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Benefit Plans | 12 Months Ended
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Oct. 31, 2022
Benefit Plans |
Benefit Plans | Note 14. Benefit Plans We have stockholder approved equity incentive plans, a stockholder approved Employee Stock Purchase Plan and an employee tax-deferred savings plan, which are described in more detail below. 2018 Omnibus Incentive Plan The Company’s 2018 Omnibus Incentive Plan (as amended and restated from time to time, the “2018 Incentive Plan”) authorizes grants of stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, performance units and incentive awards to key employees, directors, consultants and advisors. Stock options, RSAs and SARs have restrictions as to transferability. Stock option exercise prices are fixed by the Company’s Board of Directors but shall not be less than the fair market value of our common stock on the date of the grant. SARs may be granted in conjunction with stock options. At the May 8, 2020 reconvened 2020 Annual Meeting of Stockholders, the Company’s stockholders approved the amendment and restatement of the original 2018 Incentive Plan, which authorizes the Company to issue up to 4,000,000 additional shares of the Company’s common stock pursuant to awards granted under the 2018 Incentive Plan and provides for an increase in the annual limit on the grant-date fair value of awards to any non-employee director of the Company from $200,000 to $250,000. Following the approval of the amended and restated 2018 Incentive Plan by the Company’s stockholders in May of 2020, the 2018 Incentive Plan provided the Company with the authority to issue a total of 4,333,333 shares of the Company’s common stock, 1,000,000 shares of which were reserved for settlement of RSUs granted pursuant to an employment agreement, effective as of August 26, 2019, between the Company and Jason Few, our President and Chief Executive Officer (the “Sign-On Award”). The Sign-On Award was contingent upon obtaining stockholder approval of a sufficient number of additional shares under the 2018 Incentive Plan. The Company previously recorded the grants as a liability and, after obtaining such stockholder approval, reclassified the liability to additional paid-in capital. On April 8, 2021, the Company’s stockholders approved another amendment and restatement of the 2018 Incentive Plan to authorize the Company to issue up to 8,000,000 additional shares of the Company’s common stock pursuant to awards under the 2018 Incentive Plan. Following the approval of the amendment and restatement, the Company has the authority to issue a total of 12,333,333 shares of the Company’s common stock under the 2018 Incentive Plan. Of the 12,333,333 shares of the Company’s common stock authorized to be issued under the 2018 Incentive Plan, 7,535,088 remained available for grant as of October 31, 2022. Long-Term Incentive Plans The Company’s Board of Directors periodically approves Long Term Incentive Plans which include performance-based awards tied to the Company’s common stock price as well as time-vesting awards. None of the awards granted as part of Long-Term Incentive Plans include any dividend equivalent or other stockholder rights. To the extent the awards are earned, they may be settled in shares or cash of an equivalent value at the Company’s option. These plans are further described below. Fiscal Year 2020 Long Term Incentive Plan: On August 24, 2020, the Company’s Board of Directors approved a Long-Term Incentive Plan for fiscal year 2020 (the “FY 2020 LTI Plan”) as a sub-plan consisting of awards made under the 2018 Incentive Plan. The participants in the FY 2020 LTI Plan are members of senior management. The performance shares granted in fiscal year 2020 will be earned over the performance period ending on October 31, 2022 but will remain subject to a continued service-based vesting requirement until the third anniversary of the date of grant. The FY 2020 LTI Plan consists of three award components:
| 1) | Relative total shareholder return (“TSR”) performance share unit (“PSU”) awards. The performance goal for the relative TSR PSUs is the TSR of the Company relative to the TSR of the Russell 2000 from May 8, 2020 through October 31, 2022. The Compensation Committee established the performance assessment criteria for the relative TSR PSUs as the TSR of the Company relative to the TSR of the Russell 2000, with the award calibration being 100% plus or minus 0.5 x the difference between the Company’s TSR and the Russell 2000 Index composite TSR. The award is capped at 200% of the target number of PSUs, and award is further capped at 100% of the target number of PSUs if the Company’s absolute TSR over the performance period is negative. The Company’s TSR is calculated by subtracting the Company’s beginning stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on the last trading day immediately prior to May 8, 2020) from the ending stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2022), adding any dividends during the period, and then dividing the result by the Company’s beginning stock price. The Company calculated the performance payout percentage of 112.9% and accordingly has reserved shares equal to this percentage of the target number
|  | of PSUs, subject to vesting based on continued service until August 24, 2023 (the third anniversary of the grant date).
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| 2) | Absolute TSR PSU awards. The performance goal for the absolute TSR PSUs is an increase in the Company’s stock price from May 8, 2020 through October 31, 2022, with award calibration being based on a specified percentage increase in the price of the Company’s common stock over the average closing price of the Company’s common stock over the 20 consecutive trading days ending on the last trading day immediately prior to May 8, 2020, which was $1.8765. Specifically, a 50% increase earned 50% of the target award, a 100% increase earned 100% of the target award and a 150% increase earned 200% of the target award. Each price hurdle was required to be met and was met for 20 consecutive trading days during the performance period. The Compensation Committee certified achievement of a 150% increase during fiscal year 2021, resulting in an award percentage of 200%. As a result, the Company has reserved shares equal to 200% of the target number of PSUs, subject to vesting based on continued service until August 24, 2023 (the third anniversary of the grant date).
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| 3) | Time-vesting restricted stock units. The time-vesting RSUs granted in fiscal year 2020 vest at a rate of one-third of the total number of RSUs on each of the first three anniversaries of the date of grant.
​ Fiscal Year 2021 Long Term Incentive Plan: On November 24, 2020, the Company’s Board of Directors approved a Long-Term Incentive Plan for fiscal year 2021 (the “FY 2021 LTI Plan”) as a sub-plan consisting of awards made under the 2018 Incentive Plan. The participants in the FY 2021 LTI Plan are members of senior management. The FY 2021 LTI Plan consists of three award components:
| 1) | Relative TSR PSU awards. The PSUs granted during the year ended October 31, 2021 will be earned over the performance period ending on October 31, 2023, but will remain subject to a continued service-based vesting requirement until the third anniversary of the date of grant. The performance measure for the relative TSR PSUs is the TSR of the Company relative to the TSR of the Russell 2000 from November 1, 2020 through October 31, 2023. The Compensation Committee established the performance assessment criteria for the relative TSR PSUs as the TSR of the Company relative to the TSR of the Russell 2000, with the award calibration being 100% plus or minus 0.5 x the difference between the Company’s TSR and the Russell 2000 Index composite TSR. The award is capped at 200% of the target number of PSUs, and the award is further capped at 100% of the target number of PSUs if the Company’s absolute TSR over the performance period is negative. The Company’s TSR is calculated by subtracting the Company’s beginning stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 30, 2020) from the ending stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2023), adding any dividends during the period, and then dividing the result by the Company’s beginning stock price. Any PSUs that are earned based on performance will be earned on the date that the Compensation Committee certifies the achievement of the applicable level of relative TSR. Given that the performance period is still open, the Company has reserved shares equal to 200% of the target number of PSUs, subject to performance during the remaining performance period as well as vesting based on continued service until November 24, 2023 (the third anniversary of the grant date).
| 2) | Absolute TSR PSU awards. The performance measure for the absolute TSR PSUs is an increase in the Company’s stock price during the performance period of November 1, 2020 through October 31, 2023 with the award calibration being based on a specified percentage increase in the price of the Company’s common stock over the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 30, 2020, which was $2.27. Specifically, a 25% increase earns 50% of the target award, a 50% increase earns 100% of the target award and a 100% increase earns 200% of the target award. Each price hurdle was required to be met and was met for 20 consecutive trading days during the performance period. The Compensation Committee certified achievement of a 150% increase during fiscal year 2021, resulting in an award percentage of 200%. As a result, the Company has reserved shares equal to 200% of the target number of PSUs, subject to vesting based on continued service until November 24, 2023 (the third anniversary of the grant date).
| 3) | Time-vesting restricted stock units. The time-vesting RSUs granted during the year ended October 31, 2021 vest at a rate of one-third of the total number of RSUs on each of the first three anniversaries of the date of grant.
Fiscal Year 2022 Long Term Incentive Plan: On December 10, 2021, the Company’s Board of Directors approved a Long-Term Incentive Plan for fiscal year 2022 (the “FY 2022 LTI Plan”) as a sub-plan consisting of awards made under the 2018 Incentive Plan. The participants in the FY 2022 LTI Plan are members of senior management. The FY 2022 LTI Plan consists of two award components:
| 1) | Relative TSR PSU awards. The PSUs granted during the year ended October 31, 2022 will be earned over the performance period ending on October 31, 2024, but will remain subject to a continued service-based vesting requirement until the third anniversary of the date of grant. The performance measure for the relative TSR performance units is the TSR of the Company relative to the TSR of the Russell 2000 from November 1, 2021 through October 31, 2024. The Compensation Committee established the performance assessment criteria for the relative TSR PSUs as the TSR of the Company relative to the TSR of the Russell 2000, with the award calibration being 100% plus or minus 0.5 x the difference between the Company’s TSR and the Russell 2000 Index composite TSR. The award is capped at 200% of the target number of PSUs, and the award is further capped at 100% of the target number of PSUs if the Company’s absolute TSR over the performance period is negative. The Company’s TSR is calculated by subtracting the Company’s beginning stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2021) from the ending stock price (defined as the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2024), adding any dividends during the period, and then dividing the result by the Company’s beginning stock price. Given that the performance period is still open, the Company has reserved shares equal to 200% of the target number of PSUs, subject to performance during the remaining performance period as well as vesting based on continued service until December 10, 2024 (the third anniversary of the grant date).
| 2) | Time-vesting restricted stock units. The time-vesting RSUs granted during the year ended October 31, 2022 will vest at a rate of one-third of the total number of RSUs on each of the first three anniversaries of the date of grant.
Other Equity Incentive Plans The Company’s 2006 and 2010 Equity Incentive Plans remain in effect only to the extent of awards outstanding under the plans as of October 31, 2022. Share-based compensation was reflected in the Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended October 31,
​ |  | 2022 |  | 2021 | ​ | 2020
Cost of revenues | ​ | $ | 706 | ​ | $ | 493 | ​ | $ | 344
Administrative and selling expense | ​ | ​ | 5,418 | ​ | ​ | 3,593 | ​ | ​ | 1,424
Research and development expense | ​ | ​ | 456 | ​ | ​ | 111 | ​ | ​ | 54
​ | ​ | $ | 6,580 | ​ | $ | 4,197 | ​ | $ | 1,822
​ Stock Options We account for stock options awarded to non-employee directors under the fair value method. There were no options granted in fiscal years 2022, 2021 or 2020. ​ The following table summarizes our stock option activity for the year ended October 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | Weighted- Average |  |  | ​
Options | ​ | Option Shares | ​ | Price
Outstanding as of October 31, 2021 |  | 22,388 | ​ | $ | 78.21
Cancelled and forfeited |  | (2,157) | ​ | $ | 184.32
Outstanding as of October 31, 2022 |  | 20,231 | ​ | $ | 66.90
​ There were no options exercised in fiscal years 2022, 2021 or 2020. The following table summarizes information about stock options outstanding and exercisable as of October 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Options Outstanding |  | Options Exercisable
​ | ​ | ​ | ​ | Weighted | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | Weighted | ​ | ​ | ​ | Weighted
​ |  | ​ |  | Remaining |  | Average | ​ | ​ | ​ | Average
Range of |  | Number |  | Contractual |  | Exercise |  | Number |  | Exercise
Exercise Prices |  | outstanding |  | Life |  | Price |  | exercisable |  | Price
$18.00 - $77.28 |  | 15,217 |  | 4.6 | ​ | $ | 26.89 |  | 15,217 | ​ | $ | 26.89
$77.29 - $348.48 |  | 5,014 |  | 1.5 | ​ | $ | 188.31 |  | 5,014 | ​ | $ | 188.31
​ |  | 20,231 |  | 4.0 | ​ | $ | 66.90 |  | 20,231 | ​ | $ | ​
​ There was no intrinsic value for options outstanding and exercisable at October 31, 2022. Restricted Stock Units Including Performance Based Awards The following table summarizes our RSU and PSU activity for the year ended October 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Restricted Stock Units |  | ​ | Shares |  | Weighted-Average Fair Value
Outstanding as of October 31, 2021 | ​ | ​ | 2,543,541 | ​ | $ | 5.08
Granted - PSUs | ​ | ​ | 188,592 | ​ | ​ | 10.98
Granted - time-vesting RSUs | ​ | ​ | 833,512 | ​ | ​ | 7.66
Vested | ​ | ​ | (934,668) | ​ | ​ | 1.97
Forfeited | ​ | ​ | (110,096) | ​ | ​ | 8.55
Outstanding as of October 31, 2022 | ​ | ​ | 2,520,881 | ​ | $ | 7.93
​ On December 10, 2021, 338,048 RSUs were awarded to senior management under the FY 2022 LTI Plan, which included 169,026 PSUs and 169,022 time-based vesting RSUs. The PSUs were valued based on a Monte-Carlo Simulation, and the estimated fair value of the 169,026 relative TSR PSUs was $11.70 per share. The PSUs and time-based vesting RSUs are expensed over the three-year performance period. During fiscal year 2022, an additional 19,566 PSUs and 65,219 time-based vesting RSUs were issued to new hires that joined during the fiscal year. In addition to senior management, the Board of Directors also approved time-based RSU awards totaling 599,271 RSUs to certain salaried employees during fiscal year 2022 to promote ownership of the Company’s equity and retention. The time-based vesting RSUs granted during the fiscal year ended October 31, 2022 will vest at a rate of one-third of the total number of RSUs on each of the first three anniversaries of the date of grant. Outstanding RSUs as of October 31, 2021 included 1,000,000 RSUs granted as the Sign-On Award to Jason Few, the Company’s President and Chief Executive Officer (the “CEO”), pursuant to the August 26, 2019 employment agreement between the Company and the CEO. Pursuant to the terms of such Sign-On Award, 500,000 RSUs vested on August 26, 2022. The remaining 500,000 RSUs (“Additional RSUs”) would vest if, during the 30 days prior to the vesting date of August 26, 2022, the weighted average price of the Company’s common stock exceeded $1.00. The number of Additional RSUs issued would range from zero for a weighted average price of $1.00 to a maximum of 500,000 RSUs for a weighted average price of $6.00, with linear interpolation for stock prices between $1.00 and $6.00. The weighted average price of the Company’s common stock was between $4.00 and $5.00 on August 26, 2022 and as a result, 278,788 Additional RSUs vested. PSUs are issued assuming participants achieve 100% target performance. The Company also reserves additional shares assuming the maximum performance targets are met. As of October 31, 2022, the Company had reserved an additional 293,408 shares for potential issuance under the FY 2020 LTI Plan, an additional 429,304 shares for potential issuance under the FY 2021 LTI Plan and an additional 188,592 shares for potential issuance under the FY 2022 LTI Plan. RSU and PSU expense is based on the fair value of the award at the date of grant and is amortized over the vesting period, which is generally over 3 or 4 years. As of October 31, 2022, total unrecognized compensation cost related to RSUs and PSUs was $10.8 million, which is expected to be recognized over approximately the next two years on a weighted-average basis. Stock Awards During the years ended October 31, 2022, 2021 and 2020, we awarded 76,848, 31,889 and 58,303 shares, respectively, of fully vested, unrestricted common stock to the independent members of our Board of Directors as a component of Board of Director compensation which resulted in recognizing $0.2 million, $0.3 million and $0.1 million of expense for the years ended October 31, 2022, 2021 and 2020, respectively. Employee Stock Purchase Plan The 2018 Employee Stock Purchase Plan (the “ESPP”) was approved by the Company’s stockholders at the 2018 Annual Meeting of Stockholders. The adoption of the ESPP allows the Company to provide eligible employees of FuelCell Energy, Inc. and certain of its designated subsidiaries with the opportunity to voluntarily participate in the ESPP, enabling such participants to purchase shares of the Company’s common stock at a discount to market price at the time of such purchase. The maximum number of the Company’s shares of common stock that may be issued under the ESPP is 30,248 shares. Under the ESPP, eligible employees have the right to purchase shares of common stock at the lesser of (i) 85% of the last reported sale price of our common stock on the first business day of the offering period, or (ii) 85% of the last reported sale price of the common stock on the last business day of the offering period, in either case rounded up to avoid impermissible trading fractions. Shares issued pursuant to the ESPP contain a legend restricting the transfer or sale of such common stock for a period of 0.5 year after the date of purchase. The ESPP activity for the years ended October 31, 2022, 2021 and 2020 was de minimis. Employee Tax-Deferred Savings Plans We offer a 401(k) plan (the “401(k) Plan”) to all full time employees that provides for tax-deferred salary deductions for eligible employees (beginning the first month following an employee’s hire date). Employees may choose to make voluntary contributions of their annual compensation to the 401(k) Plan, limited to an annual maximum amount as set periodically by the IRS. Employee contributions are fully vested when made. Under the 401(k) Plan, there is no option available to the employee to receive or purchase our common stock. Matching contributions of 2% under the 401(k) Plan aggregated $0.5 million, $0.4 million, and $0.3 million for the years ended October 31, 2022, 2021, and 2020, respectively.

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