Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Employee Benefit Plans

Employee Benefit Plans

20.  Employee Benefit Plans

2011 Stock Option and Incentive Plan

On May 12, 2011, the Company’s stockholders approved the 2011 Stock Option and Incentive Plan (the “2011 Plan”). The 2011 Plan provided for the issuance of up to a maximum number of shares of common stock equal to the sum of (i) 1,000,000, plus (ii) the number of shares of common stock underlying any grants pursuant to the 2011 Plan or the Plug Power Inc. 1999 Stock Option and Incentive Plan that are forfeited, canceled, repurchased or are terminated (other than by exercise). The shares may be issued pursuant to stock options, stock appreciation rights, restricted stock awards and certain other equity-based awards granted to employees, directors and consultants of the Company. No grants may be made under the 2011 Plan after May 12, 2021. Through various amendments to the 2011 Plan approved by the Company’s stockholders, the number of shares of the Company’s common stock authorized for issuance under the 2011 Plan has been increased to 42.4 million. For the years ended December 31, 2020, 2019, and 2018, the Company recorded expense of approximately $14.4 million, $8.8 million, and $7.4 million, respectively, in connection with the Third Amended and Restated 2011 Stock Option and Incentive Plan.

At December 31, 2020, there were outstanding options to purchase approximately 10.2 million shares of Common Stock and 0.8 million shares available for future awards under the 2011 Plan, including adjustments for other types of

share-based awards. Options for employees issued under this plan generally vest in equal annual installments over three years and expire ten years after issuance. Options granted to members of the Board generally vest one year after issuance. To date, options granted under the 2011 Plan have vesting provisions ranging from one to three years in duration and expire ten years after issuance.

Compensation cost associated with employee stock options represented approximately $6.8 million, $6.0 million, and $6.4 million of the total share-based payment expense recorded for the years ended December 31, 2020, 2019, and 2018, respectively. The Company estimates the fair value of stock options using a Black-Scholes valuation model, and the resulting fair value is recorded as compensation cost on a straight-line basis over the option vesting period. Key inputs and assumptions used to estimate the fair value of stock options include the grant price of the award, the expected option term, volatility of the Company’s stock, an appropriate risk-free rate, and the Company’s dividend yield. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company. The assumptions made for purposes of estimating fair value under the Black-Scholes model for the 3,509,549, 3,221,892 and 2,679,667 options granted during the years ended December 31, 2020, 2019, and 2018, respectively, were as follows:

	2020	2019	2018
Expected term of options (years)	6	6	6
Risk free interest rate	0.37% - 1.37%	1.52% - 2.53%	2.81% - 2.88%
Volatility	64.19% - 68.18%	69.32% - 87.94%	98.31% - 98.89%

There was no expected dividend yield for the employee stock options granted.

The Company used the simplified method in determining its expected term of all its stock option grants in all periods presented. The simplified method was used because the Company does not believe historical exercise data provides a reasonable basis for the expected term of its grants, due primarily to the limited number of stock option exercises that occurred.  The Company expects to cease using the simplified method to determine its expected term for stock option grants in 2021.  The estimated stock price volatility was derived from the Company’s actual historic stock prices over the past six years, which represents the Company’s best estimate of expected volatility.

A summary of stock option activity for the year December 31, 2020 is as follows (in thousands except share amounts):

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Terms	Value
Options outstanding at December 31, 2019	23,013,590	$	2.48	6.6	$	22,277
Granted	3,509,549		12.79	—		—
Exercised	(16,159,742)		2.55	—		—
Forfeited	(73,249)		6.32	—		—
Expired	(5,650)		4.78	—		—
Options outstanding at December 31, 2020	10,284,498	$	5.78	7.8	$	289,316
Options exercisable at December 31, 2020	4,084,124		2.31	5.8		129,068
Options unvested at December 31, 2020	6,200,374	$	8.07	9.1	$	160,248

The weighted average grant-date fair value of options granted during the years ended December 31, 2020, 2019, and 2018 was $7.22, $1.67, and $1.55, respectively. As of December 31, 2020, there was approximately $8.1 million of unrecognized compensation cost related to stock option awards to be recognized over the next three years. The total fair value of stock options that vested during the years ended December 31, 2020 and 2019 was approximately $5.9 million and $6.1 million, respectively.

Restricted stock awards generally vest in equal installments over a period of one to three years. Restricted stock awards are valued based on the closing price of the Company’s common stock on the date of grant, and compensation cost is recorded on a straight-line basis over the share vesting period. The Company recorded expense associated with its restricted stock awards of approximately $7.6 million, $2.8 million, and $966 thousand, for the years ended December 31,

2020, 2019, and 2018, respectively. Additionally, for the years ended December 31, 2020, 2019, and 2018, there was $41.5 million, $8.4 million, and $3.9 million respectively, of unrecognized compensation cost related to restricted stock awards to be recognized over the next three years.

A summary of restricted stock activity for the year ended December 31, 2020 is as follows (in thousands except share amounts):

		Aggregate
		Intrinsic
	Shares	Value
Unvested restricted stock at December 31, 2019	4,608,560	$	—
Granted	3,227,149		—
Vested	(1,896,901)		—
Forfeited	(64,166)
Unvested restricted stock at December 31, 2020	5,874,642	$	199,209

401(k) Savings & Retirement Plan

The Company offers a 401(k) Savings & Retirement Plan to eligible employees meeting certain age and service requirements. This plan permits participants to contribute 100% of their salary, up to the maximum allowable by the Internal Revenue Service regulations. Participants are immediately vested in their voluntary contributions plus actual earnings or less actual losses thereon. Participants are vested in the Company’s matching contribution based on years of service completed. Participants are fully vested upon completion of three years of service. During 2018, the Company began funding its matching contribution in a combination of cash and common stock. Accordingly, the Company has issued 403,474 shares and 841,539 shares of common stock to the Plug Power Inc. 401(k) Savings & Retirement Plan during 2020 and 2019, respectively.

The Company’s expense for this plan was approximately $2.6 million, $1.9 million, and $1.8 million for the years ended December 31, 2020, 2019, and 2018, respectively.

Non-Employee Director Compensation

Each non-employee director is paid an annual retainer for their services, in the form of either cash or stock compensation. The Company granted 36,175, 114,285, and 107,389 shares of stock to non-employee directors as compensation for the years ended December 31, 2020, 2019, and 2018, 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 for this plan was approximately $228 thousand, $243 thousand, and $261 thousand for the years ended December 31, 2020, 2019, and 2018, respectively.