On April 11, 2014, INNOVATE’s Board of Directors adopted the INNOVATE Corp. Omnibus Equity Award Plan (the "2014 Plan"), which was originally approved at the annual meeting of stockholders held on June 12, 2014. On April 21, 2017, the Board of Directors, subject to stockholder approval, adopted the Amended and Restated 2014 Omnibus Equity Award Plan (the "Restated 2014 Plan"). The Restated 2014 Plan was approved by INNOVATE's stockholders at the annual meeting of stockholders held on June 14, 2017. Subject to adjustment as provided in the Restated 2014 Plan, the Restated 2014 Plan authorized the issuance of 3,500,000 shares of common stock of INNOVATE, plus any shares that again become available for awards under the 2014 Plan, plus any shares that again become available for awards under the Restated 2014 Plan.

On April 20, 2018, the Board of Directors, subject to stockholder approval, adopted the Second Amended and Restated 2014 Omnibus Equity Award Plan (the "Second A&R 2014 Plan"). The Second A&R 2014 Plan was approved by INNOVATE's stockholders at the annual meeting of stockholders held on June 13, 2018. Subject to adjustment as provided in the Second A&R 2014 Plan, the Second A&R 2014 Plan authorized the issuance of up to 3,500,000 shares of common stock of INNOVATE, plus any shares that again become available for awards under the 2014 Plan or the Restated 2014 Plan.

The Second A&R 2014 Plan provides that no further awards will be granted pursuant to the 2014 Plan or the Restated 2014 Plan. However, awards previously granted under either the 2014 Plan or the Amended 2014 Plan will continue to be subject to and governed by the terms of the 2014 Plan and Amended 2014 Plan, respectively. The Compensation Committee of INNOVATE's Board of Directors administers the 2014 Plan, the Amended 2014 Plan and the Second A&R 2014 Plan and has broad authority to administer, construe and interpret the plans. The Second A&R 2014 Plan provides for the grant of awards of non-qualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stock based awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. The Company typically issues new shares of common stock upon the exercise of stock options, as opposed to using treasury shares.

On September 30, 2024, the Board of Directors adopted, subject to stockholder approval, an amendment to the Second A&R 2014 Plan to increase the number of shares of the Company's common stock, par value $0.001 per share, available for issuance thereunder to 1,300,000 (the “Plan Amendment”). Prior to the adoption by the Board of Directors, there were a total of 101,943 shares of common stock available for future award under the "Second A&R 2014 Plan. The Plan Amendment was approved by holders of a majority in voting power on October 4, 2024, by written consent in lieu of a special meeting, and was effective as of October 29, 2024. As of December 31, 2025, 97,895 shares for awards remain available for issuance under the Second A&R 2014 Plan, as amended.

Total share-based compensation expense recognized by the Company and its subsidiaries under all equity compensation arrangements was $2.7 million and $3.4 million for the years ended December 31, 2025 and 2024, respectively, which is included within Selling, general and administrative expenses in the Consolidated Statements of Operations.

All grants are time based and vest either immediately or over a period established at grant, typically with a requisite service period of one to three years for a member of the Board of Directors or an employee to vest in the share-based award, subject to discretion by Compensation Committee. There are no other substantive conditions for vesting. The Company recognizes compensation expense for equity awards, reduced by actual forfeitures as they are incurred, using the straight-line basis.

A summary of INNOVATE’s restricted stock and restricted stock unit activity is as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value




Unvested - December 31, 2024	294,663	$	8.12
Granted	278,389	$	5.90
Vested	(246,355)	$	8.05
Forfeited	(12,521)	$	7.99
Unvested - December 31, 2025	314,176	$	6.22

The aggregate vesting date fair value of the restricted stock and restricted stock units which vested during the years ended December 31, 2025 and 2024, was $1.3 million and $0.9 million, respectively. As of December 31, 2025, the total unrecognized share-based compensation expense related to unvested restricted stock and restricted stock units was $1.1 million and is expected to be recognized over the remaining weighted-average period of 0.9 years.

A summary of INNOVATE’s stock option activity is as follows:


	Number of Stock Options	Weighted-Average Exercise Price





Outstanding - December 31, 2024	217,733	$	16.94






Granted	100,000	$	5.67
Outstanding - December 31, 2025	317,733	$	13.39

Exercisable - December 31, 2024	117,733	$	27.74
Exercisable - December 31, 2025	217,733	$	16.94

As of December 31, 2025, the intrinsic value and weighted-average remaining life of the Company's outstanding and exercisable stock options were $30 thousand and approximately 8.4 years, respectively. The maximum contractual term of the Company's exercisable stock options is approximately ten years. As of December 31, 2025, there were 100,000 unvested stock options and $0.2 million of unrecognized share-based compensation expense related to unvested stock options and is expected to be recognized over the remaining period of 0.8 years.

On October 29, 2024, when the Plan Amendment became effective, the following awards, which were previously awarded to the Company's Interim Chief Executive Officer ("Interim CEO") and subject to stockholder approval of the Plan Amendment, became effective: (i) 95,322 of restricted stock unit awards ("RSUs"), which were awarded on October 11, 2023; (ii) 100,000 stock option awards with a strike price of $25.00 (as retroactively adjusted for the Reverse Stock Split in 2024) and an expiration date of September 15, 2033, which were awarded on September 15, 2023; (iii) 142,857 of RSUs, which were awarded on August 19, 2024; and (iv) 100,000 stock option awards with a strike price of $4.22 and an expiration date of September 15, 2034, which were awarded on September 15, 2024.

On August 6, 2025, the Interim CEO was awarded 176,056 restricted stock awards ("RSAs") that vest on August 6, 2026. On September 15, 2025, the Interim CEO was awarded 100,000 stock option awards with a strike price of $5.67 and expiration date of September 15, 2035.


	Year Ended December 31,
	2025			2024
Stock price at date of grant	$	4.75		$	6.27
Expected term	5.5 years			5.1 years -5.6 years
Risk-free interest rate	3.7		%	4.1		%
Expected volatility	88.4		%	80.9% -82.7%
Expected dividend yield	—		%	—		%
Grant date fair value per option	$	3.34		$2.67 -$4.75

The expected option term of the Company's "plain vanilla" stock options granted reflect the application of the simplified method, as prescribed by Staff Accounting Bulletin Topic 14. The simplified method was used as the Company does not believe it has sufficient historical exercise data to provide a reasonable basis for the expected term of its stock option grants. The simplified method will be used until such time as the Company has stock option exercise experience in which to reasonably determine the expected life. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Volatility and expected dividend yield are calculated using INNOVATE's historical volatility and dividend history.