Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

The Vericel Corporation 2022 Omnibus Incentive Plan (“2022 Plan”) was approved on April 27, 2022, and provides incentives through the grant of stock options, stock appreciation rights, restricted stock awards and restricted stock units. The exercise price of stock options granted under the 2022 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The 2022 Plan replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan, the 2009 Second Amended and Restated Omnibus Incentive Plan, the 2017 Omnibus Incentive Plan, and the Amended and Restated 2019 Omnibus Incentive Plan (collectively the “Prior Plans”), and no new grants have been granted under the Prior Plans after approval of the 2022 Plan. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the number of shares available for issuance under the 2022 Plan.

Stock Compensation Expense

Non-cash stock-based compensation expense (service-based stock options, restricted stock units and employee stock purchase plan) is summarized in the following table:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Cost of product sales	$	660	$	840	$	2,341	$	2,992
Research and development	892		1,273		2,862		4,143
Selling, general and administrative	6,372		6,991		20,213		22,308
Total non-cash stock-based compensation expense	$	7,924	$	9,104	$	25,416	$	29,443

Service-Based Stock Options

During the three and nine months ended September 30, 2023, the Company granted service-based options to purchase common stock of 58,500 and 594,217, respectively, and 42,890 and 1,206,539, respectively, for the same periods in 2022. The weighted-average grant-date fair value of service-based options granted during the three and nine months ended September 30, 2023 was $22.36 and $18.80 per option, respectively, and $15.58 and $20.55, respectively, for the same periods in 2022.

Restricted Stock Units

During the three and nine months ended September 30, 2023, the Company granted 23,520 and 552,841 restricted stock units, respectively, and 16,734 and 399,502, respectively, for the same periods in 2022. The weighted-average grant-date fair value of restricted stock units granted during the three and nine months ended September 30, 2023 was $36.51 and $30.24 per unit, respectively, and $27.52 and $34.35, respectively, for the same periods in 2022.