Employee Benefit Plans

9 Months Ended

Sep. 30, 2022

Employee Benefit Plans

Employee Benefit Plans

20. Employee Benefit Plans

2011 and 2021 Stock Option and Incentive Plan

The Company has issued stock-based awards to employees and members of its Board of Directors (the “Board”) consisting of stock options and restricted stock awards. The Company accounts for all stock-based awards to employees and members of the Board as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. These costs are recognized over the requisite service period. Stock-based compensation costs recognized, excluding the Company’s matching contributions to the Plug Power Inc. 401(k) Savings & Retirement Plan and quarterly Board compensation, were $44.2 million and $12.7 million for the three months ended September 30, 2022 and September 30, 2021, respectively. Stock-based compensation costs recognized, excluding the Company’s matching contributions to the Plug Power Inc. 401(k) Savings & Retirement Plan and quarterly Board compensation, were $127.7 million and $32.3 million for the nine months ended September 30, 2022 and September 30, 2021, respectively. The methods and assumptions used in the determination of the fair value of stock-based awards are consistent with those described in our 2021 Form 10-K.

The components and classification of stock-based compensation expense, excluding the Company’s matching contributions to the Plug Power Inc. 401(k) Savings & Retirement Plan and quarterly Board compensation, were as follows (in thousands):

	Three months ended				Nine months ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Cost of sales	$	1,821	$	680	$	4,928	$	1,231
Research and development		1,483		1,782		4,062		4,534
Selling, general and administrative		40,935		10,237		118,710		26,550
	$	44,239	$	12,699	$	127,700	$	32,315

Option Awards

The Company issues options that are time and performance-based awards. All option awards are determined to be classified as equity awards.

Service Stock Options Awards

The following table reflects the service stock option activity for the nine months ended September 30, 2022:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
		Shares	Price		Terms		Value
Options outstanding at December 31, 2021	$	9,786,909	$	11.65	$	7.70	$	172,412
Granted		1,097,974		23.55		—		—
Exercised		(727,992)		2.86		—		—
Forfeited		(127,634)		24.05		—		—
Options outstanding at September 30, 2022	$	10,029,257	$	13.47	$	7.35	$	101,193
Options exercisable at September 30, 2022		6,561,842		8.35		6.63		90,283
Options unvested at September 30, 2022	$	3,467,415	$	23.15	$	8.72	$	10,910

The weighted average grant-date fair value of the service stock options granted during the three months ended September 30, 2022 and 2021 was $14.64 and $15.82, respectively. The weighted average grant-date fair value of the service stock options granted during the nine months ended September 30, 2022 and 2021 was $15.31 and $19.76, respectively. The total intrinsic fair value of service stock options exercised during the nine months ended September 30, 2022 and 2021 was $14.8 million and $102.1 million, respectively. The total fair value of the service stock options that vested during the three months ended September 30, 2022 and 2021 was approximately $15.5 million and $10.4 million, respectively. The total fair value of the service stock options that vested during the nine months ended September 30, 2022 and 2021 was approximately $21.74 million and $10.9 million, respectively.

Compensation cost associated with service stock options represented approximately $6.8 million and $4.2 million of the total share-based payment expense recorded for the three months ended September 30, 2022 and 2021, respectively. Compensation cost associated with service stock options represented approximately $19.2 million and $11.9 million of the total share-based payment expense recorded for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, there was approximately $42.4 million of unrecognized compensation cost related to service stock option awards to be recognized over the weighted average remaining period of 1.85 years.

Performance Stock Option Awards

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Terms	Value
Options outstanding at December 31, 2021	14,020,000	$	26.92	6.70	$	18,336,200
Granted	1,500,000		26.38	6.89		—
Options outstanding at September 30, 2022	15,520,000	$	26.87	6.07	$	—
Options exercisable at September 30, 2022	1,391,000		26.92	5.98		—
Options unvested at September 30, 2022	14,129,000	$	26.86	6.07	$	—

The weighted average grant-date fair value of the performance stock options granted during the three and nine months ended September 30, 2022 and 2021 was $9.73 and $12.78, respectively. There were no performance stock options exercised during the nine months ended September 30, 2022 or 2021, respectively. The total fair value of the performance stock options that vested during the three and nine months ended September 30, 2022 and 2021 was approximately $20.8 million and $0 million, respectively.

As of September 30, 2022, there were 2,782,000 unvested stock options for which the employee requisite service period has not been rendered but are expected to vest. The aggregate intrinsic value of these unvested stock options is $0 as of September 30, 2022. The weighted average remaining contractual term of these unvested stock options was 6.1 years as of September 30, 2022.

Compensation cost associated with performance stock options represented approximately $26.1 million and $2.0 of the total share-based payment expense recorded for the three months ended September 30, 2022 and 2021, respectively. Compensation cost associated with performance stock options represented approximately $76.5 million and $2.0 of the total share-based payment expense recorded for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, there was approximately $89.7 million of unrecognized compensation cost related to performance stock option awards to be recognized over the weighted average remaining period of 2.07 years.

Restricted Stock Awards

The Company recorded expense associated with its restricted stock awards of approximately $11.3 million and $6.5 million for the three months ended September 30, 2022 and 2021, respectively. The Company recorded expense associated with its restricted stock awards of approximately $32.0 million and $18.5 million for the nine months ended September 30, 2022 and 2021, respectively. Additionally, as of September 30, 2022, there was $75.0 million of unrecognized compensation cost related to restricted stock awards to be recognized over the weighted average period of 1.91 years.

A summary of restricted stock activity for the nine months ended September 30, 2022 is as follows (in thousands except share amounts):

		Weighted		Aggregate
		Average Grant Date		Intrinsic
	Shares	Fair Value		Value
Unvested restricted stock at December 31, 2021	4,851,873	$	21.59	$	136,968
Granted	1,476,152		23.60		—
Vested	(2,474,065)		13.87		—
Forfeited	(116,668)		24.89		—
Unvested restricted stock at September 30, 2022	3,737,292	$	23.50	$	78,521

The weighted average grant-date fair value of the restricted stock awards granted during the three months ended September 30, 2022 and 2021, was $22.00 and $32.29, respectively. The weighted average grant-date fair value of the restricted stock awards granted during the nine months ended September 30, 2022 and 2021, was $23.60 and $32.29, respectively. The total fair value of restricted stock awards vested for the three months ended September 30, 2022 and

2021 was $25.5 million and $68.6 million, respectively. The total fair value of restricted stock awards vested for the nine months ended September 30, 2022, and 2021 was $34.3 million and $72.95 million, respectively.

401(k) Savings & Retirement Plan

The Company issued 310,159 shares of common stock and 54,531 shares of common stock pursuant to the Plug Power Inc. 401(k) Savings & Retirement Plan during the nine months ended September 30, 2022 and 2021, respectively.

The Company’s expense for this plan was approximately $2.5 million, and $1.1 million for the three months ended September 30, 2022 and 2021, respectively. The Company’s expense for this plan was approximately $6.7 million and $3.4 million for the nine months ended September 30, 2022 and 2021, respectively.

Non-Employee Director Compensation

The Company granted 4,342 shares of common stock and 3,685 shares of common stock to non-employee directors as compensation for the three months ended September 30, 2022 and 2021, respectively. The Company granted 14,282 shares of common stock and 8,923 shares of common stock to non-employee directors as compensation for the nine months ended September 30, 2022 and 2021, respectively. All common stock issued is fully vested at the time of issuance and is valued at fair value on the date of issuance. The Company’s share-based compensation expense in connection with non-employee director compensation was approximately $0.1 million and $0.1 million for the three months ended September 30, 2022 and 2021, respectively. The Company’s share-based compensation expense in connection with non-employee director compensation was approximately $0.3 million and $0.3 million for the nine months ended September 30, 2022 and 2021, respectively.