MGE ENERGY INC

ompensation - MGE Energy and MGE.

During the three and nine months ended September 30, 2024, MGE recorded $1.2 million and $3.1 million, respectively, in compensation expense related to share-based compensation awards compared to $0.1 million and $1.8 million for the comparable periods in 2023.

In the first quarter of 2024, cash payments of $2.5 million and 12,518 shares were distributed related to awards that were granted in 2021 under the 2021 Incentive Plan and cash-based awards granted in 2019 under the 2006 Performance Unit Plan.

In March 2024, MGE granted 16,414 performance units and 29,733 restricted stock units under the 2021 Incentive Plan to eligible employees and non-employee directors.

MGE recognizes share-based compensation expense on a straight-line basis over the requisite service period. Awards classified as equity awards are measured based on their grant-date fair value. Awards classified as liability awards are recorded at fair value each reporting period. The performance units can be paid out in either cash, shares of common stock, or a combination of cash and stock and are classified as a liability award. The restricted stock units will be paid out in shares of common stock, and therefore are classified as equity awards.

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