The Company recognized stock-based compensation costs and costs relating to liability awards for the fiscal years ended June 30, 2022, 2021, and 2020 of $71,376, $3,983, and $7,961 respectively. Related income tax benefits recognized were $4,352, $43 and $536 for the fiscal years ended June 30, 2022, 2021, and 2020.

Prior to the Apax Acquisition, the Company had issued stock-based compensation awards to employees and outside directors under a plan that provided for the granting of stock options, stock appreciation rights, restricted stock, restricted share units, incentive stock options and other stock-based awards to attract and retain directors, consultants and employees. As part of the Apax Acquisition, vested awards were settled after the closing date at fair value. Unvested awards were cancelled and replaced with cash-based liability awards. Under the terms of the new awards, 50% of the unvested awards were accelerated to vest as of the Apax Acquisition and were paid after the closing date. The remaining 50% of unvested awards are earned and paid to holders according to the vesting dates of the replacement awards. During the fiscal years ended June 30, 2022, 2021, and 2020, $—, $11,605, and $8,957 was paid, respectively.

The Company accounted for the cancellation and replacement of the unvested stock-based compensation awards as a modification, as the classification of the awards was changed from equity to a liability. This modification required an assessment of the fair value of the replacement awards based upon the settlement value. The settlement value of the unvested awards was allocated between the Apax Acquisition purchase price and future compensation expense based upon the pre-acquisition service as a percentage of the greater of the total service period or the original service period of the acquiree’s replaced award. Amounts allocated for future compensation are recognized as compensation costs over the remaining requisite service period and are recorded to general and administrative expense on the consolidated statement of operations.

Subsequent to the Apax Acquisition, the Company established three stock-based compensation plans (the “2019 Plans”) which provided for grants of incentive units to persons who are associates, officers or directors of the Company or any of its subsidiaries. The 2019 Plans included two cash Long Term Incentive Plans (“LTIPs”) and the Pride Aggregator, L.P. Management Equity Plan (“MEP”).

The Company has granted LTIP Units under its Pride Aggregator, L.P. Top Talent Incentive Plan and Sales Top Talent Incentive Plan (“LTIP Participants”). The LTIP Units are phantom awards providing for, at the Company’s discretion, a cash or stock payment (“LTIP Payment”) to participants on certain determination dates, if an IPO occurs and if the LTIP Participant remains employed by the Company on such date. An IPO transaction results in a determination date, for which each LTIP Participant becomes entitled to an LTIP Payment with respect to 20% of the LTIP Participant’s LTIP Units as of the IPO date and 20% on each of four subsequent determination dates six, twelve, eighteen and 24 months following the IPO date. The LTIP Payment is calculated based on the average closing price per IPO Company share for the 10-day trading period ending on the day prior to the applicable payment date. Units of both LTIP plans vest only upon a liquidity event and therefore no compensation expense was recognized for any fiscal year prior to the Company’s IPO.

In connection with the Company’s IPO, the LTIP Units converted to 1,761,578 RSUs, of which 20% of the aggregate dollar value vested upon conversion and was recognized as compensation expense. The remaining aggregate dollar value is being recognized as compensation expense over the requisite two-year service period relating to the LTIP units.

Under the terms of the Company’s MEP, one-half of the MEP incentive units vest based on an associate’s service time. Vesting for the second half of the MEP incentive units is established based on the Company’s performance relative to Apax’s original invested amount, with the performance calculations defined in the plan triggered by the Company’s IPO (implied performance condition). The MEP incentive units are subject to a floor amount established at the grant date, which acts as a participation threshold and permits the award to participate in distributions only to the extent the distribution amount for the units exceed the floor amount. The Company estimated the fair value of the MEP incentive units using the Monte Carlo simulation method.

The MEP time-based incentive units vest 25% on the first anniversary after the vesting commencement date and thereafter in twelve equal installments on each subsequent quarterly anniversary of the vesting commencement date, with 100% vesting of the MEP time-based incentive units occurring on the fourth anniversary of the vesting commencement date. The MEP time-based incentive units are accounted for as equity awards and the compensation expense calculated based upon the fair market value of the MEP time-based incentive units at the grant date is recognized as the MEP time-based incentive units vest.

As a result of the Company’s IPO, and due to an election by Apax, the MEP performance-based incentive units converted to time-based incentive units (“Modified MEP Incentive Units”), with 25% vesting upon successive six month anniversary dates for the 24 months beginning on the date of the IPO. The conversion was treated as a modification for accounting purposes, and accordingly, the Company estimated fair value as of the modification date.

The Modified MEP Incentive Units are accounted for as equity awards and the compensation expense calculated based upon the fair value of the Modified MEP Incentive Units at the modification date is recognized as the Modified MEP Incentive Units vest. The Company estimated the fair value of the Modified MEP Incentive Units based upon the IPO Price adjusted for a floor amount established at the grant date and other liquidation preferences in accordance with the terms of the MEP.

Key inputs and assumptions used to estimate the fair value of the MEP time-based incentive units include the exercise price, the option term, the risk-free interest rate over the option’s expected term, and the expected volatility. The Company’s expected stock price volatility assumption was determined based upon the historical volatility of publicly traded companies similar in nature to the Company. The risk-free interest rate is based on the market yield for a U.S. Treasury security over the expected life. The expected life of the MEP incentive units was an estimated time to a liquidity event. Estimates of fair value are not intended to predict actual future events or the value realized by persons who receive option awards. The assumptions used in the Monte Carlo simulation method are set forth in the following table.


			Time-Based Incentive Units
Expected volatility range of stock			60.0%–65.0%
Expected life of option, range in years			0.67–0.75
Risk-free interest range rate			0.09%–0.12%
Expected dividend yield on stock			0%


	Time-Based Incentive Units					Modified MEP Incentive Units
In thousands, except unit and per unit data	Number of Units	Weighted Average Floor Price		Weighted Average Fair Value		Number of Units	Weighted Average Floor Price		Weighted Average Fair Value



Outstanding at June 30, 2021	38,079	$	578	$	442	36,879	$	593	$	379
Granted	—	—		—		—	—		—
Forfeited	(1,023)	1,131		406		(2,144)	665		1,346
Outstanding at June 30, 2022	37,056	$	563	$	443	34,735	$	589	$	1,423

As of June 30, 2022, there was $3,619 of unrecognized compensation expense for the unvested time-based incentive units that will be recognized over a weighted average period of 1.3 years. At June 30, 2022 and 2021, the number of vested time-based incentive units were 19,965 and 10,142, respectively. The weighted average grant date fair value of time-based incentive units that vested during the fiscal years ended June 30, 2022 and 2021 was $417 and $445, respectively.

As of June 30, 2022, the unrecognized compensation expense related to the unvested Modified MEP Incentive Units was $26,201 that will be recognized over a weighted average period of 1.1 years. At June 30, 2022 and 2021, the number of vested Modified MEP Incentive Units were 9,009 and —, respectively. The weighted average grant date fair value of the Modified MEP Incentive Units vested during the fiscal years ended June 30, 2022 and 2021 was $1,428 and $—, respectively.

On July 20, 2021, the Company adopted the 2021 Omnibus Incentive Plan (the “2021 Plan”). The Company has reserved 13,800,000 shares of common stock for future issuance under the 2021 Plan pursuant to which employees, consultants and directors of the Company and its affiliates performing services for the Company, including the Company’s executive officers, are eligible to receive awards. The 2021 Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards intended to align the interests of participants with those of the Company’s shareholders.

In connection with the Company’s IPO, the Company granted awards under the 2021 Plan to certain executives consisting of 1,135,144 options to purchase shares of its common stock. Additionally, options were granted in October 2021 in connection with the Company’s annual grant and in April 2022. All stock options are non-qualified stock options and expire on the tenth anniversary of the grant date. The following table summarizes option activity for the fiscal year ended June 30, 2022:


In thousands, except unit and per unit data	Options Outstanding	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding at June 30, 2021	—	$	—	$	—	—	$	—
Granted	1,159,520	23.17		9.45		9.07	—
Exercised	—	—		—		—	—
Forfeited and cancelled	(46,741)	23.00		9.36		—	—
Outstanding at June 30, 2022	1,112,779	$	23.18	$	9.45	9.07	$	3,265
Exercisable as of June 30, 2022	—	$	—	$	—	—	$	—

None of the stock options were exercised during the period ended June 30, 2022. Total unrecognized compensation cost related to the unvested stock options is $7,281, which is expected to be recognized over a weighted average period of 2.1 years.


Weighted average exercise price per option			$23.00 - $35.16
Expected volatility range of stock			42.5%
Expected life of option (in years)			5.85
Risk-free interest rate			0.81% - 2.41%
Expected dividend yield on stock			0%
Fair value per option			$9.36 - $14.51

The expected option life represents the period of time the stock options are expected to be outstanding and is based on the “simplified method” allowed under SEC guidance. The Company used the “simplified method” due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. The expected volatility was based on an implied volatility calculation for the Company that closely approximated the average historical and implied volatility of the Company’s peer group since the Company had either limited or no publicly traded stock history as of the grant date. The Company does not intend to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero. The risk-free interest rate was based on the U.S. Treasury yield curve at the time of the grant.

The following table summarizes information related to RSUs granted by the Company. These include grants of LTIP Units that were converted to RSUs as described above, as well as grants made in connection with the Company’s IPO and other grants. In connection with the Company’s IPO, the Company primarily granted RSUs to its executives, its independent directors, members of its IPO transaction team and senior employees of the Company.

RSUs that were granted as a result of the conversion of the LTIP Units vest over a two-year period, whereas RSUs that were granted at and subsequent to the time of the Company’s IPO generally vest over a three-year period.


In thousands, except unit and per unit data	Number of Units	Weighted Average Grant Price
Outstanding, unvested at June 30, 2021	—	$	—
Conversion of LTIP Units	1,761,578	27.01
Granted	1,605,666	29.97
Vested	(701,638)	27.04
Forfeited	(260,122)	28.82
Outstanding, unvested grants at June 30, 2022	2,405,484	$	28.78

As of June 30, 2022, total unrecognized compensation expense related to the RSUs is $49,218, which is expected to be recognized over a weighted average period of 1.8 years. The total grant date fair value of RSUs vested during the fiscal years ended June 30, 2022 was $18,971.

On July 20, 2021, the Company adopted the 2021 Employee Stock Purchase Plan (“ESPP”). The Company has reserved 3,100,000 shares of its common stock for future issuance under the ESPP. The ESPP provides eligible employees with a means of acquiring equity in the Company at a discounted price using their own accumulated payroll deductions. Under the terms of the ESPP, employees can elect to have amounts of their annual compensation withheld, up to a maximum set by the Board of Directors, to purchase shares of Company common stock for a purchase price equal to 85% of the lower of the fair market value per share of Company common stock on (i) the offering date or (ii) the respective purchase date.

The ESPP grants participating employees the right to acquire Company common stock in increments of 1% to 10% of eligible pay, with a maximum contribution of $25 of eligible pay, subject to applicable annual Internal Revenue Service limitations. The first offering period of the Company’s ESPP commenced on September 1, 2021 and was four months in duration. Subsequent offering periods will be January 1 through June 30 and July 1 through December 31 of a given year.