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Benefit Plans | 12 Months Ended
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Oct. 31, 2024
Benefit Plans |
Benefit Plans | Note 16. 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. Fourth Amended and Restated 2018 Omnibus Incentive Plan At the Company’s 2024 Annual Meeting of Stockholders held on April 4, 2024 (the “2024 Annual Meeting”), the Company’s stockholders approved the amendment and restatement of the FuelCell Energy, Inc. Third Amended and Restated 2018 Omnibus Incentive Plan (as so amended and restated, the “Fourth Amended and Restated Incentive Plan”), which had previously been approved by the Company’s Board of Directors (the “Board”), subject to stockholder approval. The purpose of the amendment and restatement of the Third Amended and Restated 2018 Omnibus Incentive Plan was to authorize the Company to issue up to 833,333 additional shares of the Company’s common stock pursuant to awards under the Fourth Amended and Restated Incentive Plan. Following the approval of the amendment and restatement (and therefore the Fourth Amended and Restated Incentive Plan) by the Company’s stockholders at the 2024 Annual Meeting, the Fourth Amended and Restated Incentive Plan provides the Company with the authority to issue a total of 1,444,444 shares of the Company’s common stock. The Fourth Amended and Restated Incentive Plan authorizes grants of stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), shares, performance shares, performance units, incentive awards and dividend equivalent units to officers, other employees, directors, consultants and advisors. Up to 61,111 shares of the Company’s common stock may be issued pursuant to the exercise of incentive stock options. Stock options, RSAs, RSUs and SARs have restrictions as to transferability. Stock option exercise prices are fixed by the Board 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. The Board or the administrator of the Fourth Amended and Restated Incentive Plan may terminate the Fourth Amended and Restated Incentive Plan at any time. No award may be granted under the Fourth Amended and Restated Plan after the tenth anniversary of the approval of the Fourth Amended and Restated Plan by stockholders at the 2024 Annual Meeting. Of the 1,444,444 shares of the Company’s common stock authorized to be issued under the Fourth Amended and Restated Incentive Plan as of October 31, 2024, 754,518 remained available for grant as of October 31, 2024. Of the shares remaining available for grant, the Company had reserved, for potential future grant, up to 146,397 performance stock units if maximum performance is achieved. Amended and Restated 2018 Employee Stock Purchase Plan At the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”), the Company’s stockholders approved the amendment and restatement of the FuelCell Energy, Inc. 2018 Employee Stock Purchase Plan (as so amended and restated, the “Amended and Restated ESPP”), which had previously been approved by the Board, subject to stockholder approval. The purpose of the amendment and restatement of the 2018 Employee Stock Purchase Plan was to authorize the Company to issue up to 16,666 additional shares of the Company’s common stock under the Amended and Restated ESPP. Following the approval of the amendment and restatement (and therefore the Amended and Restated ESPP) by the Company’s stockholders at the 2023 Annual Meeting, the Amended and Restated ESPP provided the Company with the authority to issue a total of 18,055 shares of the Company’s common stock. The Amended and Restated ESPP also increased the limit on the number of shares of the Company’s common stock that any individual participant may purchase during an offering period to 33 shares. The Amended and Restated ESPP, which is intended to satisfy the requirements of Section 423 of the Internal Revenue Code of 1986, as amended, allows the Company to provide eligible employees of the Company and of certain designated subsidiaries with the opportunity to voluntarily participate in the Amended and Restated 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 Board may, in its sole discretion, terminate the Amended and Restated ESPP at any time. If the Board does not earlier terminate the Amended and Restated ESPP, the Amended and Restated ESPP will terminate on the date on which all shares of common stock available for issuance have been sold pursuant to purchase rights exercised under the Amended and Restated ESPP. Under the Amended and Restated 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, 2024, 2023 and 2022 was de minimis. Long-Term Incentive Plans The Company’s Board 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 2024 Long-Term Incentive Plan Awards: On December 11, 2023, the Compensation Committee of the Board (now known as the Compensation and Leadership Development Committee) (the “Compensation Committee”) approved the specific components of, and the payout calibration for, certain awards to be made under the Company’s Long Term Incentive Plan (which is a sub-plan consisting of awards made under the Company’s 2018 Omnibus Incentive Plan, as amended and restated (the “2018 Incentive Plan”)) for fiscal year 2024. The participants in the Plan for fiscal year 2024 are members of senior management. The Plan consists of two award components for fiscal year 2024:
| 1) | Relative Total Shareholder Return (“TSR”) Performance Share Units (“PSU”). The PSUs granted during the year ended October 31, 2024 will be earned over the performance period ending on October 31, 2026, 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, 2023 through October 31, 2026. The Compensation Committee of the Board 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, 2023) 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, 2026), 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 11, 2026 (the third anniversary of the grant date).
| 2) | Time-vesting RSUs. The time-vesting RSUs granted during the year ended October 31, 2024 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.
Fiscal Year 2023 Long-Term Incentive Plan: On December 5, 2022, the Board approved a Long-Term Incentive Plan for fiscal year 2023 (the “FY 2023 LTI Plan”) as a sub-plan consisting of awards made under the 2018 Incentive Plan. The participants in the FY 2023 LTI Plan are members of senior management. The FY 2023 LTI Plan consists of two award components:
| 1) | Relative Total Shareholder Return (“TSR”) Performance Share Units (“PSU”). The PSUs granted during the year ended October 31, 2023 will be earned over the performance period ending on October 31, 2025, 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, 2022 through October 31, 2025. The Compensation Committee of the Board 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 60 consecutive trading days ending on October 31, 2022) from the ending stock price (defined as the average closing price of the Company’s common stock over the 60 consecutive trading days ending on October 31, 2025), 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 5, 2025 (the third anniversary of the grant date).
| 2) | Time-vesting RSUs. The time-vesting RSUs granted during the year ended October 31, 2023 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.
Fiscal Year 2022 Long Term Incentive Plan: On December 10, 2021, the Board 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 were earned over the performance period ended on October 31, 2024, but remained 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 was 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 was capped at 200% of the target number of PSUs, and the award was further capped at 100% of the target number of PSUs if the Company’s absolute TSR over the performance period was negative. The Company’s TSR was 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. On November 17, 2024, based on the calculations described above, the Compensation Committee certified awards at 52.665% of the target amount, subject to 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 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 2010 Equity Incentive Plan remains in effect only to the extent of awards outstanding under the plan as of October 31, 2024. Share-Based Compensation Share-based compensation was reflected in the Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended October 31, | ​
​ |  | 2024 |  | 2023 | ​ | 2022 | ​
Cost of revenues | ​ | $ | 1,460 | ​ | $ | 1,502 | ​ | $ | 706 | ​
Administrative and selling expense | ​ | ​ | 8,583 | ​ | ​ | 8,657 | ​ | ​ | 5,418 | ​
Research and development expense | ​ | ​ | 1,428 | ​ | ​ | 1,429 | ​ | ​ | 456 | ​
​ | ​ | $ | 11,471 | ​ | $ | 11,588 | ​ | $ | 6,580 | ​
​ Restricted Stock Units Including Performance Based Awards The following table summarizes our RSU and PSU activity for the year ended October 31, 2024: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Restricted Stock Units |  | ​ | Shares |  | Weighted-Average Fair Value
Outstanding as of October 31, 2023 | ​ | ​ | 217,947 | ​ | $ | 151.89
Granted - time-vesting RSUs | ​ | ​ | 313,883 | ​ | ​ | 38.13
Granted - PSUs | ​ | ​ | 109,146 | ​ | ​ | 48.90
Vested | ​ | ​ | (76,420) | ​ | ​ | 210.12
Forfeited | ​ | ​ | (47,995) | ​ | ​ | 67.96
Outstanding as of October 31, 2024 | ​ | ​ | 516,561 | ​ | $ | 64.53
​ On December 11, 2023, 218,292 RSUs were awarded to senior management under the FY 2023 LTI Plan, which included 109,146 PSUs and 109,146 time-based vesting RSUs. The 109,146 PSUs granted during the three months ended January 31, 2024 were contingent upon approval by the Company’s stockholders of additional authorized shares under the 2018 Incentive Plan, which approval was obtained at the 2024 Annual Meeting. The PSUs and time-based vesting RSUs are expensed over the three-year service period. In addition to the awards granted to senior management, during the year ended October 31, 2024, the Board also granted a total of 204,737 time-based vesting RSU awards to certain salaried employees to promote ownership of the Company’s equity and retention. The time-based vesting RSUs granted during the year ended October 31, 2024 vest at a rate of one-third of the total number of RSUs granted on each of the first three anniversaries of the date of grant. 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, 2024, the Company had reserved an additional 5,849 shares for potential issuance under the FY 2022 LTI Plan, an additional 35,539 shares for potential issuance under the FY 2023 LTI Plan, and an additional 105,009 shares for potential issuance under the Long Term Incentive Plan for awards made in fiscal year 2024. 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, 2024, total unrecognized compensation cost related to RSUs and PSUs was $14.3 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, 2024, 2023 and 2022, we awarded 6,651, 3,454 and 2,562 shares, respectively, of fully vested, unrestricted common stock to the independent members of our Board as a component of Board compensation, which resulted in recognizing $0.2 million of expense for each of the years ended October 31, 2024, 2023 and 2022. 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 U.S. Internal Revenue Service (“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 $1.3 million, $1.1 million, and $0.5 million for the years ended October 31, 2024, 2023, and 2022, respectively.

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