On July 20, 2021, the Board of Directors approved the P10 Holdings, Inc. 2021 Stock Incentive Plan (the "Plan"), which replaced the 2018 Incentive Plan ("2018 Plan"), our previously existing equity compensation plan. The Compensation Committee of the Board of Directors may issue equity-based awards including stock options, stock appreciation rights, restricted stock units and restricted stock awards. Options previously granted under the 2018 Plan cliff vest over a period of four or five years. The term of each option is no more than ten years from the date of grant. When the options are exercised, the Board of Directors has the option of issuing shares of common stock or paying a lump sum cash payment on the exercise date equal to the difference between the common stock’s fair market value on the exercise date and the option price. Terms of all future awards will be granted under the Plan, and no additional awards will be granted under the 2018 Plan. Awards granted under the 2018 Plan continue to follow the 2018 Plan.

The 2018 Plan provided for an initial 6,300,000 shares (adjusted for the reverse stock split). The Plan provided for the issuance of 3,000,000 shares available for grant, in addition to those approved in the 2018 Plan for a total of 9,300,000 shares. On June 17, 2022, at the Annual Meeting of Stockholders, the shareholders authorized an additional 5,000,000 of shares from the Plan creating a total of 14,300,000 shares available for grant under the Plan and the 2018 Plan.

On March 15, 2022, the Board of Directors approved the settlement of 1.1 million options from a grantee with a fair market value option price of $11.83, less a negotiated discount of 2.5%, totaling $12.5 million. This was paid on June 15, 2022.

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


						Weighted Average
						Contractual Life		Aggregate
	Number of			Weighted Average		Remaining		Intrinsic Value
	Shares			Exercise Price		(in years)		(whole dollars)

Outstanding as of December 31, 2021		7,095,936		$	3.71		7.45	$	73,156,722
Granted		1,323,733			12.28
Exercised		(41,570	)		4.80
Settled		(1,120,000	)		0.41
Expired/Forfeited		(29,985	)		10.04
Outstanding as of September 30, 2022		7,228,114		$	5.75		7.51	$	37,496,331
Exercisable as of September 30, 2022		320,440		$	3.83		6.04	$	2,144,803

The weighted average assumptions used in calculating the fair value of stock options granted during the nine months ended September 30, 2022 and September 30, 2021 were as follows:


	For the Nine Months Ended September 30,
	2022			2021
Expected life	7.5 (yrs)			7.5 (yrs)
Expected volatility		35.40	%		40.33	%
Risk-free interest rate		1.98	%		1.68	%
Expected dividend yield		0.00	%		0.00	%

The Company has granted restricted stock awards ("RSAs") to certain employees. Holders of RSAs have no voting rights and accrue dividends until vesting with payment being made once they vest. All of the shares currently vest one year from the grant date.


	Number of			Weighted-Average Grant
	RSAs			Date Fair Value Per RSA
Outstanding as of December 31, 2021		36,033		$	11.24
Granted		33,346			12.37
Vested		(26,582	)		11.24
Forfeited		—			—
Outstanding as of September 30, 2022		42,797		$	12.12

At the time of the Bonaccord acquisition, the Company entered into a Notice of Restricted Stock Units with certain employees of Bonaccord for grants of Restricted Stock Units ("Bonaccord Units") to be allocated to employees at a later date for meeting certain performance metrics. The Bonaccord Units may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until it has become vested. On August 16, 2022, allocations were finalized and the Company and employees agreed to a value of $17.5 million worth of units that would vest at each future achievement of performance metrics. As of September 30, 2022, certain performance metrics have been met and 294,820 units have been allocated to specific employees. The Company deemed it probable that at least some of the remaining units would vest. Unvested units are remeasured quarterly against performance metrics as a liability on the Consolidated Balance Sheets and expense is recognized over the expected vesting period. An expense of $3.9 million has been recorded for the three and nine

months ended September 30, 2022 on the Consolidated Statements of Operations. The unrecognized expense associated with the Bonaccord Units was $8.1 million as of September 30, 2022.

At the time of the Hark acquisition, the Company entered into a Notice of Restricted Stock Units with an employee, which grants Restricted Stock Units ("Hark Units") for meeting a certain performance metric. The Hark Units may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until they have become vested. As of September 30, 2022, no Hark Units have vested but the Company believes it is probable that the RSUs will be earned. An expense of $0.6 million has been recorded for the three and nine months ended September 30, 2022 on the Consolidated Statements of Operations. Unvested units are recognized ratably as a liability on the Consolidated Balance Sheets and expense is recognized over the expected vesting period. The unrecognized expense associated with the Hark Units was $0.9 million as of September 30, 2022.

The below table does not include Bonaccord or Hark Units that were issued outside of the Plan, that have not vested and are recorded as a liability.


	Number of			Weighted-Average Grant
	RSUs			Date Fair Value Per RSU
Outstanding as of December 31, 2021		59,654		$	12.74
Granted		802,955			9.03
Vested		(294,820	)		11.12
Forfeited		—			—
Outstanding as of September 30, 2022		567,789		$	9.42

Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is included in compensation and benefits on our Consolidated Statements of Operations. The stock-based compensation expense for the three and nine months ended September 30, 2022 was $7.3 million and $11.5 million and for the three and nine months ended September 30, 2021 was $0.5 million and $1.5 million, respectively. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of September 30, 2022 was $6.4 million and is expected to be recognized over a weighted average period of 2.6 years. Any future forfeitures will impact this amount.