The Company’s 2011 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock units ("RSUs"), stock appreciation rights ("SARs") and restricted stock to the Company's employees, directors, consultants, and other service providers of the Company. Immediately prior to the effectiveness of the 2021 Plan, the 2011 Plan was terminated, and no further awards were granted thereunder. All outstanding awards under the 2011 Plan continue to be governed by their existing terms.

The 2021 Equity Incentive Plan (the “2021 Plan”) provides for the grant of RSUs, nonstatutory stock options, restricted stock, SARs, performance units, and performance shares to the Company’s employees, directors, consultants and other service providers. A total of 39,000,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2021 Plan. In addition, the shares reserved for issuance under our 2021 Plan include any shares subject to awards granted under the 2011 Plan in the case of certain occurrences, such as expirations, terminations, exercise and tax-related withholding, or failures to vest. The number of shares available for issuance under the 2021 Plan also include an annual increase of shares, equal to the least of (a) 39,000,000 shares, (b) five percent (5%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s Board may determine. As of December 31, 2023, a total of 47,217,073 shares were reserved for future issuance under the 2021 Plan.

The 2021 Partner Studio Incentive Plan (the “2021 Partner Plan”) provides for the grant of nonstatutory stock options, restricted stock, RSUs, SARs, performance units, and performance shares to individuals or entities engaged by the Company to render bona fide services. A total of 390,000 shares of the Company’s Class A common stock were initially reserved for issuance pursuant to the 2021 Partner Plan. In 2022, the Board reserved an additional 2,000,000 shares of Class A common stock for issuance under the 2021 Partner Plan. As of December 31, 2023, a total of 1,483,999 shares were reserved for future issuance under the 2021 Partner Plan.

The ESPP permits participants to purchase shares of the Company’s Class A common stock through contributions of up to 15% of their eligible compensation. The ESPP provides for consecutive, overlapping 24-month offering periods, during which the contributed amount by the participant will be used to purchase shares of the Company’s Class A common stock at the end of each 6-month purchase period with the purchase price of the shares being 85% of the lower of the fair market value of the Company’s Class A common stock on the first day of an offering period or on the exercise date. No participant may purchase, in any one purchase period, more than 590 shares of Class A common stock, or 3,500 shares of Class A common stock for offering periods commencing on or after May 20, 2023. Participants may end their participation at any time during an offering and will be

A total of 7,800,000 shares of the Company’s Class A common stock were initially reserved for issuance under the ESPP. The number of shares available for issuance under the ESPP also include an annual increase of shares, equal to the least of: (a) 7,800,000 shares, (b) one percent (1%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors may determine. As of December 31, 2023, a total of 14,602,928 shares were reserved for future issuance under the ESPP.

In March 2023, the Company’s Board, upon recommendation of the Compensation Committee of the Board (the "Compensation Committee"), granted to each of Adam Foroughi, the Company’s CEO and Chairperson, and Vasily Shikin, the Company’s CTO, 6,902,000 performance-based RSUs (“PSUs”), and delegated authority to Mr. Foroughi to grant up to additional 3,451,000 PSUs to non-executive employees (the "Additional Participants") in consultation with the chair of the Compensation Committee under the 2021 Plan. The PSUs are divided into five equal tranches that are eligible to vest based on the achievement of certain stock price targets (see below), measured based on the minimum closing price of the Company’s Class A common stock over a consecutive 30 trading day period during the five-year performance period beginning on the date of grant, subject to the recipient’s continued employment through the applicable vesting date. In the event of a change in control of the Company during the performance period, any unvested PSUs are eligible to vest a pro-rated amount if the per share transaction price in the change in control is between two stock price targets that have not previously been achieved, subject to the recipient’s continued employment through the date immediately prior to the change in control. PSUs for Mr. Foroughi and Mr. Shikin may continue to vest for up to one year after termination of employment if certain conditions are met. In April 2023, the remaining 3,451,000 PSUs were granted to the Additional Participants.


		PSUs Eligible to Vest
Company Stock Price Target		Adam Foroughi	Vasily Shikin	Additional Participants (in aggregate)
$	36.00	1,380,400	1,380,400	690,200
$	46.75	1,380,400	1,380,400	690,200
$	57.50	1,380,400	1,380,400	690,200
$	68.25	1,380,400	1,380,400	690,200
$	79.00	1,380,400	1,380,400	690,200
		6,902,000	6,902,000	3,451,000

The Company used a Monte Carlo simulation model to calculate the grant date fair value of the PSUs and the derived service period for each of the five vesting tranches, which is the measure of the expected time to achieve the respective stock price target, as described above. The Monte Carlo simulation model incorporates the likelihood of achieving the stock price targets and requires the input of assumptions including the underlying stock price, expected volatility, risk-free rate and dividend yield. The Company also applied a discount for lack of marketability to the value of PSUs for employees other than the CEO as the shares issued for these awards are subject to a holding period of approximately one year.

The Company recognizes stock-based compensation expense over the derived service period of each of the five vesting tranches, ranging from 1.7 to 3.1 years, using the accelerated attribution method. If the stock price targets are met sooner than the derived service period, the Company will adjust its stock-based compensation expense to reflect the cumulative expense associated with the vested awards. Subject to continued employment of the recipients, the Company will recognize stock-based compensation expense over the derived service period, regardless of whether the stock price targets are achieved. As of December 31, 2023 unrecognized stock-based compensation expense related to the PSU grants was $66.9 million which will be recognized over the remaining derived service period of each unvested tranche. The fair value of PSUs vested as of the vesting dates during the year ended December 31, 2023 was $132.7 million.

In general, the Company's RSUs vest over a service period of 1 or 4 years. As of December 31, 2023, there was $336.1 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.49 years. The fair value of RSUs vested as of the vesting dates during the year ended December 31, 2023 was $403.1 million.


	Number of Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2022	12,715,804	$	6.38	6.8
Granted	31,074	25.55
Exercised	(2,826,105)	7.40
Forfeited	(106,141)	9.43
Balances at December 31, 2023	9,814,632	$	6.11	5.8
Vested and exercisable at December 31, 2023	9,402,839	$	5.87	5.7
Vested and expected to vest at December 31, 2023	8,437,259	$	6.57	6.0

The aggregate intrinsic value of options outstanding as of December 31, 2023 and 2022, was $331.1 million and $63.6 million, respectively. As of December 31, 2023 there was approximately $8.5 million of total unrecognized compensation costs related to unvested options granted, which is expected to be recognized over the weighted-average vesting period of 0.74 years. The total intrinsic value of share options exercised during the years ended December 31, 2023, 2022, and 2021 was $60.1 million, $87.5 million, and $622.1 million, respectively.

Early Exercise of Stock Options—Subject to the Board’s approval, the Plan allows for the early exercise of options granted. Under the terms of the Plan, option holders, upon early exercise, must sign a restricted stock purchase agreement that gives the Company the right to repurchase any unvested shares, at the original exercise price, in the event the optionees’ employment terminates for any reason. The right to exercise options before they are vested does not change existing vesting schedules in any way and the early exercised options may not be sold or transferred before they are vested. The repurchase right lapses over time as the shares vest at the same rate as the original option vesting schedule. The cash amounts received in exchange for these early exercised shares are recorded as a liability on the accompanying balance sheets and reclassified into common stock and additional paid-in-capital as the shares vest. The Company’s right to repurchase these shares lapses by 1/4th of the shares on the 1-year anniversary of the vesting start date and ratably each month over the next 36-months. Shares subject to repurchase as a result of early exercised options were not material as of December 31, 2023 or 2022.

During the years ended December 31, 2021 and 2020, the Company provided financing to certain employees in the form of promissory notes to early exercise stock options. These promissory notes are partially collateralized by shares and in-substance are nonrecourse. For accounting purposes, exercised options via nonrecourse promissory notes are not substantive and are continued to be treated as options. In February 2021, promissory notes issued to executive officers in the amount of $20.9 million were settled through either share repurchase, in the amount of $17.2 million, or cash payment, in the amount of $3.7 million. In connection with the repurchase of shares, the Company accelerated vesting of 60,968 shares of Class A common stock for one of the Company’s officers. The acceleration of vesting was accounted as an option modification with an immaterial impact to the stock-based compensation expense. The Company did not provide this type of financing to employees during the years ended December 31, 2023 and 2022.

As of December 31, 2023 and 2022, the Company had 1,399,999 and 1,399,999 shares of Class A common stock options, respectively, that were exercised via nonrecourse promissory notes of which 19,479 and 43,855 shares, respectively, were unvested and subject to repurchase. The principal balances of nonrecourse promissory notes outstanding amounted to $4.9 million and $4.9 million as of December 31, 2023 and 2022, respectively.