Stock Based Compensation | Note 12 – Stock Based Compensation 2014 Equity Incentive Plan and 2021 Equity Incentive Plan At June 30, 2022, the Company had 27,181,312 shares of common stock underlying stock options outstanding under the 2014 Plan. Upon the Closing, the 2014 Plan was terminated and no additional grants will be made under the 2014 Plan. On December 8, 2021 and in connection with the Closing, the Company adopted the Solid Power, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan originated with 18,900,000 shares of Common Stock available for issuance. Beginning on January 1, 2022, the number of shares of common stock available for issuance under the 2021 Plan shall increase each year by an amount equal to the lesser of (i) 18,900,000 shares of Common Stock (ii) five percent of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year; or (iii) a number of shares of common stock determined by the administrator no later than the last day of the immediately preceding fiscal year. As of June 30, 2022, the 2021 Plan permitted the Company to grant up to 24,991,018 shares of common stock to its employees, directors, and consultants, as designated by the board of directors. Awards may be issued in the form of stock options, stock appreciation rights, restricted stock, and restricted stock units. The Company believes that such awards better align the interests of its employees with those of its stockholders. The fair value of stock options and restricted stock units (“RSUs”) issued to employees and directors is recognized as compensation expense over the period of service that generally coincides with the vesting period of the award. When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur. For the three months and six months ended June 30, 2022, the Company recognized compensation costs totaling: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Equity-based compensation cost related to RSUs $ 514 $ — $ 514 $ — Equity-based compensation cost related to stock options 1,800 147 3,396 217 Total equity-based compensation cost $ 2,314 $ 147 $ 3,910 $ 217 The compensation costs are allocated ratably across operating expenses within the accompanying condensed consolidated statements of operations. Stock Options Options granted under the 2014 Plan generally had a ten-year term and vest as to 1/4th of these shares after one year after the initial date of service of a service provider and with the balance of the shares vesting in a series of 36 successive equal monthly installments following the first vesting date. Option awards under the 2014 Plan were generally granted with an exercise price equal to the fair market value of Legacy Solid Power’s common stock at the date of grant. Certain option awards issued under the 2014 Plan provide for accelerated vesting if there is a change in control (as defined in the plan agreements). Options granted under the 2021 Plan generally have a ten-year term and vest as to 1/4th of these shares each year, commencing after one year after the initial date of grant. Option awards under the 2021 Plan are generally granted with an exercise price equal to the fair market value of Solid Power’s common stock at the date of grant. Certain option awards issued under the 2021 Plan provide for accelerated vesting if there is a change in control (as defined in the plan agreements). The fair value for purposes of determining the compensation cost of each option award is estimated on the date of grant using a Black-Scholes option valuation model that uses the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of comparable companies. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of each option grant during the six months ended June 30, 2022 and 2021 was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions used: Six months ended June 30, 2022 2021 Approximate risk ‑ free rate 2.84 % 0.80 % Volatility 44.69 % 46.94 % Average expected life 6 years 6 years Dividend yield 0 % 0 % Weighted ‑ average grant date fair value $ 7.26 $ 2.18 Estimated fair value of total options granted $ 5,659 $ 1,004 Future compensation costs related to the unvested portion of stock options at June 30, 2022 and 2021 was $25,316 and $1,469 , respectively, over a period of four years . The following table summarizes stock options granted under the 2021 Plan during the six months ended June 30, 2022 and under the 2014 Plan during the year ended December 31, 2021, respectively: June 30, 2022 December 31, 2021 2021 Plan stock option grants 1,674,284 — 2014 Plan stock option grants — 12,285,359 Restricted Stock Units Effective April 1, 2022, the Company began granting RSUs in accordance with the terms of the 2021 Plan. The grant date fair value of RSUs awarded are determined based on the Company’s closing common share price on the NASDAQ on the trading day preceding the grant date. RSU awards for employees generally vest 1/4 th per year commencing on the first anniversary of the grant date. RSU awards upon initial service as a director vest 1/3rd per year commencing on the first anniversary of the grant date. Annual RSU awards to directors generally fully vest on the one year anniversary of the grant date. Upon vesting, granted RSUs entitle the grantee to receive one share of common stock of the Company at no additional cost. Holders of unvested RSUs do not have voting or dividend rights. The following table summarizes non-vested RSUs at June 30, 2022 and the changes for the period ended June 30, 2022: Weighted Average Grant RSU Shares Date Fair Value Non-vested, December 31, 2021 — $ — Granted 970,857 7.64 Vested (29,108) 7.26 Forfeited (767) 8.67 Non-vested, June 30, 2022 940,982 $ 7.65 Future compensation costs related to the unvested portion of RSUs at June 30, 2022 was $ 6,366 over a period of four years . 2021 Employee Stock Purchase Plan The 2021 Employee Stock Purchase Plan (“2021 ESPP”) originated with 3,778,000 shares of common stock available for issuance. As of June 30, 2022, 5,453,579 shares remained available for issuance. Beginning on January 1, 2022, the number of shares of Common Stock available for issuance under the 2021 ESPP shall increase each year by an amount equal to the lesser of (i) 3,778,000 shares of Common Stock; (ii) one percent of the total number of shares of Common Stock outstanding on the last day of the immediately preceding fiscal year; or (iii) a number of shares of Common Stock determined by the administrator no later than the last day of the immediately preceding fiscal year. As of June 30, 2022, the 2021 ESPP permitted the Company to issue up to 5,463,579 shares of common stock. At June 30, 2022, no shares of common stock had been issued under the 2021 ESPP. The 2021 ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. Substantially all employees are eligible to participate and, through payroll deductions, can purchase shares on dates determined by the administrator. However, with respect to the Section 423 Component, an employee may not be granted rights to purchase stock under the ESPP if the employee, immediately after the grant, would own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of the Company’s common stock. The purchase price per share sold pursuant to the 2021 ESPP will be the lower of (i) 85% of the fair market value of common stock on the enrollment or (ii) 85% of the fair market value on the exercise date. Each offering period will span up to six months. Purchases may be up to 15% of qualified compensation, with an annual limit of $25,000 . |