11.   Stock-Based Compensation

Employee Equity Incentive Plan

On September 20, 2017, the Company established its 2017 Omnibus Equity Incentive Program (the “2017 Plan”) which provides for the granting of equity-based awards to certain employees, directors, independent contractors, consultants and agents. Under the 2017 Plan, the Company may grant non-qualified stock options, stock appreciation rights, restricted stock units, and other stock-based awards.

On April 19, 2021 the Company established its 2021 Omnibus Equity Incentive Plan (“2021 Equity Plan”). The 2021 Equity Plan provides for the grant of stock options (including qualified incentive stock options and nonqualified stock options), stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, and other stock or cash settled incentive awards.

Options become exercisable subject to vesting schedules up to four years from the date of the grant and subject to certain timing restrictions upon an employee’s separation of service and no later than 10 years after the grant date.

Restricted stock units are subject to vesting schedules up to four years from the date of the grant and subject to certain restrictions upon employee separation.

A summary of stock option activity as of and for the three months ended March 31, 2023 is as follows:

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Stock options include grants to executives that contain both market-based and performance-based vesting conditions. There were no stock options granted that contain both market-based and performance-based vesting conditions during the three months ended March 31, 2023. During the three months ended March 31, 2023, 11 stock options were exercised and 2,015 market-based and performance-based stock options remain outstanding as of March 31, 2023.

The weighted average grant date fair value of options granted during the three months ended March 31, 2023 and March 31, 2022 was $12.21 and $12.77, respectively. The total intrinsic value of options exercised during the three months ended March 31, 2023 and March 31, 2022 was $12.8 million and $12.1 million, respectively.

The fair market value of each option granted during the three months ended March 31, 2023 has been estimated on the grant date using the Black-Scholes-Merton option-pricing model with the following assumptions:

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The Company’s board of directors (the “Board”) did not declare or pay dividends on any Company stock during the three months ended March 31, 2023 and March 31, 2022.

A summary of restricted stock unit activity as of and for the three months ended March 31, 2023 is as follows:

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The total grant date fair value of restricted stock units that vested during the three months ended March 31, 2023 was $5.9 million.

As of March 31, 2023, unrecognized stock-based compensation expense was $146.2 million, which is expected to be recognized over a weighted-average period of 1.6 years.

Total stock-based compensation expense recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income as follows:

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Employee Stock Purchase Plan

In March 2021, the Board approved the Company’s 2021 Employee Stock Purchase Plan (“ESPP”), and employees became eligible to enroll in August 2021. Purchases are accomplished through participation in discrete offering periods. The ESPP is available to U.S.-based employees and was expanded to most of the Company’s non-U.S.-based employees in 2022. The current offering period began on December 1, 2022 and will end on May 31, 2023. The Company expects the program to continue consecutively for six-month offering periods for the foreseeable future.

Under the ESPP, eligible employees are able to acquire shares of the Company’s common stock by accumulating funds through payroll deductions. The purchase price for shares of common stock purchased under the ESPP is 85% of the lesser of the fair market value of the common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of the applicable offering period. Employees are required to hold shares purchased for minimum of six months following the purchase date.

Stock-based compensation expense for the ESPP is recognized on a straight-line basis over the requisite service period of each award. Stock-based compensation expense related to the ESPP totaled $0.2 million and $0.1 million for the three months ended March 31, 2023 and March 31, 2022, respectively.