STOCK-BASED COMPENSATION EXPENSE |
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| STOCK-BASED COMPENSATION EXPENSE | STOCK-BASED COMPENSATION EXPENSE 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 Rocket Lab 2013 Stock Option and Grant Plan (the “2013 Plan”) was terminated, but outstanding awards granted thereunder remain governed by it. The 2021 Plan authorizes the Company’s Compensation Committee to grant equity awards to officers, employees, directors, and other key personnel, as well as service providers. The available awards include incentive stock options, non‑qualified stock options, restricted stock awards, unrestricted stock awards, and restricted stock units, any of which may be performance‑based. 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 and has registered with the SEC 100,995,637 shares of common stock as equity awards to participants under the 2021 Plan as of June 30, 2026. There were 91,439,071 shares of common stock available for grant as of June 30, 2026. Total stock-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025 consisted of the following:
Options Options issued to all optionees under the 2013 Plan vested 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 outstanding options had vested as of June 2023. Restricted Stock Units For the six months ended June 30, 2026 and 2025, the Company granted 1,563,748 and 1,104,778 restricted stock units, respectively, to certain key employees and directors 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. On March 30, 2026, following approval by the Compensation Committee of the Board of Directors of the Company, Rocket Lab Limited, a New Zealand limited company and wholly-owned subsidiary of the Company, entered into an amendment to the amended and restated employment agreement, dated December 3, 2024, with Sir Peter Beck, the Company’s Chairman and Chief Executive Officer. In addition, on March 30, 2026, Mr. Beck and the Company entered into a restricted stock unit (“RSU”) cancellation agreement pursuant to which Mr. Beck voluntarily forfeited and cancelled all unvested RSUs held by Mr. Beck, representing an aggregate of 392,155 shares of the Company’s common stock. Mr. Beck’s focus is the long-term appreciation of shareholder value rather than short-term cash or equity incentives. At Mr. Beck’s request, the capital previously allocated for this compensation will be redirected toward Company priorities and strategic R&D initiatives, reinforcing a shared commitment to disciplined fiscal management and growth. For the six months ended June 30, 2026, the cancellations resulted in a one-time stock-based compensation expense of $11,180 recorded in selling, general and administrative. No portion of the cancelled RSUs will vest or become outstanding shares, and as a result, there will be no dilution to shareholders. The Company will not incur any additional stock-based compensation expense related to these cancelled RSUs in future periods. As of June 30, 2026, the total unrecognized compensation expense related to unvested performance-based restricted stock units granted under the 2021 Plan was $191,188 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. For the six months ended June 30, 2026 and 2025, 265,164 shares and 321,734 shares of common stock were issued under the 2021 ESPP, respectively. As of June 30, 2026, 19,315,464 shares of common stock authorized and registered with the SEC remain available for issuance under the 2021 ESPP. Total ESPP stock-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 was $2,395 and $4,653, respectively. Total ESPP stock-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025 was $1,519 and $3,093, respectively. As of June 30, 2026, the total unrecognized compensation expense related to the 2021 ESPP was $4,545 and will be recognized over the remaining offering period.
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