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.. On December 9, 2022, a special meeting of stockholders was held to increase the number of shares issuable under the Plan by 4,000,000 shares, resulting in a total of 18,300,000 shares available for grant under the Plan and the 2018 Plan. As of December 31, 2023, there are 1.8 million shares available for grant.

A summary of stock option activity for the years ended December 31, 2023 and December 31, 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		4,948,733			10.90
Exercised		(47,905	)		6.34
Settled		(1,120,000	)		0.41
Expired/Forfeited		(264,533	)		9.73

Outstanding as of December 31, 2022		10,612,231		$	7.25		8.09	$	39,004,141

Exercisable as of December 31, 2022		314,105		$	3.74		5.74	$	2,176,407

Outstanding as of December 31, 2022		10,612,231		$	7.25		8.09	$	39,004,141
Granted		3,825,842			10.12
Exercised		(721,222	)		1.97
Settled		—			—
Expired/Forfeited		(1,001,470	)		10.20
Outstanding as of December 31, 2023		12,715,381		$	8.15		7.82	$	30,872,113
Exercisable as of December 31, 2023		1,683,231		$	6.05		7.30	$	7,019,738

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. Stock option compensation cost is estimated at the grant date based on the fair-value of the award, which is determined using the Black Scholes option valuation model and is recognized as expense ratably over the requisite service period of the award, generally five years. The share price used in the Black Scholes model is based on the trading price of our shares on the public markets. Expected life is based on the vesting period and expiration date of the option. Stock price volatility is estimated based on a group of similar publicly traded companies determined to be most reflective of the expected volatility of the Company due to the nature of operations of these entities. The risk-free rates are based on the U.S. Treasury yield in effect at the time of grant. The dividend yield is based on a $0.0325 per share quarterly dividend. The stock-based compensation expense for stock options was $10.3 million, $3.9 million, and $3.4 million for the years ended December 31, 2023, 2022, and 2021 respectively. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of December 31, 2023 was $7.7 million and is expected to be recognized over a weighted average period of 2.90 years. Any future forfeitures will impact this amount.

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		$	12.49
Granted		33,346			12.37
Vested		(36,033	)		12.49
Forfeited		-			-
Outstanding as of December 31, 2022		33,346			12.37
Outstanding as of December 31, 2022		33,346		$	12.37
Granted		32,722			11.46
Vested		(33,346	)		12.37
Forfeited		—			—
Outstanding as of December 31, 2023		32,722		$	11.46

The Company has granted restricted stock units ("RSUs") to certain employees. Holders of RSUs have no voting rights and generally 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 Hark, Bonaccord, and Executive Market Units, 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 value of $17.5 million of units may vest at each future achievement of performance metrics. As of December 31, 2023, certain performance metrics have been met and specific employees have earned $8.0 million in value, which $6.6 million was issued in shares and $1.4 million was issued in cash. 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. Future vested tranches will be settled in cash. An expense of $5.6 million, $7.0 million, and $0 has been recorded for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively, on the Consolidated Statements of Operations. The unrecognized expense associated with the Bonaccord Units was $4.8 million as of December 31, 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 December 31, 2023, all Hark Units have vested and been issued. An expense of $0.3 million and $1.3 million have been recorded for the years ended December 31, 2023 and December 31, 2022 on the Consolidated Statements of Operations.

At the time of executive transition, the Company entered into an Executive Transition Agreement with a certain former executive, which granted Restricted Stock Units ("Executive Transition Units") for meeting a service requirement. The Executive Transition Units may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until they have become vested. The award has a stated value of $4.0 million and will be issued in $1 million increments quarterly beginning on October 20, 2023 and at the start of each of the following three quarters. Each $1 million increment will vest one year following issuance. Attributes of this award include graded vesting and service conditions, therefore, the expense recognition of this award is recognized on straight-line basis over the requisite service period of the award in line with the policy election discussed in Note 2. As of December 31, 2023, $1.0 million has been issued. For the year ended December 31, 2023, $0.5 million of stock compensation was recognized on the Consolidated Statements of Operations. The unrecognized expense associated with the Executive Transition Units was $3.5 million as of December 31, 2023.

At the time of executive transition, the Company entered into an Employment Agreement with a certain executive, which granted Restricted Stock Units ("Executive Market Units") for meeting a service requirement and achieving certain share price performance hurdles based on the thirty-day volume-weighted average price (“VWAP”). The executive is entitled to receive RSUs upon the thirty day VWAP of the Company's common stock reaching certain per share prices at any time prior to the fifth anniversary of the start date. There are five price per share performance hurdles for the executive to meet with each hurdle achievement allowing for the issuance of $8.0 million of units, with the number of shares determined by dividing $8.0 million by the applicable stock price performance hurdle, for a total of up to $40.0 million of units or approximately 2 million shares. The Executive Market Units may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until they have become vested. The RSUs shall vest ratably on the third, fourth, and fifth anniversaries of the executive's start date, provided that no such units shall vest earlier than the first anniversary of the applicable issuance date of such units. The fair value was determined using a Monte Carlo simulation as of the executive's start date of October 23, 2023, and was determined to be $10.8 million. As of December 31, 2023, none of the Executive Market Units have vested. For the year ended December 31, 2023, $0.5 million of stock compensation was recognized on the Consolidated Statements of Operations.

The below table excludes Executive Market Units that the performance conditions have not been satisfied, Executive Transition Units that have not vested and are recorded as a liability, and Bonaccord or Hark that were issued outside of the Plan, that have not vested and are recorded as a liability or vested and settled in cash.


	Number of			Weighted-Average Grant
	RSUs			Date Fair Value Per RSU
Outstanding as of December 31, 2021	$	59,654		$	12.74
Granted		853,900			11.16
Vested		(405,419	)		12.65
Forfeited		-			-
Outstanding as of December 31, 2022		508,135			11.34
Outstanding as of December 31, 2022		508,135		$	11.34
Granted		2,911,391			9.54
Vested		(2,001,432	)		10.27
Forfeited		—			—
Outstanding as of December 31, 2023		1,418,094		$	9.15