Employee Benefit Plans

3 Months Ended

Mar. 31, 2024

Employee Benefit Plans

Employee Benefit Plans

19. 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 $3.2 million to the Plug Power Inc.

401(k) Savings & Retirement Plan and quarterly Board compensation, were $10.4 million and $40.2 million for the three months ended March 31, 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
	March 31, 2024		March 31, 2023
Cost of sales	$	2,006	$	2,677
Research and development		2,342		2,283
Selling, general and administrative		6,023		35,221
	$	10,371	$	40,181

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 three months ended March 31, 2024:

				Weighted
		Weighted		Average
		Average		Remaining		Aggregate
		Exercise		Contractual		Intrinsic
	Shares	Price		Terms		Value
Options outstanding at December 31, 2023	17,336,362	$	11.37		7.86	$	11,391
Options exercisable at December 31, 2023	8,288,944		11.84		6.18		7,250
Options unvested at December 31, 2023	9,047,418		10.94		9.39		4,141
Granted	313,000		3.28		—		—
Exercised	(20,000)		2.10		—		—
Forfeited	(920,300)		19.42		—		—
Options outstanding at March 31, 2024	16,709,062	$	10.79		7.60	$	3,858
Options exercisable at March 31, 2024	8,334,755		11.93		5.90		3,792
Options unvested at March 31, 2024	8,374,307	$	9.65		9.29	$	66

The weighted average grant date fair value of the service stock options granted during the three months ended March 31, 2024 and 2023 was $2.41 and $10.48, respectively. The total intrinsic fair value of service stock options exercised during the three months ended March 31, 2024 and 2023 was $30 thousand and $1.3 million, respectively. The total fair value of the service stock options that vested during the three months ended March 31, 2024 and 2023 was approximately $6.1 million and $7.5 million, respectively.

Compensation cost associated with service stock options represented approximately $6.9 million and $8.2 million of the total share-based payment expense recorded for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was approximately $40.7 million of unrecognized compensation cost related to service stock option awards to be recognized over the weighted average remaining period of 1.99 years.

Performance Stock Option Awards

The following table reflects the performance stock option award activity for the three months ended March 31, 2024. Solely for the purposes of this table, the number of performance options is based on participants earning the maximum number of performance options (i.e. 200% of the target number of performance options):

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Terms	Value
Options outstanding at December 31, 2023	21,925,000	$	21.32	5.27	$	—
Options exercisable at December 31, 2023	2,782,000		26.9	4.7		—
Options unvested at December 31, 2023	19,143,000		20.50	5.35		—
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited	(2,250,000)		—	—		—
Options outstanding at March 31, 2024	19,675,000	$	21.44	4.95	$	—
Options exercisable at March 31, 2024	2,782,000		26.92	4.48		—
Options unvested at March 31, 2024	16,893,000	$	20.54	5.03	$	—

The weighted average grant-date fair value of the performance stock options granted during the three months ended March 31, 2024 and 2023 was $0, respectively. There were no performance stock options exercised during the three months ended March 31, 2024 or 2023. The total fair value of the performance stock options that vested was $0 during the three months ended March 31, 2024 and 2023, respectively.

Compensation cost associated with performance stock options represented approximately ($6.1) million and $17.4 million of the total share-based payment expense recorded for the three months ended March 31, 2024 and 2023, respectively. Compensation cost for the three months ended March 31, 2024 includes non-cash reversals due to forfeitures of unvested performance stock options of ($15.2) million during the period. The non-cash compensation expense reversals were offset by compensation costs of $9.1 million during the three months ended March 31, 2024. As of March 31, 2024, there was approximately $21.0 million of unrecognized compensation cost related to performance stock option awards to be recognized over the weighted average remaining period of 1.38 years.

As of March 31, 2024, there were 3,904,333 unvested performance 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 performance stock options was $0 as of March 31, 2024. The weighted average exercise price of these unvested performance stock options was $14.66 and the weighted average remaining contractual term was 5.54 years as of March 31, 2024.

Restricted Common Stock and Restricted Stock Unit Awards

The following table reflects the restricted stock and restricted stock unit activity for the three months ended March 31, 2024 (in thousands except share amounts):

		Weighted		Aggregate
		Average Grant Date		Intrinsic
	Shares	Fair Value		Value
Unvested restricted stock and restricted stock units at December 31, 2023	6,732,884	$	15.66	$	30,298
Granted	17,000		5.23		—
Vested	(230,675)		28.42		—
Forfeited	(604,353)		18.69		—
Unvested restricted stock and restricted stock units at March 31, 2024	5,914,856	$	14.82	$	20,347

The weighted average grant-date fair value of the restricted common stock and restricted stock unit awards granted during the three months ended March 31, 2024 and 2023 was $5.23 and $15.44, respectively. The total fair value of restricted shares of common stock and restricted stock unit awards that vested for the three months ended March 31, 2024 and 2023 was $6.6 million and $13.5 million, respectively.

Compensation cost associated with restricted common stock and restricted stock unit awards represented approximately $9.6 million and $14.6 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was $63.3 million of unrecognized compensation cost related to restricted stock and restricted common stock unit awards to be recognized over the weighted average period of 1.85 years.

Included in the total unvested restricted common stock and restricted stock units as of March 31, 2024, there were 375,000 restricted common stock units outstanding with a performance target. The Company recorded expense associated with the restricted common stock units with a performance target of $0.6 million for the three months ended March 31, 2024. As of March 31, 2024 there was $2.5 million of unrecognized compensation cost related to the restricted common stock units outstanding with a performance target to be recognized over the weighted average period of 2.33 years.

401(k) Savings & Retirement Plan

The Company issued 895,258 shares of common stock and 219,970 shares of common stock pursuant to the Plug Power Inc. 401(k) Savings & Retirement Plan during the three months ended March 31, 2024 and 2023, respectively.

The Company’s expense for this plan was approximately $3.2 million and $3.0 million for the three months ended March 31, 2024 and 2023, respectively.

Non-Employee Director Compensation

The Company granted 53,598 shares of common stock and 10,316 shares of common stock to non-employee directors as compensation for the three months ended March 31, 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 $0.2 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively.