18. Share-Based Compensation

The Compensation Committee of the Board has approved the grant of non-qualified stock options, restricted stock units (“RSUs”), and shares of common stock to certain employees, non-employees and members of the Board under the ARKO Corp. 2020 Incentive Compensation Plan (as amended, the “Plan”). At the Company’s 2024 annual meeting of stockholders held on June 6, 2024, the Company’s stockholders approved an increase in the total number of shares of common stock authorized for issuance under the Plan from 12.4 million shares to 23.8 million shares. As of December 31, 2024, 12.6 million shares of common stock were available for future grants. Stock options granted under the Plan expire no later than ten years from the date of grant and the exercise price may not be less than the fair market value of the underlying shares on the date of grant. Vesting periods are assigned to stock options and RSUs on a grant-by-grant basis at the discretion of the Board. The Company issues new shares of common stock upon exercise of stock options and vesting of RSUs.

Additionally, a non-employee director may receive RSUs in lieu of up to 100% of his or her cash fees, which vest immediately and will be settled in common stock upon the director’s departure from the Board or an earlier change in control of the Company.

Stock Options

The aggregate intrinsic value is the difference between the exercise price and the closing price of the Company’s common stock on December 31.

In the years ended December 31, 2024 and 2023, 447 thousand and 394 thousand stock options vested, respectively.

As of December 31, 2024, total unrecognized compensation cost related to unvested stock options was approximately $0.6 million, which is expected to be recognized over a weighted average period of approximately 1.0 years.

The fair value of each stock option award is estimated by management on the date of the grant using the Black-Scholes option pricing model. The following table summarizes the assumptions utilized in the valuation of the stock option award granted for the period noted.

The expected stock price volatility is based on the historical volatility of the Company’s stock price plus the Company’s peer group’s stock price for the period prior to the Company’s listing on Nasdaq. The volatilities are estimated for a period of time equal to the expected term of the related option. The risk-free interest rate is based on the implied yield of U.S. Treasury zero-coupon issues with an equivalent remaining term. The expected term of the options represents the estimated period of time until exercise and is determined by considering the contractual terms, vesting schedule and expectations of future employee behavior.

Restricted Stock Units and Performance-based Restricted Stock Units

In the years ended December 31, 2024 and 2023, 218,602 and 141,764 RSUs were issued to non-employee directors. These awards are included in the table above under restricted stock units as both granted and released units. There were 472,152 and 303,850 RSUs issued to non-employee directors outstanding as of December 31, 2024 and 2023, respectively.

The fair value of RSUs and PSUs released during the years ended December 31, 2024, 2023 and 2022 was $12.2 million, $5.5 million and $3.5 million, respectively.

In the years ended December 31, 2024, 2023 and 2022, the Company granted approximately 2,021 thousand, 1,151 thousand and 1,120 thousand PSUs, respectively, which, subject to achieving certain performance criteria, could result in the issuance of shares of common stock up to 150% of the number of PSUs granted, net of PSUs forfeited. The PSUs were awarded to certain members of senior management and cliff vest at the end of a three-year period, subject to the achievement of specific performance criteria measured over such period. The number of PSUs that will ultimately vest is contingent upon the recipient continuing to be in the continuous service of the Company and related entities through the last day of the performance period and a certification by the Compensation Committee of the Board that the applicable performance criteria have been met.

The Company assesses the probability of achieving the performance criteria on a quarterly basis. In the first quarter of 2024, the Compensation Committee of the Board determined that the performance criteria for the performance period ended December 31, 2023 had been met and certified that the percentage of PSUs that vested with respect to the target amount for the 2021 PSU grants was

100%. During the years ended December 31, 2024 and 2023 , the number of PSUs was adjusted for the probability of achieving the performance criteria, resulting in the recording of a reduction of expense of approximately $2.8 million in both 2024 and 2023 based on the grant date fair value. No adjustment was made in 2022. For PSUs with market conditions, the Company recognizes the fair value expense ratably over the performance and vesting period.

As of December 31, 2024, total unrecognized compensation cost related to RSUs and PSUs was approximately $15.0 million, which is expected to be recognized over a weighted average period of approximately 1.8 years.

Share-Based Compensation Cost

Total share-based compensation cost recorded for employees, non-employees and members of the Board for the years ended December 31, 2024, 2023 and 2022 was $12.3 million, $15.0 million and $12.2 million, respectively, and included in general and administrative expenses on the consolidated statements of operations.