20. STOCK-BASED COMPENSATION

The 2020 Incentive Award Plan (the “2020 Plan”) allows for the award of incentive and nonqualified stock options, restricted stock, and other stock-based awards to employees, officers, directors, consultants, and advisers of the Company. As of December 31, 2023, the number of shares available for future issuance is 28,210,509 under the 2020 Plan. In addition, the number of shares of common stock available for issuance under the 2020 Plan is subject to an annual increase on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030 equal to the lesser of (i) 5% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Board of Directors. On January 1, 2024, 16,263,584 shares were added as available for issuance to the 2020 Plan.

Stock Options

The Company grants stock options at exercise prices deemed by the Board of Directors to be equal to the fair value of the Common Stock at the time of grant. The fair value of Common Stock has been determined by the Board of Directors of the Company at each stock option measurement date based on a variety of different factors, including the results obtained from independent third-party appraisals, the Company’s consolidated financial position and historical financial performance, the status of technological

development within the Company, the composition and ability of the current engineering and management team, an evaluation and benchmark of the Company’s competition, the current climate in the marketplace, the illiquid nature of the Common Stock, arm’s-length sales of the Company’s capital stock, and the prospects of a liquidity event, among others.

During the years ended December 31, 2023, 2022 and 2021, the Company did not grant any options to purchase shares of Common Stock to employees or non-employees.

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The option activity of the Plans for the year ended December 31, 2023, is as follows (shares in thousands):

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There were no options granted in 2023 and 2022; therefore, no weighted-average grant date fair value for the years ended December 31, 2023 and 2022. The weighted-average grant-date fair value for options granted during the years ended December 31, 2021 was approximately 5.24. The aggregate intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021 was $0.9 million, $4.7 million, and $57.2 million, respectively.

The total stock-based compensation expense related to stock options during the years ended December 31, 2023, 2022 and 2021 was $1.4 million, $2.8 million, and $6.9 million, respectively. Total unrecognized stock-based compensation expense related to unvested stock options as of December 31, 2023 aggregated $0.7 million and is expected to be recognized over a weighted-average period of 0.6 years.

Performance-Based Stock Options (included above)

During the year ended December 31, 2020, 560,256 performance-based stock options were granted to key employees of the Company. These awards vest upon the achievement of certain performance milestones by the Company and prescribed service milestones by the employee. During the year ended December 31, 2021, 83,958 performance-based stock options were forfeited due to employee termination. During the year ended December 31, 2022, 290,038 performance-based stock options were forfeited due to employee termination and the remaining 186,260 performance-based stock options outstanding expired without vesting as the performance milestones were not achieved by the Company. As of December 31, 2023, no unrecognized compensation cost remains.

Assumed Stock Options

In connection with the acquisition of ExOne, the Company assumed 86,020 unvested stock options which are considered post-combination expense and were valued using the Black-Scholes option-pricing model with the following assumptions:

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The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of the related stock options. The expected life of stock options was calculated using the average of the contractual term of the option and the weighted-average vesting period of the option, as the Company does not have sufficient history to use an alternative method to the simplified method to calculate an expected life for employees. The Company has not paid a dividend and is not expected to pay a dividend in the foreseeable future. Expected volatility for the Common Stock was determined based on an average of the historical volatility of a peer group of similar public companies.

Restricted Stock Awards

In connection with acquisitions, the Company has granted RSAs that are considered post-combination expense and accounted for as stock-based compensation as the shares vest.

The activity for stock subject to vesting under the Plans for the year ended December 31, 2023 is as follows (shares in thousands):

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The total stock-based compensation expense related to RSAs during the years ended December 31, 2023, 2022 and 2021 was $0.8 million, $1.0 million, and $3.1 million, respectively. As of December 31, 2023, the total unrecognized stock-based compensation expense related to unvested RSAs aggregated $- million, and is expected to be recognized over a weighted-average period of 0.1 years.

Restricted Stock Units

Restricted Stock Units (“RSUs”) awarded to employees and non-employees generally vest over four years from the anniversary date of the grant, with one-year cliff vesting and quarterly vesting thereafter, provided service with the Company is not terminated. The fair value of RSUs is equal to the estimated fair market value of the Company’s Common Stock on the date of grant.

RSU activity under the 2020 Plan for the year ended December 31, 2023 is as follows (shares in thousands):

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The total stock-based compensation expense related to RSUs during the years ended December 31, 2023, 2022 and 2021 was $31.0 million, $45.0 million, and $18.8 million, respectively. Total unrecognized compensation costs related to unvested RSUs as of December 31, 2023 was approximately $48.0 million and is expected to be recognized over a weighted-average period of 2.2 years.

Restricted stock units include awards that vest subject to certain performance and market-based criteria.

Performance-Based Restricted Stock Units (included above)

During the year ended December 31, 2021, 670,000 performance-based RSUs were granted to key employees of the Company. These awards vest upon the achievement of certain performance milestones by the Company and prescribed service milestones by the employee. No performance-based RSUs vested during the year ended December 31, 2022 and 2021. During the year ended December 31, 2021, 120,000 awards expired due to performance milestones not being achieved. During the year ended December 31, 2022, no performance-based RSUs vested and 400,000 performance-based RSUs were forfeited due to employee termination. As of December 31, 2023, 150,000 performance-based RSUs remain outstanding.

During the year ended December 31, 2020, 124,300 performance-based RSUs were granted to a key employee of the Company. This award vests upon the achievement of certain performance milestones by the Company and prescribed service milestones by the employee. No performance-based RSUs vested during the years ended December 31, 2023 and 2022. During the year ended December 31, 2023, 124,300 performance-based RSUs were forfeited. As of December 31, 2023, no performance-based RSUs remain outstanding.

Market-Based Restricted Stock Units (included above)

In October 2021 the Compensation Committee of the Company’s Board of Directors awarded certain executive officers a total of up to 9,070,269 market-based RSUs. These RSUs will vest and result in the issuance of shares of Common Stock based on continuing employment and the achievement of certain market conditions set by the Company.

The Company used a Monte Carlo simulation model to estimate the grant-date fair value of the restricted stock units granted in October 2021. The fair value is recorded as stock compensation expense in the consolidated statements of operations over the period from the date of grant to October 2026 regardless of the actual outcome achieved.

The table below sets forth the assumptions used to value the market-based awards and the estimated grant-date fair value:

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During the year ended December 31, 2021, one of the executive officers resigned from the Company, forfeiting his market-based award. As the service condition was not met prior to his resignation, no stock-based compensation expense was recorded for this award. No market-based RSUs vested or were forfeited during the years ended December 31, 2023 and 2022. As of December 31, 2023, 6,802,702 market-based restricted share units remain outstanding.

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Liability-Classified Share-Based Arrangement

During the year ended December 31, 2021, the Compensation Committee of the Company’s Board of Directors provided performance goals and achievement criteria to certain key employees. If these performance criteria are met, the Company has committed to issue RSU grants with a target fair value of $8.5 million on the future grant date. The awards will vest upon prescribed service milestones of the employee subsequent to the achievement of the specified performance criteria. During the year ended December 31, 2022, the designated employees terminated employment and the liability-classified awards were forfeited. As of December 31, 2023, there is no fair value associated with these awards. The liability-classified awards have been excluded from the potentially dilutive securities table.

Bonus Program

The Company’s bonus program allows the bonus to be paid out in RSUs, cash, or a combination.

The Company’s 2022 bonus program ("2022 Bonus Program") was granted in dollar bonus amounts, which were paid out in RSUs during the three months ended March 31, 2023. The number of RSUs awarded was determined using the closing price of the Company's Common Stock on the date of the Board's final certification of the Company's performance attainment and awards to be issued to each employee. The Company accounted for these awards as liability-based awards until the awards were achieved, at which point the Company accounted for these awards as equity-based awards.

The Company’s 2023 bonus program (“2023 Bonus Program”) is expected to be paid out in RSUs determined using the closing price of the Company's Common Stock on the date of the Board's final certification of the Company's performance attainment and awards to be issued to each employee. The Company has accounted for these awards as liability-based awards, since the monetary value of the obligation associated with the award is based predominantly on a fixed monetary amount known at inception, and it has an unconditional obligation that it must or may settle by issuing a variable number of its equity shares. The Company will recognize stock-based compensation expense over the employees’ requisite service period, based on the expected attainment of the Company-wide targets. As of December 31, 2023, the Company has accrued $2.0 million associated with these awards, which is recorded in accrued expenses and other current liabilities in the consolidated balance sheets.

Stock-Based Compensation Expense

Total stock-based compensation expense related to all of the Company’s stock-based awards granted is reported in the consolidated statements of operations as follows (in thousands):

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⁽¹⁾ Includes $7.3 million of stock-based compensation expense during the year ended December 31, 2022, incurred in connection with the 2022 Initiative described in Note 24. Restructuring Charges.

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During the year ended December 31, 2023, the Company recognized $2.0 million of stock-based compensation expense associated with liability-classified awards related to the 2023 Bonus Program. During the year ended December 31, 2022, the Company recognized $0.8 million of stock-based compensation expense associated with liability-classified awards related to the 2022 Bonus Program.

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There were 28,210,509 shares available for award under the 2020 Plan as of December 31, 2023.