Company: TIPT
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0001393726-25-000055
Chunk: 43

Company: TIPTREE INC.
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 8
Chunk 43
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 illustrates the aggregate number of PRSUs that will vest upon the achievement of each Tiptree share price target. Such price targets are adjusted down for cumulative dividends paid by the Company since grant (e.g., the next share price target is $29.01 as adjusted for cumulative dividends paid to date).Original Tiptree Share Price TargetNumber of PRSUs that Vest$30775,000$451,033,333$601,291,667$701,420,833Upon vesting, the Company will issue shares, or if shares are not available under the 2017 Equity Plan, then the Company may in its sole discretion instead deliver cash equal to the fair market value of the underlying shares. The fair value of the PRSUs was estimated using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved. The historical volatility was computed based on historical daily returns of the Company’s stock price simulated over the performance period using a lookback period of 10 years. The valuation was done under a risk-neutral framework using the 10-year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the reporting date. The quarterly dividend rates in effect as of the reporting date are used to calculate a spot dividend yield for use in the model.The following table presents the assumptions used to measure the fair value of the PRSUs as of the respective grant date, or June 7, 2022, when the original tranches were converted to equity awards.Valuation Input June 2022October 2022January 2024Historical volatility38.75%39.23%39.10%Risk-free rate3.04%3.95%3.80%Dividend yield1.45%1.44%1.05%Cost of equity11.72%14.19%13.65%Expected term (years)6.05.95.5Stock Option AwardsBetween 2016 and 2020, option awards were granted to the Executive Committee with an exercise price equal to the fair market value of our common stock on the date of grant. The option awards have a 10-year term and are subject to the recipient’s continuous service, a market requirement, and vest one third on each of the three, four, and five-year anniversaries of the grant date. As of March 31, 2025, the market requirement for