9. 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 (the “Plan”). 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 are vested immediately and which RSUs 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

During the three months ended March 31, 2024, 447 thousand stock options vested. There was no other activity related to stock options during the three months ended March 31, 2024.

As of March 31, 2024, total unrecognized compensation cost related to unvested stock options was approximately $1.3 million, which is expected to be recognized over a weighted average period of approximately 1.6 years.

Restricted Stock Units

During the three months ended March 31, 2024, 48,406 RSUs were issued to non-employee directors. These awards are included in the table above under both Granted and Released units. In addition to the Nonvested RSUs shown in the table above, there were 301,956 and 303,850 RSUs issued to non-employee directors outstanding as of March 31, 2024 and December 31, 2023, respectively.

The fair value of RSUs released during the three months ended March 31, 2024 was approximately $11.0 million.

During the three months ended March 31, 2024, the Company granted 1,505,244 performance-based RSUs (“PSUs”), which, subject to achieving certain performance criteria, could result in the issuance of up to 2,257,866 shares of common stock (i.e., 150% of the number of PSUs granted). 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 which 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 that the Compensation Committee of the Board determines the performance criteria has been met and certifies the extent to which they 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 approved the performance criteria

for the performance period ended December 31, 2023 such that the percentage of PSUs that vested with respect to the target amount for the 2021 PSU grants was 100%.

As of March 31, 2024, total unrecognized compensation cost related to RSUs and PSUs was approximately $27.4 million, which is expected to be recognized over a weighted average period of approximately 2.3 years.

Share-Based Compensation Cost