Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

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 the employee stock purchase plan) is summarized in the following table:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Cost of product sales	$	911	$	796	$	2,152	$	1,681
Research and development	965		993		2,186		1,970
Selling, general and administrative	7,644		6,972		15,016		13,841
Total non-cash stock-based compensation expense	$	9,520	$	8,761	$	19,354	$	17,492

Service-Based Stock Options

During the three and six months ended June 30, 2024, the Company granted service-based options to purchase common stock of 133,225 and 640,387, respectively, and 67,760 and 535,717, respectively, for the same periods in 2023. The weighted-average grant-date fair value of service-based options granted during the three and six months ended June 30, 2024 was $27.85 and $28.14 per option, respectively, and $19.30 and $18.41, respectively, for the same periods in 2023.

Restricted Stock Units

During the three and six months ended June 30, 2024, the Company granted 48,500 and 586,925 restricted stock units, respectively, and 32,816 and 529,321, respectively, for the same periods in 2023. The weighted-average grant-date fair value of restricted stock units granted during the three and six months ended June 30, 2024 was $48.06 and $48.23 per unit, respectively, and $32.16 and $29.97, respectively, for the same periods in 2023.