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Share-based Compensation | 9 Months Ended
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Sep. 30, 2022
Share-Based Payment Arrangement [Abstract] |
Share-based Compensation | NOTE 14. SHARE-BASED COMPENSATION Upon Closing of the Business Combination, the Board approved the Cipher Mining Inc. 2021 Incentive Award Plan (the “Incentive Award Plan”). The Incentive Award Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, RSUs and other stock or cash-based awards to employees, consultants and directors. Upon vesting of an award, the Company may either issue new shares or reissue treasury shares. Initially, up to 19,869,312 shares of Common Stock were available for issuance under awards granted pursuant to the Incentive Award Plan. In addition, the number of shares of Common Stock available for issuance under the Incentive Equity Plan will be increased on January 1 of each calendar year beginning in 2022 and ending in 2031 by an amount equal to the lesser of (a) three percent (3%) of the total number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares determined by the Board. On January 1, 2022, this resulted in an increase of 7,478,382 shares of Common Stock available for issuance under the Incentive Award Plan. As of September 30, 2022, 1,638,142 shares of Common Stock are available for issuance under the Incentive Award Plan. The Company recognized total share-based compensation for the following categories of awards during the periods indicated (amounts in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2022 |  |  | September 30, 2022 |
Service-Based RSUs |  | $ | 7,078 |  |  | $ | 19,936 |
Performance-Based RSUs |  |  | 3,416 |  |  |  | 10,136 |
Total share-based compensation expense |  | $ | 10,494 |  |  | $ | 30,072 |
Service-based RSUs A summary of the Company's unvested Service-Based RSU activity for the nine months ended September 30, 2022 is shown below:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Unvested at January 1, 2022 |  |  | 6,798,238 |  |  | $ | 8.04 |
Granted |  |  | 9,108,086 |  |  |  | 1.90 |
Forfeited |  |  | (205,048 | ) |  |  | 6.34 |
Vested |  |  | (1,802,123 | ) |  |  | 7.55 |
Unvested at September 30, 2022 |  |  | 13,899,153 |  |  | $ | 4.10 |
As of September 30, 2022, there was approximately $35.5 million of unrecognized compensation expense related to unvested Service-Based RSUs, which is expected to be recognized over a weighted-average vesting period of approximately 1.8 years. If not fully vested upon grant, Service-Based RSUs awarded generally vest in equal installments on the first three or four anniversaries of the vesting commencement date as determined by the Board, which will generally coincide with the timing when the employee or consultant began to provide services to the Company, and which may precede the grant date. Vesting is subject to the award recipient's continuous service on the applicable vesting date; provided, that if the award recipient’s employment is terminated by the Company without “cause”, due to award recipient’s death or permanent disability, or, for some award recipients, by the award recipient for “good reason” (if applicable, as such term or similar term may be defined in any employment, consulting or similar service agreement between award recipient and the Company), all unvested Service-Based RSUs will vest in full. In addition, in the event of a change in control, any unvested Service-Based RSUs will vest subject to the award recipient's continuous service to the Company through such change in control. In addition, if the $10 billion market capitalization milestone (described further below) is achieved and the Chief Executive Officer (“CEO”) remains in continuous service through such achievement, any then-unvested Service-Based RSUs awarded to the CEO will also vest. Performance-based RSUs There was no activity for unvested Performance-Based RSUs during the nine months ended September 30, 2022. There were 4,257,710 unvested Performance-Based RSUs at a weighted average grant date fair value of $7.76 as of both September 30, 2022 and December 31, 2021. There was approximately $21.2 million of unrecognized compensation expense related to unvested Performance-Based RSUs, which is expected to be recognized over a weighted-average derived service period of approximately 1.7 years. One-third of the Performance-Based RSUs will vest upon the Company achieving a market capitalization equal to or exceeding $5 billion, $7.5 billion and $10 billion, in each case over a 30-day lookback period and subject to the CEO’s continuous service through the end of the applicable 30-day period. In the event of a change in control and CEO’s continuous service through such change in control, the per share price (plus the per share value of any other consideration) received by the Company’s stockholders in such change in control will be used to determine whether any of the market capitalization milestones are achieved (without regard to the 30-day lookback period). Any Performance-Based RSUs that do not vest prior to the CEO’s termination of service or, if earlier, in connection with a change in control will be forfeited for no consideration.

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