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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2024
STOCK-BASED COMPENSATION | 13. STOCK-BASED COMPENSATION Equity Incentive Plans The Company has a single active equity incentive plan, the Rocket Lab 2021 Stock Option and Incentive Plan (the “2021 Plan”), with the objective of attracting and retaining available employees and directors by providing stock-based and other performance-based compensation. The 2021 Plan provides for the grant of equity awards to officers, employees, directors and other key employees as well as service providers which include incentive stock options, non-qualified stock options, restricted stock awards, unrestricted stock awards, restricted stock units or any combination of the foregoing any of which may be performance based, as determined by the Company’s Compensation Committee. An aggregate of 59,875,000 shares were initially reserved for the issuance of awards under the 2021 Plan. The number of shares reserved for issuance under the 2021 Plan automatically increases each January 1, beginning on January 1, 2022, by 5% of the outstanding number of shares of common stock on the immediately preceding December 31, or such lesser amount as determined by the plan administrator. The Company was authorized to issue up to 117,820,443 shares of common stock as equity awards to participants under the 2021 Plan as of June 30, 2024. There were 95,254,696 shares of common stock available for grant as of June 30, 2024. The Rocket Lab 2013 Stock Option and Grant Plan (the “2013 Plan”) was terminated, and accordingly, no shares are available for future issuance under the 2013 Plan following the closing of the Company’s business combination with Vector Acquisition Corporation in 2021. The 2013 Plan will continue to govern outstanding awards granted thereunder. Total stock-based compensation recorded in the condensed consolidated statements of operations and comprehensive loss during the three and six months ended June 30, 2024 and 2023 consisted of the following:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
Stock-based compensation |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Cost of revenues |  | $ | 3,673 |  |  | $ | 3,330 |  |  | $ | 7,176 |  |  | $ | 7,143 |
Research and development |  |  | 5,049 |  |  |  | 6,652 |  |  |  | 9,034 |  |  |  | 11,674 |
Selling, general and administrative |  |  | 5,233 |  |  |  | 5,282 |  |  |  | 10,838 |  |  |  | 10,483 |
Total stock-based compensation expense |  | $ | 13,955 |  |  | $ | 15,264 |  |  | $ | 27,048 |  |  | $ | 29,300 |
Options Options issued to all optionees under the 2013 Plan vest over four years from the date of issuance (or earlier vesting start date, as determined by the board of directors) as follows: 25% on the first anniversary of date of grant and the remaining vest monthly over the remaining vesting term. All options had vested as of June 30, 2024. Restricted Stock Units During the six months ended June 30, 2024 and 2023, the Company granted 13,684,650 and 5,816,224 restricted stock units, respectively, to certain key employees pursuant to the 2021 Plan. The time-based service vesting condition is generally satisfied over periods of approximately four years as the employees provide service. As of June 30, 2024, the total unrecognized compensation expense related to unvested performance-based restricted stock units granted under the 2013 Plan and 2021 Plan was $109,879 and will be recognized upon vesting. 2021 Employee Stock Purchase Plan In August 2021, the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) was approved to reserve 9,980,000 shares of common stock for issuance for awards in accordance with the terms of the 2021 ESPP. In addition, the number of shares reserved for issuance will ultimately increase on January 1 of each year from 2022 to 2031 by the lesser of (i) 9,980,000 shares of common stock, (ii) 1% of the number of shares of common stock outstanding as of the close of business on the immediately preceding December 31 or (iii) the number of common stock shares as determined by the Company’s board of directors. The purpose of the 2021 ESPP is to enable eligible employees to use payroll deductions to purchase shares of common stock and thereby acquire an interest in the Company. Eligible employees are offered shares through a 12-month offering period, which consists of two consecutive 6-month purchase periods. Employees may purchase a limited amount of shares of our stock at a discount of up to 15% of the lesser of the fair market value at the beginning of the offering period or the end of each 6-month purchase period. During the six months ended June 30, 2024 and 2023, 726,035 shares and 681,018 shares of common stock were issued under the 2021 ESPP, respectively. As of June 30, 2024, 20,930,982 shares remain available for issuance under the 2021 ESPP. Total ESPP stock-based compensation recorded in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 was $721 and $1,660, respectively. Total ESPP stock-based compensation recorded in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023 was $626 and $1,396, respectively. As of June 30, 2024, the total unrecognized compensation expense related to the 2021 ESPP was $837 and will be recognized over the remaining offering period.

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