A summary of activity under the equity plans and related information is as follows:


	Options Outstanding							RSUs Outstanding
	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Years)		Number of RSUs
	(in millions)							(in millions)
Balances at December 31, 2021(1)		45		$	0.254	2.5			48
Granted		6		$	2.860				69
Vested		—		$	—				(13	)
Exercised		(1	)	$	0.138				—
Forfeited or cancelled		—		$	—				(24	)
Balances at June 30, 2022		50		$	0.593		3.0		80

(1)

Outstanding restricted stock units (“RSUs”) as of December 31, 2021 include 11 million performance stock units (“PSUs”), which were cancelled in February 2022.

The weighted-average grant date fair value of restricted stock was $1.80 and $1.84 per share for the three and six months ended June 30, 2022, respectively, and $14.55 and $14.91 per share for the three and six months ended June 30, 2021, respectively. As of June 30, 2022, 23 million shares remained available for grant under the Company’s equity incentive plans, including the 2022 Inducement Plan.

On January 31, 2022, Piotr Szulczewski resigned from his position as CEO of the Company. Due to his resignation prior to the second anniversary of the Company’s IPO, Mr. Szulcewski is no longer eligible to vest in his PSUs, and as such, the PSUs were canceled. Consequently, the Company reversed $21 million of previously recognized stock-based compensation expense related to these PSUs in the first quarter of 2022.

In February 2022, Jacqueline Reses resigned from her position as Executive Chair. Upon her resignation, Ms. Reses entered into a consulting agreement with the Company and her PSU award was modified to eliminate the market condition, with only continued service until the expiration of the consulting agreement being the sole vesting condition. Consequently, the Company reversed $3 million of previously recognized stock-based compensation expense upon modification and will recognize the modified fair value of approximately $2 million from the modification date to the expiration date of the consulting agreement, which is May 16, 2023.

In January 2022, the Company’s Board adopted and approved the 2022 Inducement Plan (“2022 Plan). The Company intends that the 2022 Plan be reserved for persons to whom the Company may issue securities without stockholder approval as an inducement of employment pursuant to Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market, LLC. The 2022 Plan provides for the award of options, stock appreciation rights, restricted shares, and RSUs of the Company’s Class A common stock to the Company’s employees. Stock-based awards under the 2022 Plan that expire or are forfeited, cancelled, or repurchased generally are returned to the pool of shares of Class A common stock available for issuance under the 2022 Plan.

In May 2022, the Company's Board approved an amendment to the 2022 Plan to increase the 2022 Plan reserve from 12 million to 27 million shares. As of June 30, 2022, 13 million shares under the 2022 Plan remained available for grant.

In January 2022, the Company entered into an employment agreement with Vijay Talwar, as the Company’s new CEO, with employment commencing on February 1, 2022. As an inducement of employment, Mr. Talwar was granted, i) 5 million RSUs with an aggregate grant date fair value of $13 million and ii) options to purchase 6 million shares of the Company’s Class A common stock at an exercise price of $2.86 per share with an aggregate grant date fair value of $12 million. These RSUs and options were granted under the 2022 Plan and will become vested and exercisable, respectively, in periodic installments over a 4-year term, subject to the CEO’s continued employment with the Company. The option award has a term of 10 years.

The fair value of options was estimated using the Black-Scholes option pricing model which takes into account inputs such as the exercise price, the value of the underlying shares as of the grant date, expected term, expected volatility, risk free interest rate, and dividend yield. The fair value of the options was determined using the methods and assumptions discussed below:

A summary of the assumptions used in the Black-Scholes option pricing model to determine the fair value of the options is as follows:


	Black-Scholes
	Assumptions
Expected term (in years)		6.10
Risk free interest rate		1.70	%
Volatility		73.20	%
Dividend yield		—
Estimated fair value per share	$	1.87

Total stock-based compensation expense included in the condensed consolidated statements of operations is as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022			2021
	(in millions)
Cost of revenue	$	3	$	5	$	2		$	10
Sales and marketing		2		3		3			6
Product development		14		14		28			29
General and administrative		10		15		(6	)		29
Total stock-based compensation(1)	$	29	$	37	$	27		$	74

(1)

Total stock-based compensation for the six months ended June 30, 2022 decreased by $47 million compared to the six months ended June 30, 2021 primarily due to forfeitures originating from the resignation of the Company’s former CEO, reductions to the Company’s workforce as part of the Company’s February 2022 Restructuring Plan, and modifications to the Company’s former Executive Chair’s equity awards.

The Company will recognize the remaining $11 million and $252 million of unrecognized stock-based compensation expense over a weighted-average period of approximately 3.6 years and 2.7 years related to options and RSUs, respectively.

The Company’s Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 15% of eligible compensation, subject to caps of $25,000 in any calendar year and 2,500 shares on any purchase date. The ESPP provides for 24-month offering periods, generally beginning in November and May of each year, and each offering period consists of four six-month purchase periods. The initial offering period began on January 1, 2021 and will end in November 2022. During the three and six months ended June 30, 2022 and 2021, fewer than 1 million shares of common stock were purchased under the ESPP in each period for an aggregate amount of $1 million and $3 million, respectively.

On each purchase date, participating employees will purchase Class A common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the first trading day of the applicable offering period, or (ii) the last trading day of each purchase period in the applicable offering period. If the stock price of the Company's Class A common stock on any purchase date in an offering period is lower than the stock price on the enrollment date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period (ESPP reset). During the three and six months ended June 30, 2022, there was an ESPP reset that resulted in an additional expense of approximately $4 million, which is being recognized over an offering period ending May 20, 2024.