In March 2021, the Company’s board of directors adopted, and the stockholders approved, the 2021 Equity Incentive Plan. The 2021 Equity Incentive Plan is a successor to and continuation of the 2013 Stock Plan. The 2021 Equity Incentive Plan became effective on the date of the IPO with no further grants being made under the 2013 Stock Plan, however, awards outstanding under our 2013 Stock Plan will continue to be governed by their existing terms. The 2021 Equity Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units awards (“RSUs”), performance awards, and other awards to employees, directors, and consultants up to an aggregate of 30,930,000 shares of common stock. Shares issued pursuant to the exercise of these awards are transferable by the holder. Amounts paid by economic interest holders in excess of fair value are recorded as stock-based compensation (see Note 14).

Stock options granted have a maximum term of ten years from the grant date, are exercisable upon vesting and vest over a period of four years. Stock option activity for the year ended December 31, 2021 was as follows:


	Number of Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Life in Years	Aggregate Intrinsic Value
Outstanding at January 1, 2021	16,933,494	$	6.73	8.44	$	596,767

Exercised	(3,704,250)	4.96
Forfeited or cancelled	(795,085)	7.87
Outstanding at December 31, 2021	12,434,159	7.19		7.64	909,494
Vested and exercisable at December 31, 2021	6,245,987	5.83		7.22	465,348
Vested and unvested expected to vest at December 31, 2021	10,694,123	$	6.81	7.55	$	786,229

The aggregate intrinsic value represents the difference between the fair value of common stock and the exercise price of outstanding in-the-money options. The aggregate intrinsic value of exercised options for the years ended December 31, 2021, 2020, and 2019 was $189,422, $23,018, and $10,361, respectively.

There were no stock options issued for the year ended December 31, 2021. The following weighted-average assumptions were used to estimate the grant date fair value of stock options as of December 31, 2020:

The weighted-average grant date fair value of options granted to participants during the years ended December 31, 2020 and 2019 was $10.01 and 2.62, respectively. No options were granted during the year ended December 31, 2021. The aggregate estimated fair value of stock options granted to participants that vested during the years ended December 31, 2021, 2020, and 2019 was $22,395, $9,810, and $6,338, respectively.

As of December 31, 2021, there was $28,609 of unrecognized stock-based compensation expense related to outstanding stock options granted that is expected to be recognized over a weighted-average period of 2.44 years.

RSUs granted vest over four years. RSU activity for the year ended December 31, 2021 was as follows:


	Shares	Weighted-Average Fair Value
Unvested balance at January 1, 2021	413,750	$	13.69
Granted	3,253,645	48.68
Vested	(152,903)	24.60
Forfeited or cancelled	(180,355)	43.33
Unvested balance at December 31, 2021	3,334,137	45.74
Vested and expected to vest at December 31, 2021	2,135,576	$	45.74

As of December 31, 2021, there was $78,268 of unrecognized stock-based compensation expense related to outstanding RSUs granted that is expected to be recognized over a weighted-average period of 3.20 years.

The Company issued performance-based restricted stock units (“PRSUs”) which will vest based on the achievement of each award’s established performance targets. PRSU activity for the year ended December 31, 2021 was as follows:

At the end of each reporting period, the Company will adjust compensation expense for the PRSUs based on its best estimate of attainment of the below specified performance metrics. The cumulative effect on current and prior periods of a change in the estimated number of PRSUs that are expected to be earned during the performance period will be recognized as an adjustment to earnings in the period of the revision.

Compensation cost in connection with the probable number of shares that will vest will be recognized using the accelerated attribution method. As of December 31, 2021, the Company determined that it was probable that the LTIP PRSUs (defined below) and the other PRSU awards would vest, resulting in $7,894 of unrecognized stock-based compensation that is expected to be recognized over a weighted-average period of 1.0 years.

On June 10, 2021, the Company granted PRSUs to certain executives of the Company (the “LTIP PRSUs”). A percentage of the PRSUs will become eligible to vest based on the Company’s financial performance level for fiscal year 2021 (the “Performance Period”). The financial performance level is determined as the percentage equal to the sum of the revenue growth percentage (percentage increase in revenue from fiscal year 2020 to fiscal year 2021) and profitability percentage (adjusted EBITDA margin minus capital expenditures as a percentage of revenue). Capital expenditures includes purchases of intangible assets, seller financed equipment purchases and acquisition of property and equipment from capital leases.

Assuming the minimum performance target is achieved, one-third of the aggregate number of LTIP PRSUs shall vest in 2022 on the later of (i) March 1, 2022 or (ii) two trading days following the public release of the Company’s 2021 financial results, and the remainder shall vest in eight equal quarterly installments subject, in each case, to the individual’s continuous service through the applicable vesting date.

On July 27, 2021, the board of directors of the Company granted a market-based restricted stock unit (“MRSU”) award to the Company’s Chief Executive Officer, Yancey Spruill (the “CEO Performance Award”).

The CEO Performance Award consists of an MRSU award under the Company’s 2021 Equity Incentive Plan for 3,000,000 shares of the Company’s common stock and will vest upon the satisfaction of certain service conditions and the achievement of certain Company stock price goals, as described below.

The CEO Performance Award will be earned based on the Company’s stock price performance over a seven-year period beginning on the date of grant. The CEO Performance Award, which is estimated to have a grant date fair value of approximately $75,300 derived by using a discrete model based on multiple stock price-paths developed through the use of a Monte Carlo simulation, is divided into five tranches that will be earned based on the achievement of stock price goals, measured based on the average of the Company’s closing stock price over a consecutive ninety (90) trading day period during the performance period as set forth in the table below.

To the extent earned based on the stock price targets set forth above, the CEO Performance Award will vest over a seven-year period beginning on the date of grant in annual amounts equal to 14%, 14%, 14%, 14%, 14%, 15% and 15%, respectively, on each anniversary of the date of grant.

The weighted-average grant date fair value of market-based performance stock units and the related assumptions used in the Monte Carlo simulation to record stock-based compensation for units granted during the periods presented, were as follows:

In March 2021, the Company’s board of directors adopted, and the stockholders approved, the 2021 Employee Stock Purchase Plan, which became effective on the date of the Final Prospectus. The ESPP initially reserved and authorized the issuance of up to a total of 2,200,000 shares of common stock to participating employees.

The initial offering period commenced on the IPO date and will end in May 2022 with two purchase periods, the first of which had a purchase date of November 19, 2021. Eligible employees enrolled in the offering period at the start of each purchase period, whereby they may purchase a number of shares at a price per share equal to 85% of the lesser of (1) the stock price at the employee’s first participation in the offering period or (2) the fair market value of the Company’s common stock on the purchase date.

There were 117,996 shares purchased by employees during the year ended December 31, 2021, net of shares withheld for taxes. As of December 31, 2021, 2,082,004 shares of common stock remain available for issuance under the ESPP.

The fair value of share-based awards for our employee stock option awards was estimated using the Black-Scholes option pricing model. The Company recorded stock compensation under this plan of $3,097 for the year ended December 31, 2021. As of December 31, 2021, $1,495 has been withheld on behalf of employees.

In connection with our acquisition of Nimbella, we issued 200,204 shares of restricted stock for $63.11 per share for a total value of $12,635 to the founders of Nimbella. These shares vest equally on March 1, 2023 and September 1, 2024 and are expensed on a straight line basis over 36 months. The restricted stock is subject to forfeiture and dependent upon each founder’s continuous service on the vesting date. As of December 31, 2021, there was $11,228 of unrecognized stock-based compensation related to outstanding restricted shares granted that is expected to be recognized over a weighted-average period of 2.70 years.


	Year Ended December 31,
	2021		2020		2019
Cost of revenue	$	1,147	$	545	$	1,142
Research and development	23,315		7,765		4,688
Sales and marketing	8,471		1,924		539
General and administrative	28,644		19,222		12,277
Total	$	61,577	$	29,456	$	18,646

Stock-based compensation related to secondary sales of common stock by certain current and former employees for the years ended December 31, 2020 and 2019 was $18,343 and $12,056, respectively. There were no such expenses recorded for the year ended December 31, 2021.