%		46-49%
Expected dividends		—		—		—
Expected term (in years)	5.75 - 6.25		5.75 - 6.0		5.75
Risk-free rate	0.47% - 1.20%		0.35% - 1.66%		1.73-2.53%

RSUs granted under the 2021 Plan have a ten-year contractual term and typically vest over a three-year period, contingent upon continued service with the Company. During 2021, the Company granted certain Board of Directors of the Company an aggregate of 79,886 RSUs. None were granted in 2020 and 2019. All RSUs granted in 2021 were time-based awards. RSU activity under the 2021 Plan is as follows for the year ended December 31, 2021:


	Equity Option Awards		Weighted- Average Grant-Date Fair value per Unit
Nonvested as of December 31, 2020		—	$	—
Granted		79,886		18.84
Vested		—		—
Forfeited		—		—
Nonvested as of December 31, 2021		79,886	$	18.84

The grant date fair value for RSU is the market price of the common stock on the date of grant. The total fair value of RSUs vested during 2021, 2020 and 2019 was $0 for all years.

As of December 31, 2021, there was approximately $1,420 total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of 2.84 years.

Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive (Loss) Income. During the years ended December 31, 2021, 2020 and 2019, the Company recognized $4,863, $1,808, and $1,754 respectively, of compensation expense related to stock options. During the years ended December 31, 2021, 2020 and 2019, the Company recognized $85, $0 and $0, respectively, of compensation expense related to RSUs.