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 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 April 4, 2022.

On June 17, 2022, at the Annual Meeting of Stockholders, the shareholders authorized an increase of 5,000,000 shares that may be issued under the Plan creating a total of 14,300,000 shares available for grant under the Plan and the 2018 Plan. On October 21, 2022, a special meeting of stockholders was held to increase the number of shares issuable under the Plan by 4,000,000 shares. As of June 30, 2023, there are 3,965,756 shares available for grant.

A summary of stock option activity for the period ended June 30, 2023 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, 2022		10,612,231		$	7.25		8.09	$	39,004,141
Granted		3,027,974			10.07
Exercised		(657,902	)		1.97
Settled		—			—
Expired/Forfeited		(832,960	)		10.33
Outstanding as of June 30, 2023		12,149,343		$	8.03		8.15	$	41,642,102
Exercisable as of June 30, 2023		906,865		$	2.83		5.15	$	7,683,858

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 was $8.1 million and $15.2 million for the three and six months ended June 30, 2023, respectively, and $2.7 million and $4.2 million for the three and six months ended June 30, 2022, respectively. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of June 30, 2023 was $7.1 million and is expected to be recognized over a weighted average period of 3.39 years. Any future forfeitures will impact this amount.

The weighted average assumptions used in calculating the fair value of stock options granted during the six months ended June 30, 2023 and June 30, 2022 were as follows:


	For the Six Months Ended June 30,
	2023			2022
Expected life	7.5 (yrs)			7.5 (yrs)
Expected volatility		38.60	%		35.40	%
Risk-free interest rate		4.07	%		1.98	%
Expected dividend yield		1.20	%		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, 2022		33,346	$	12.37
Granted		—		—
Vested		—		—
Forfeited		—		—
Outstanding as of June 30, 2023		33,346	$	12.37

The Company has granted restricted stock units ("RSUs") to certain employees. Holders of RSUs have no voting rights and are not eligible to receive dividends or other distributions paid with respect to any RSUs that have not vested. All of the shares currently vest one year from the grant date excluding the restricted stock units at Hark and Bonaccord which are discussed in more detail below.

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 pursuant to which an aggregate a value of $17.5 million of units may vest at each future achievement of performance metrics. As of June 30, 2023, certain performance metrics have been met and 348,931 units have been issued to specific employees. The Company evaluates whether it is probable that the Bonaccord Units will vest and applies the tranche method to determine the amount of expense to recognized during the period. An expense of $1.6 million and $5.2 million has been recorded for the three and six months ended June 30, 2023, respectively, on the Consolidated Statements of Operations. The unrecognized expense associated with the Bonaccord Units was $5.3 million as of June 30, 2023.

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 June 30, 2023, all Hark Units have vested and been issued. An expense of $0.3 million has been recorded for the three and six months ended June 30, 2023 on the Consolidated Statements of Operations.

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, 2022		508,135		$	11.34
Granted		1,273,209			10.01
Vested		(875,001	)		11.43
Forfeited		—			—
Outstanding as of June 30, 2023		906,343		$	10.01