SHARE-BASED AWARDS

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

2022 Inducement Plan

In July 2022, the independent members of the Company’s Board of Directors adopted the 2022 Inducement Plan (the “Inducement Plan”). Under the Inducement Plan, 31,200,000 shares were initially reserved for issuance. The purpose of the Inducement Plan is to attract, retain and motivate new employees of the Company, particularly executive team members and

employees joining as part of business combinations. The Inducement Plan allows for the issuance of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and other stock or cash based awards to prospective employees of the Company or any subsidiary of the Company.

Stock options and RSUs

Option awards are generally granted with an exercise price equal to the fair value of the Company’s common stock at the date of grant. Options are exercisable over a maximum term of 10 years from the date of grant and generally vest over a period of four years. Incentive stock options granted to a 10% shareholder are exercisable over a maximum term of five years from the date of grant.

A summary of the stock option activity for the nine months ended September 30, 2022, is as follows:


	Number of Options (in thousands)	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Balance-December 31, 2021	14,546	$	2.12	4.7	$	182
Granted	—	—
Exercised	(2,892)	1.36
Forfeited	(344)	4.08
Expired	(227)	0.77
Balance-September 30, 2022	11,083	$	2.28	3.9	$	13
Exercisable-September 30, 2022	10,824	$	2.13	3.8	$	13

Prior to 2021, certain awards also had a performance condition to vesting, which was satisfied upon completion of the February 2021 Offering and triggered the recognition of compensation expense for certain RSUs for which the time-based vesting condition had been satisfied or partially satisfied. Subsequent to the February 2021 Offering, these RSUs are only subject to time-based vesting conditions.

A summary of the RSU activity for the nine months ended September 30, 2022, is as follows:


	Number of RSUs (in thousands)	Weighted- Average Grant-Date Fair Value
Unvested and outstanding-December 31, 2021	53,446	$	17.35
Granted	28,735	6.80
Vested	(12,958)	11.85
Forfeited	(6,894)	12.46
Unvested and outstanding-September 30, 2022	62,329	$	14.17

Restricted Shares

The Company has granted Restricted Shares to certain continuing employees, primarily in connection with acquisitions. The Restricted Shares vest upon satisfaction of a service condition, which generally ranges from three to four years.

A summary of the Restricted Shares activity for the nine months ended September 30, 2022 is as follows:


	Number of Restricted Shares (in thousands)	Average Grant-Date Fair Value
Unvested-December 31, 2021	692	$	3.91

Vested	(138)	3.02
Forfeited	(69)	3.02
Unvested-September 30, 2022	485	$	4.29

ESPP

The first offering period for the Company's 2020 ESPP began on March 1, 2022. The ESPP, pursuant to Internal Revenue Code Section 423, allows eligible participants to purchase shares using payroll deductions of up to 15% of their total compensation, subject to a $25,000 calendar year limitation on contributions. The Company has limited the maximum number of shares to be purchased in an offering period to 1,000 shares per employee. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a 15% discount on the lower price of either (i) the offer period start date or (ii) the purchase date. Each offering period is six months in duration. ESPP employee payroll contributions withheld as of September 30, 2022 were $1 million and are included within Accounts payable and other accrued liabilities in the condensed consolidated balance sheets. Payroll contributions withheld as of September 30, 2022 will be used to purchase shares at the end of the current ESPP purchase period ending on February 28, 2023.

The fair value of ESPP purchase rights is estimated at the date of grant using the Black-Scholes option-pricing valuation model. The following assumptions were applied in the model to estimate the grant-date fair value of the ESPP.


	Offering Period
	September 1, 2022 - February 28, 2023			March 1, 2022 - August 31, 2022
Fair value	$	1.78		$	3.55
Volatility	94.5		%	101.4		%
Risk-free rate	3.34		%	0.60		%
Expected life (in years)	0.5			0.5
Expected dividend	$	—		$	—

The Company recognized stock-based compensation expense related to the ESPP of $1 million and $2 million during the three and nine months ended September 30, 2022, respectively. As of September 30, 2022, total estimated unrecognized compensation expense related to the ESPP was $1 million. That cost is expected to be recognized over the remaining term of the offering period of 5 months.

Stock-based compensation expense

Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. The following table summarizes total stock-based compensation expense by function as presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021, as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
General and administrative	$	38	$	52	$	132	$	405
Sales, marketing and operations	5		2		14		10
Technology and development	9		8		32		50
Total stock-based compensation expense	$	52	$	62	$	178	$	465

During the nine months ended September 30, 2022, no market condition awards satisfied their market condition.

As of September 30, 2022, there was $547 million of unamortized stock-based compensation costs related to unvested RSUs, stock options, and Restricted Shares. The unamortized compensation costs are expected to be recognized over a weighted-average period of approximately 2.4 years.