A total of 31,900,000 shares of Common Stock are authorized and reserved for issuance under the 2021 Equity Incentive Plan (the “2021 Equity Plan”) which provides for the grant of stock options (either incentive or non-qualified), stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance share units and other share-based awards with respect to the Common Stock. Shares associated with underlying awards that are expired, forfeited, or otherwise terminated without the delivery of shares, or are settled in cash, and any shares tendered to or withheld by the Company for the payment of an exercise price or for tax withholding will again be available for issuance under the 2021 Equity Plan.

The Company has granted PBNQSO to its executive officers, non-employee directors and other members of senior management under the 2021 Equity Plan. The exercise prices of the outstanding PBNQSO range from $2.94 to $13.24 per share and consist of two types of vesting criteria. Of the aggregate number of PBNQSO granted, 245,004 PBNQSO were eligible to vest based on the achievement of certain performance goals for fiscal year 2021 (the “Bridge Options”), 5,639,500 PBNQSO were eligible to vest based on the achievement of certain performance goals for fiscal year 2024, and the remaining 9,249,667 PBNQSO outstanding are eligible to vest based on the achievement of AOP during the 5 year vesting period from the grant date. For unvested PBNQSO grants through December 31, 2024, the remaining vesting period ranges from fiscal year 2025 through fiscal year 2028. The PBNQSO expire ten years from the grant date.

The Bridge Options vested and became exercisable upon (i) the Company achieving an Adjusted EBITDA target of $136.0 million for fiscal year 2021; and (ii) the recipient remaining in continuous service through the first anniversary of the grant date. As of December 31, 2024, all the Bridge Options are vested and available to exercise.

On February 14, 2023 and to be effective prospectively, the compensation committee approved the elimination of “Unusual or Nonrecurring Transactions or Events” provision in the PBNQSO agreement whereby it could make certain adjustments to operational performance criteria “for unusual or nonrecurring transactions or events affecting the Company or the financial statements of the Company.” This provision had precluded the establishment of a grant date on the date when PBNQSO were awarded in accordance with the technical requirements under Topic 718.

On March 8, 2023, in connection with changes in the Company’s leadership structure, it amended the performance terms and conditions of the outstanding 5-Year Options previously granted to its former chief executive officer (the “Executive”) whereby 50% of such outstanding options eligible to vest in each of fiscal years from 2023 through 2026 would remain subject to the existing performance terms and conditions. The remaining 50% of such outstanding options would be eligible to vest in such fiscal years subject to the performance terms and conditions related to the Executive’s position and duties as Vice Chairman. For these remaining 50% of outstanding options, the Company’s compensation committee will establish performance goals and communicate them to the Executive and assess achievement annually. For accounting purposes, the Company will recognize compensation expense related to these remaining 50% of outstanding options when the specified performance goal for future periods have been established and communicated to the Executive.

In March 2023, based on the Company’s performance for 2022, its compensation committee verified and determined the AOP for the 2022 tranche of the 5-Year Option to be $8.39. As a result, it was determined that a mutual understanding of the key terms and conditions for the 2022 tranche had been ascertained and the grant date was therefore established. The cumulative compensation expense for the 2022 tranche was adjusted based on the fair value calculated using the Black-Scholes option-pricing model at the grant date. As the AOP for the 2022 tranche was below the minimum vesting AOP target of $11.35 employees separated from the Company through the date of determination of the 2022 AOP relinquished 240,000 options retained by them relating the 2022 tranche and such options were cancelled by the Company.

•eliminated a term that provided discretion to the compensation committee to make certain adjustments on how AOP against the performance target will be measured with respect to the grants made prior to the 2023 modification event;

•added of cumulative vesting term, under which if the maximum AOP target was achieved in an option performance year, (including in any one of the two years immediately following the fifth and final year of the option term), any number of unvested options that were eligible to vest in all prior performance years, will be eligible to vest based on AOP calculated in such option performance year;

•added an alternative vesting provision if the market price of the Company's Common Stock is more than twice the exercise price for a sustained period of time commencing in the third fiscal year after option grant; and

In the prior year, the Company had 2,175,000 Pre Modification 2023 Option Grants and 405,000 Post Modification 2023 Option Grants that vest based on the achievement of certain performance goals for fiscal years 2023-2027 to employees and non-employees. For the Pre Modification 2023 Option Grants, the Company estimated the grant date fair value, and the resulting share-based compensation expense, using the Black-Scholes option-pricing model. For the Post Modification 2023 Option Grants, the Company estimated the grant date fair value, and the resulting share-based compensation expense, using the Hull-White model. The Company recognized compensation costs related to the PBNQSO granted in 2023 based on the estimated fair value of the awards on the date of grant.

The Company records forfeitures as they are incurred. The grant date fair value of the PBNQSO is expensed proportionately for each tranche over the applicable service period. The fair value of performance-based stock options is recognized as compensation expense beginning at the time in which the performance conditions are deemed probable of achievement, over the remaining applicable service period.

The Company's chief executive officer, ("CEO") and business director, North America Retardant and Services, are required to hold a minimum level of personal investment of $2.2 million and $1.5 million, respectively, in Common Stock pursuant to stock retention guidelines attached to their respective PBNQSO agreement. The aggregate value may include the fair market value of shares associated with underlying options over the exercise price, but half of the value must be attributable to Common Stock held by each officer. Each officer will have five years after grant date to comply with these requirements.


	Number of Options	Weighted-Average Exercise/Conversion Price		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2023	11,244,171	$	9.30
Granted	4,655,000	$	6.43
Exercised	—	$	—
Forfeited	(525,000)	$	7.40
Cancelled	(240,000)	$	8.63
Outstanding at December 31, 2024	15,134,171	$	8.49	7.85	$	66,389
Options vested and exercisable	5,884,504	$	9.28	7.30	$	20,662


	Year Ended December 31, 2024
Dividend yield	—		%
Risk-free interest rate	3.72% to 4.42%
Expected volatility	39.00% to 44.00%
Expected life (years)	10.00
Suboptimal exercise multiple	2.5
Drift rate	3.72% to 4.42%
Weighted average exercise price of options granted	$	6.43
Weighted average fair value of options granted	$	3.45

Share-based compensation expense recognized by the Company during the years ended December 31, 2024 and 2023 and 2022 was $12.8 million, $1.6 million and $14.6 million, respectively. The total tax benefit recognized during the years ended December 31, 2024 and 2023 and 2022 related to non-cash share-based compensation expense was $0.2 million, $0.8 million and $1.5 million, respectively. Compensation expense is recognized based upon probability assessments of achieving the AOP targets determined using estimated EBITDA, net debt and diluted shares for PBNQSO that are expected to vest in future periods. Such probability assessments are subject to revision and, therefore, unrecognized compensation expense is subject to future changes in estimate. As of December 31, 2024, there was approximately $17.0 million of total unrecognized compensation expense related to non-vested PBNQSO expected to vest, which is expected to be recognized over a weighted-average period of 1.8 years.

As discussed in Note 12, Related Parties, following the Business Combination, the Company assumed, and agreed to pay, perform, satisfy and discharge in full, all of EverArc’s liabilities and obligations under the key terms and conditions of the Founder Advisory Agreement previously executed between EverArc and EverArc Founder Entity.

The fair value of the Fixed Annual Advisory Amount is calculated based on the 10-day volume weighted average price of the Company’s Common Stock. The fair value of the Variable Annual Advisory Amount is determined using a Monte Carlo simulation because of the market condition (i.e., achievement of a specified share price) associated with this award. For Advisory Amounts classified within equity, the Company does not subsequently remeasure the fair value. For the Advisory Amounts classified as a liability, the Company remeasures the fair value at each reporting date. The key inputs into the Monte Carlo simulation model for the Variable Annual Advisory Amounts were as follows at December 31, 2024, 2023 and 2022:


	December 31, 2024			December 31, 2023			December 31, 2022
Dividend yield	—		%	—		%	—		%
Risk-free interest rate	4.43		%	3.84		%	3.87		%
Expected volatility	49.50		%	48.10		%	43.10		%
Expected life (years)	7.00			8.00			9.00
10-day volume weighted average share price	$	12.85		$	4.51		$	8.86

All of the Founder Advisory Amounts are vested. Compensation expense recorded by the Company in the future will depend upon changes in the fair value of the liability-classified Advisory Amounts. See Note 12, Related Parties, for additional information related to the Founders Advisory Amounts.

The Company sponsors a savings and investment plan under which a portion of employee contributions are matched. The Company made matching contributions of $1.3 million in each of the years ended December 31, 2024, 2023 and 2022.