NOTE 7 — SHARE-BASED COMPENSATION

The Company’s Plan for its eligible employees, non-employee directors and consultants includes both cash and share-based compensation awards. The Plan is administered by the Compensation Committee of the board of directors. The Plan allows for the issuance of stock options, stock appreciation rights, restricted stock, RSUs, bonus stock, dividend equivalents, or other awards related to stock, and awards may be paid in cash, stock, or any combination of cash and stock, as determined by the Compensation Committee. Each stock-settled award granted under the Plan reduces the number of shares available for issuance by one share. Cash-settled awards are not counted against the aggregate share limit. Shares subject to awards granted under the Plan that are subsequently canceled, terminated, settled in cash or forfeited, excluding shares withheld to satisfy tax withholding obligations with respect to options or stock appreciation rights or to pay the exercise price of an option, are available for future grant under the Plan. The Company’s policy is to issue new shares when its equity awards vest.

As of December 31, 2025, the maximum number of shares of common stock available for issuance under the Plan is 10.0 million shares. As the Company does not have enough shares available under the Plan to satisfy its commitments to deliver shares upon vesting, the Company utilized its sequencing policy to determine how to allocate shares among outstanding awards.

Equity Awards

Restricted Stock Units

An RSU is an award where each unit represents the right to receive the value of one share of our common stock at the date of vesting. RSUs are subject to service conditions, and vest ratably over approximately three years or one year for RSUs granted to employees and non-employee directors, respectively.

A summary of activity related to RSUs is as follows:

​

​

​

​

​

​

​

The grant date fair value of RSUs granted during 2025, 2024 and 2023 was $6.5 million, $5.4 million and $7.4 million, respectively. The fair value of the RSUs that vested during 2025, 2024 and 2023 was $5.9 million, $4.9 million and $2.5 million, respectively, based on the closing price of the Company’s common stock on the vesting date.

As of December 31, 2025, there was $3.9 million of total unrecognized compensation costs related to unvested RSUs which is expected to be recognized over a weighted average period of 0.9 years.

Performance Share Units

A performance share unit (“PSU”) is an RSU award granted subject to performance criteria. Grants of PSUs are three-year equity settled awards linked to the achievement of certain performance metrics. The vesting of PSUs is dependent on the satisfaction of certain service-related conditions and the achievement of the applicable performance metrics. The PSUs vest in their entirety on the date specified in the award agreement following the conclusion of the performance period. Different levels of achievement across these performance metrics will affect the percentage of PSUs that the employee receives upon the satisfaction of the service requirement. The percentage of PSUs received upon vesting ranges from 0% to 200%.

The grant date fair value of the PSUs that contain both a service condition and a market condition was determined through the use of the Monte Carlo simulation method. This method requires the use of subjective assumptions such as the price and the expected volatility of the Company’s stock and its self-determined Peer Group companies’ stock, risk-free rate of return and cross-correlations between the Company and its Peer Group companies. Expected volatilities for the Company’s and each peer company utilized in the model are estimated using a historical period consistent with the awards’ remaining performance period as of the grant date. The risk-free interest rate is based on the yield on U.S. Treasury Constant Maturity for a term consistent with the remaining performance period. The valuation model assumes dividends, if any, are immediately reinvested.

The following table summarizes the assumptions used to calculate the grant date fair value of the PSUs valued using the Monte Carlo simulation method:

​

​

​

​

The grant date fair value of the PSUs that contain both a service condition and a performance condition was determined using the closing stock price of the Company’s common stock on the date of grant. The cumulative compensation cost that will be recognized will be equal to the grant date fair value of the awards deemed probable of vesting multiplied by the percentage of the requisite service period that has been rendered. Unlike PSUs with both a service condition and a market condition, if the performance condition is not satisfied, any previously recognized compensation expense is reversed.

A summary of activity related to PSUs is as follows:

​

​

​

​

​

​

​

The grant date fair value of PSUs granted during 2024 and 2023 was $3.5 million and $6.3 million, respectively. The Company did not grant any PSUs in 2025 that were accounted for as equity awards. No PSUs vested during 2025 or 2024. The fair value of the PSUs that vested during 2023 was $0.7 million based on the closing price of the Company’s common stock on the vesting date.

As of December 31, 2025, there was $1.2 million of total unrecognized compensation costs related to unvested PSUs which is expected to be recognized over a weighted average period of one year.

Liability Awards

Certain of the Company’s RSUs and all PSUs granted in 2025 may be settled by, at the Company’s discretion, either the issuance of the Company’s common stock, cash, or a combination thereof based on the fair market value of the common stock at the vesting date. These awards are accounted for as liability awards, and the fair value of these awards is remeasured at the end of each reporting period based on either the current market price of the Company’s common stock (for RSUs and PSUs with both a service condition and a performance condition) or through the use of the Monte Carlo simulation method (for PSUs with both a service condition and a market condition).

The assumptions used in the Monte Carlo simulation method are the same as those described above for PSUs accounted for as equity awards. The following table summarizes the assumptions used to calculate the fair value of the PSUs valued using the Monte Carlo simulation method at the date of grant and at December 31, 2025:

​

​

During 2025, the Company granted 7.6 million liability awards with a grant date fair value of $12.2 million. As of December 31, 2025, there were 7.5 million liability awards outstanding with a fair value of $13.8 million.

As of December 31, 2025, there was $6.1 million of total unrecognized compensation costs related to the liability awards which is expected to be recognized over a weighted average period of 2.1 years.

​

​

Share-Based Compensation Expense

Compensation cost for share-based payments to employees is recognized using an accelerated attribution method over the period during which the recipient is required to provide service in exchange for the award. For equity awards, compensation cost is based on the fair value of the equity instrument on the date of grant. For liability awards, compensation cost is based on the fair value of the liability awards at the end of the reporting period. Forfeitures are estimated during the vesting period, resulting in the recognition of compensation cost only for those awards that are expected to actually vest. Estimated forfeitures are adjusted to actual forfeitures when the award vests. All RSUs and PSUs awarded are subject to forfeiture until vested and cannot be sold, transferred or otherwise disposed of during the restricted period.

The following table presents the compensation expenses included in General and administrative expenses in the Consolidated Statements of Operations (in thousands):

​