NOTE 7 — SHARE-BASED COMPENSATION

2026 Grants

In May 2026, the Company granted share-based compensation to its employees. The grants consisted of 2.8 million restricted stock units (“RSUs”) and 2.6 million performance stock units (“PSUs”).

The RSUs were valued as of the grant date and vest 1/3 each year on May 29, 2027, 2028 and 2029. The grant date fair value of the RSUs was $10.2 million.

The PSUs are subject to performance criteria of (i) total shareholder return and relative shareholder return (collectively, the “TSR PSUs”), (ii) cash return on capital employed (the “CROCE PSUs”) and (iii) reserve performance (the “Reserve PSUs”). The performance period for the measurement of the performance goals began on January 1, 2026 and ends on December 31, 2028. To be eligible to receive the earned PSUs, employees must be employed from the grant date through December 31, 2028. Different levels of achievement across these 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 TSR PSUs will account for 50% of the target PSUs granted to employees. The TSR PSUs contain both a service condition and a market condition. The grant date fair value of the TSR PSUs was $8.5 million and was calculated using a Monte Carlo simulation.

The CROCE PSUs and Reserve PSUs will account for 40% and 10%, respectively, of the target PSUs granted to employees. The CROCE PSUs and Reserve PSUs contain both a service condition and a performance condition. The grant date fair value of the CROCE PSUs and Reserve PSUs, which was determined using the closing price of the Company’s common stock on the date of grant, was $3.8 million and $1.0 million, respectively. The cumulative compensation cost that will be recognized will be equal to the fair value of the awards deemed probable of vesting multiplied by the percentage of the requisite service period that has been rendered. Unlike the TSR PSUs, if the performance condition is not satisfied, any previously recognized compensation expense is reversed.

As of the grant date, the Company did not have enough shares of common stock available under its long-term incentive plan to satisfy its commitments to deliver shares upon vesting. Accordingly, the Company will account for these awards as liability awards, and the fair value of these awards will be 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 the PSUs with both a service condition and a market condition).

Modification of awards

In June 2026, the Company’s long-term incentive plan was amended to increase the shares available for issuance from 10.0 million to 22.0 million. As a result of this increase, the Company reclassified the RSUs and PSUs that were granted in 2025 from liability awards to equity awards. The modification resulted in the remeasurement of the TSR PSUs at $7.44 per share and the remaining PSUs and RSUs at $4.01 per share on the modification date. The liability balance as of the modification date of $11.0 million was reclassified to additional paid in capital.