In 2008, the Company adopted its 2008 Stock Option/Stock Issuance Plan and, in 2017, the Company adopted the Zeta Global Holdings Corp. 2017 Incentive Plan (collectively, the “Plans”).

The Plans permitted the issuance of stock options, restricted stock and restricted stock units to employees, directors and officers, consultants or advisors and non-employee directors of the Company. Options granted under the Plans expire no later than ten years from the grant date. Prior to the IPO, the restricted stock and restricted stock units granted under the Plans generally did not vest until a change in control. Upon a change in control, restricted stock and restricted stock units vest as to 25% of the shares with the balance of the shares vesting in equal quarterly installments following the change in control over the remainder of a five-year term from the original date of grant. The restricted stock and restricted stock units fully vest upon a change in control to the extent five years has passed from the original date of grant of the restricted stock or restricted stock units. Since the vesting of these awards was contingent upon the change of control event, which was not considered probable until it occurs, the Company did not record any stock-based compensation for such awards prior to the IPO, a change in control event. The stock-based compensation has been recognized following the vesting of restricted stock, restricted stock units and options as described below.

In connection with the IPO, the Company adopted the Zeta Global Holdings Corp. 2021 Incentive Award Plan (the “2021 Plan”), which was effective as of the day prior to the first public trading date of our Class A common stock. All restricted stock, restricted stock units and options granted since the IPO have been granted under the 2021 Plan. Under the 2021 Plan, with certain exceptions as permitted by the 2021 Plan, 25% of the shares shall vest upon the first anniversary of the grant date and balance shall vest in equal quarterly installments over the remainder of a four year term.

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense of $64,462 and $73,736, respectively.

As noted above, the Company’s restricted stock and restricted stock units granted prior to the IPO did not vest until a change of control. On March 24, 2021, the Company’s board of directors approved a modification in the vesting terms of its restricted stock and restricted stock unit awards. This modification was accounted for under the guidance in ASC 718-20-35-3. Given the vesting of the modified awards contained a performance condition associated with the IPO, the Company had determined that the modification was considered improbable-to-improbable under ASC 718-20-55-118 through 119. The Company recognized compensation expense over the modified vesting terms, based on the fair value as of the date of modification.

During the three months ended March 31, 2023, the Company's board of directors approved the modification of the vesting schedule of certain awards granted prior to the IPO, such that the modification accelerated the vesting of those grants. These modifications were accounted for in accordance with ASC 718-20-35-3 and did not have any material impact on the stock-based compensation during the three months ended March 31, 2023.

Following is the activity of restricted stock and restricted stock units granted by the Company:


	Shares			Weighted Average Grant Date Fair Value
Non-vested as of January 1, 2023		60,107,275		$	10.72
Granted (1)		864,177			9.25
Vested		(5,534,101	)		10.56
Forfeited (2)		(227,421	)		10.06
Non-vested as of March 31, 2023 (3)		55,209,930		$	10.72

(1)

During the three months ended March 31, 2023, the Company granted 814,177 restricted stock and 50,000 restricted stock units to its employees, advisors and non-employee directors.

(2)

During the three months ended March 31, 2023, 208,969 restricted stock and 18,452 restricted stock units were forfeited.

(3)

Includes 38,521,054 unvested Class A restricted stock, 15,617,402 unvested Class B restricted stock and 1,071,474 unvested restricted stock units as of March 31, 2023.

Following is the summary of transactions under the Company’s stock option plan:


	Number of options			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding options as of January 1, 2022		887,662		$	3.53		4.19	$	5.28
Granted		575,250			10.82		—		—
Exercised		(315,430	)		0.63		—		—
Forfeited		(30,990	)		10.83		—		—
Outstanding options as of December 31, 2022		1,116,492		$	7.90		6.67	$	0.59
Granted		—			-
Exercised		(8,500	)		4.86
Forfeited		(11,150	)		10.83
Outstanding options as of March 31, 2023		1,096,842		$	7.90		6.41	$	3.26

The Company did not issue any options during the three months ended March 31, 2023.

Under the 2021 Plan, the Compensation Committee of the Board of Directors approved the grant of PSUs to certain employees during the year ended on December 31, 2022 and 2021. Each PSU represents the right to receive shares of Class A common stock as set forth in the PSU grant agreement or, at the option of the Company, an equivalent amount of cash. Participants have no right to the distribution of any shares or payment of any cash until the time (if ever) the PSUs are earned and have vested. Each PSU provides for the right to receive a dividend equivalent to the value of any ordinary cash dividends paid on substantially all the outstanding shares of Class A common stock if the PSUs are earned and vested. Upon achievement of certain price conditions, the PSUs could result in the issuance of up to 500% of the PSUs granted in Class A common stock. Such number of shares of Class A common stock shall be earned as a percentage of the PSUs granted, based on the 20-day volume-weighted average closing price per share (“VWAP”) for each quarter. The number of PSUs earned for such quarter shall be reduced by the number of PSUs, if any, earned in any prior quarter.

Earned PSUs vest in three equal annual installments, with the first installment vesting on the date the Company determines the number of PSUs that are eligible to vest for such quarter, and the second and third installments vesting on the first and second anniversaries of such determination date, subject to accelerated vesting in connection with certain qualifying terminations of employment or a change in control.

As of March 31, 2023, the Company had 3,479,500 outstanding PSUs with the weighted average grant date fair value of $12.38.

The Company did not issue any PSUs during the three months ended March 31, 2023.

On July 28, 2021, the Compensation Committee of the Board of Directors approved the Company’s first offering period under the ESPP, which commenced on August 1, 2021 and ended November 30, 2021. Following the end of the first offering period, the ESPP shall have consecutive offering periods of approximately six months in length commencing each year on December 1 and June 1 and ending on each May 31 and November 30, as applicable.

The fair value of the offering that commenced on December 1, 2022 was estimated at $3.69 per share, and expected to result in an issuance of approximately 212,998 shares of Class A common stock under this offering that will end on May 31, 2023.

The Company has $303,809 of unrecognized compensation expense related to its 55,209,930 unvested restricted stock and restricted stock units, 3,479,500 performance stock units, 533,110 unvested options and approximately 212,998 shares of Class A common stock to be issued under the ESPP. This unrecognized stock-based compensation will be recognized over a weighted average period of 1.06 years.