The Cash Incentive Plan provides for a cash incentive award determined based on the achievement of specified annual Company performance goals, which include net revenue, adjusted EBITDA and improvement in the Company’s benefit corporation certification score, as well as individual performance goals. Each eligible employee was assigned an individual incentive target expressed as a percentage of the employee’s annual base salary.
Following the end of each annual performance period, the Committee determines achievement of the Company and individual performance goals. The Committee may modify and/or adjust the performance goals or the related level of achievement, in whole or in part, as it deems appropriate or equitable. Any cash incentive awards that become payable under the Cash Incentive Plan will generally be paid no later than 90 days following the end of the applicable performance period. In order to receive an award under the Cash Incentive Plan, the participant must generally remain employed and in good standing with the Company through the date of payment.
In January 2022, the Compensation Committee determined that no bonuses under the Cash Incentive Plan, whether based on Company performance relative to 2021 Corporate Goals or individual incentive targets, will be paid for the 2021 performance period.
Long-Term Incentives
Equity-based compensation has been and will continue to be an important foundation in executive compensation packages as we believe it is important to maintain a strong link between executive incentives and the creation of stockholder value. We believe that performance and equity-based compensation can be an important component of the total executive compensation package for maximizing stockholder value while, at the same time, attracting, motivating and retaining high-quality executives.
2021 Equity Incentive Plan
In January 2021, our Board adopted and our stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan became effective immediately upon the closing of the Business Combination. The 2021 Plan provides for the grant of incentive stock options (“ISOs”), within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of our affiliates. Under the 2021 Plan, our Board has the authority to determine award recipients, grant dates, the numbers and types of stock awards to be granted, the applicable fair market value, and the provisions of each stock award, including the period of exercisability and the vesting schedule applicable to a stock award. See “Equity Compensation Plans at December 31, 2021” for further information.
The maximum number of shares of Common Stock that may be issued under the 2021 Plan will not exceed 10,026,958 shares of Common Stock (the “2021 Plan Shares”). As of the Record Date, we had 9,664,617 shares of Common Stock reserved for issuance pursuant to the 2021 Plan.
2021 Employee Stock Purchase Plan
Our Board and stockholders adopted the 2021 Employee Stock Purchase Plan (“ESPP”) in January 2021. The ESPP became effective immediately upon the closing of the Business Combination. The purpose of the ESPP is to provide a means whereby we can align the long-term financial interests of its employees with the financial interests of our stockholders. In addition, our Board believes that the ability to allow our employees to purchase shares of Common Stock will help us to attract, retain, and motivate employees and encourages them to devote their best efforts to our business and financial success. See “Equity Compensation Plans at December 31, 2021” for further information. The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Code.
The maximum number of shares of Common Stock that may be issued under the ESPP is 2,005,392 shares of Common Stock (the “ESPP Shares”). As of the Record Date, we had 1,966,656 shares of Common Stock reserved for issuance pursuant to the ESPP.
In August 2021, our Board amended the 2021 Plan and the ESPP to remove the “evergreen” features therein. The “evergreen” provision in the 2021 Plan operated to annually increase the maximum number of 2021 Plan Shares authorized and available for issuance without seeking stockholder approval by 2.5% of the total number of shares of our Common Stock outstanding on December 31st of the preceding year or such lesser number of shares as determined by the Board. The “evergreen” provision in the ESPP operated to annually increase the maximum number