Employee Benefit Plans

9 Months Ended

Sep. 30, 2024

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 and restricted stock unit 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 of $2.6 million and $3.0 million to the Plug Power Inc. 401(k) Savings & Retirement Plan and quarterly Board compensation, were $21.3 million and $42.4 million for the three months ended September 30, 2024 and 2023, respectively. Stock-based compensation costs recognized, excluding the Company’s matching contributions of $8.9 million and $9.0 million to the Plug Power Inc. 401(k) Savings & Retirement Plan and quarterly Board compensation, were $54.4 million and $119.5 million for the nine months ended September 30, 2024 and 2023, respectively. The methods and assumptions used in the determination of the fair value of stock-based awards are consistent with those described in our 2023 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, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Cost of sales	$	1,459	$	3,115	$	5,544	$	8,231
Research and development		2,028		2,935		6,621		6,982
Selling, general and administrative		17,784		36,392		42,224		104,278
	$	21,271	$	42,442	$	54,389	$	119,491

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, 2024:

				Weighted
		Weighted		Average
		Average		Remaining		Aggregate
		Exercise		Contractual		Intrinsic
	Shares	Price		Terms		Value
Options outstanding as of December 31, 2023	17,336,362	$	11.37		7.86	$	11,391
Options exercisable as of December 31, 2023	8,288,944		11.84		6.18		7,250
Options unvested as of December 31, 2023	9,047,418		10.94		9.39		4,141
Granted	6,194,625		2.45		—		—
Exercised	(47,500)		2.09		—		—
Forfeited	(2,869,251)		15.98		—		—
Options outstanding as of September 30, 2024	20,614,236	$	8.07		7.35	$	476
Options exercisable as of September 30, 2024	8,733,294		11.56		5.63		342
Options unvested as of September 30, 2024	11,880,942	$	5.51		8.62	$	134

The weighted average grant date fair value of the service stock options granted during the nine months ended September 30, 2024 and 2023 was $1.73 and $8.44, respectively. The total intrinsic fair value of service stock options exercised during the nine months ended September 30, 2024 and 2023 was $43 thousand and $4.2 million, respectively.

The total fair value of the service stock options that vested during the nine months ended September 30, 2024 and 2023 was approximately $16.9 million and $24.4 million, respectively.

Compensation cost associated with service stock options represented approximately $3.7 million and $8.6 million of the total share-based payment expense recorded for the three months ended September 30, 2024 and 2023, respectively. Compensation cost associated with service stock options represented approximately $16.0 million and $23.8 million of the total share-based payment expense recorded for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was approximately $32.9 million of unrecognized compensation cost related to service stock option awards to be recognized over the weighted average remaining period of 1.87 years.

Market Condition Stock Option Awards

The following table reflects the market condition stock option award activity for the nine months ended September 30, 2024. Solely for the purposes of this table, the number of market condition stock options is based on participants earning the maximum number of market condition stock options (i.e. 200% of the target number of market condition stock options). These market condition stock options are subject to both market conditions tied to the achievement of stock price hurdles and time-based requisite service vesting:

				Weighted
				Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Terms	Value
Options outstanding as of December 31, 2023	21,925,000	$	21.32	5.27	$	—
Options exercisable as of December 31, 2023	2,782,000		26.9	4.7		—
Options unvested as of December 31, 2023	19,143,000		20.50	5.35		—
Granted	2,952,500		2.42	—		—
Exercised	—		—	—		—
Forfeited	(12,311,500)		25.45	—		—
Options outstanding as of September 30, 2024	12,566,000	$	12.83	5.44	$	—
Options exercisable as of September 30, 2024	5,372,667		22.46	4.36		—
Options unvested as of September 30, 2024	7,193,333	$	5.63	6.24	$	—

The weighted average grant-date fair value of the market condition stock options granted during the nine months ended September 30, 2024 and 2023 was $0.49 and $4.32, respectively. There were no market condition stock options exercised during the nine months ended September 30, 2024 and 2023. The total fair value of the market condition stock options that vested was $25.5 million and $20.8 million during the nine months ended September 30, 2024 and 2023, respectively.

Compensation cost associated with market condition stock options represented approximately $9.3 million and $18.4 million of the total share-based payment expense recorded for the three months ended September 30, 2024 and 2023, respectively. Compensation cost associated with market condition stock options represented approximately $11.1 million and $53.6 million of the total share-based payment expense recorded for the nine months ended September 30, 2024 and 2023, respectively. Compensation costs associated with these awards are recognized as the requisite service period is rendered, regardless of when, if ever, the market condition is satisfied. Compensation cost for the nine months ended September 30, 2024 includes non-cash reversals due to forfeitures of unvested market condition stock options of during the first quarter of 2024. Forfeitures represent the expense related to awards for which the requisite service period was not met. The non-cash compensation expense reversals were offset by compensation costs of $23.2 million during the nine months ended September 30, 2024. As of September 30, 2024, there was approximately $7.8 million of unrecognized compensation cost related to market condition stock option awards to be recognized over the weighted average remaining period of 1.76 years.

As of September 30, 2024, there were 2,513,333 unvested market condition stock options for which the employee requisite service period had not been rendered but were expected to vest. The aggregate intrinsic value of these unvested

market condition stock options was $0 as of September 30, 2024. The weighted average exercise price of these unvested market condition stock options was $7.87 and the weighted average remaining contractual term was 5.63 years as of September 30, 2024.

Restricted Stock and Restricted Stock Unit Awards

The following table reflects the restricted stock and restricted stock unit activity for the nine months ended September 30, 2024 (in thousands except share amounts):

		Weighted		Aggregate
		Average Grant Date		Intrinsic
	Shares	Fair Value		Value
Unvested restricted stock as of December 31, 2023	6,732,884	$	15.66	$	30,298
Granted	1,075,557		2.81		—
Vested	(1,784,759)		15.81		—
Forfeited	(1,199,185)		17.22		—
Unvested restricted stock as of September 30, 2024	4,824,497	$	12.35	$	10,903

The weighted average grant-date fair value of the restricted stock and restricted stock unit awards granted during the nine months ended September 30, 2024 and 2023 was $2.81 and $12.57, respectively. The total fair value of restricted shares of stock and restricted stock unit awards that vested for the nine months ended September 30, 2024 and 2023 was $28.2 million and $41.0 million, respectively.

Compensation cost associated with restricted stock and restricted stock unit awards represented approximately $8.3 million and $15.0 million for the three months ended September 30, 2024 and 2023, respectively. Compensation cost associated with restricted stock and restricted stock unit awards represented approximately $27.3 million and $42.1 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was $39.2 million of unrecognized compensation cost related to restricted stock and restricted stock unit awards to be recognized over the weighted average period of 1.49 years.

Included in the total unvested restricted stock and restricted stock units as of September 30, 2024, there were 375,000 restricted stock units outstanding with a performance target. The Company recorded expense associated with the restricted stock units with a performance target of $0.4 million and $0.4 million for the three months ended September 30, 2024 and 2023, respectively. The Company recorded expense associated with the restricted stock units with a performance target of $1.7 million and $0.4 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 there was $1.4 million of unrecognized compensation cost related to the restricted stock units outstanding with a performance target to be recognized over the weighted average period of 1.83 years.

401(k) Savings & Retirement Plan

The Company issued 3,305,494 shares of common stock and 872,026 shares of common stock pursuant to the Plug Power Inc. 401(k) Savings & Retirement Plan during the nine months ended September 30, 2024 and 2023, respectively.

The Company’s expense for this plan was approximately $2.6 million and $3.0 million during the three months ended September 30, 2024 and 2023, respectively. The Company’s expense for this plan was approximately $8.9 million and $9.0 million during the nine months ended September 30, 2024 and 2023, respectively.

Non-Employee Director Compensation

The Company granted 83,085 shares of common stock and 13,662 shares of common stock to non-employee directors as compensation during the three months ended September 30, 2024 and 2023, respectively. The Company granted 210,315 shares of common stock and 35,444 shares of common stock to non-employee directors as compensation during the nine months ended September 30, 2024 and 2023, 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 during the three months ended September 30, 2024 and 2023, respectively. The Company’s share-based compensation expense in connection with non-employee director compensation was approximately $0.5 million and $0.3 million during the nine months ended September 30, 2024 and 2023, respectively.