Note 10 – Stock-Based Compensation

A summary of the Company’s Share Incentive Plans are as follows:

2007 Share Incentive Plan

On December 12, 2007, shareholders approved the Company’s 2007 Share Incentive Plan (“2017 Incentive Plan”), in connection therewith, 750,000 shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2017 Incentive Plan through December 12, 2017. The Plan expired in December 2017. As of December 31, 2025, there were 120,000 options outstanding under this plan.

2016 Share Incentive Plan

On December 9, 2016, shareholders approved the Company’s 2016 Share Incentive Plan (“2016 Incentive Plan”), in connection therewith, 750,000 shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2016 Incentive Plan through December 9, 2026. As of December 31, 2025, there were 420,375 options outstanding under this plan.

2022 Share Incentive Plan

On July 14, 2022, shareholders approved the Company’s 2022 Share Incentive Plan (“2022 Incentive Plan”), in connection therewith, 515,000 shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2022 Incentive Plan through July 14, 2032. As of December 31, 2025, there were 263,500 options outstanding under this plan.

Under the 2016 and 2022 Share Incentive Plans, the purchase price of the common stock under each option plan shall be determined by the Committee, provided, however, that such purchase price shall not be less than the fair market value of the shares on the date such option is granted. The stock options generally expire 7 seven to ten years after the date of grant.

As of December 31, 2025, there were 48,698 shares available for grant under the 2016 Equity Incentive Plan and 98,180 shares available for grant under the 2022 Equity Incentive Plan.

The Company recorded stock-based compensation of $0.9 million and $1.1 million for the years ended December 31, 2025 and 2024, respectively, that were included in the following line items in our Consolidated Statements of Operations (in thousands):

 Schedule of Stock Based Compensation

Stock-based compensation expense in both years included approximately $0.2 million related to restricted stock awards pursuant to the Director Compensation plan discussed below. The Company recognizes forfeitures of stock awards as they occur.

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

Note 10 – Stock-Based Compensation (continued)

For the year ended December 31, 2024, the Company granted 5,000 stock options, vesting 25% per year over four years, with a 10 ten-year life. The Company determined the fair value of stock options granted based upon weighted average assumptions as provided below.

 Schedule of Weighted Average Assumptions

The expected life is the number of years the Company estimates that the awards will be outstanding based on the simplified method that considers the vesting period and contractual period of the option. The expected volatility is measured using historical daily price changes of the Company’s common stock over the respective expected term. The Company has 803,875 outstanding stock options under the three plans at December 31, 2025.

The following table summarizes stock options awards for the years ended December 31, 2025 and 2024:

 Schedule of Stock Options Awards

At December 31, 2025 and 2024, stock options to purchase 645,375 and 485,000, respectively, shares of common stock were exercisable.

The following table summarizes information about the outstanding and exercisable options at December 31, 2025:

 Schedule of Outstanding and Exercisable Options Ranges of Exercise Prices

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

Note 10 – Stock-Based Compensation (continued)

As of December 31, 2025, there was $0.7 million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of 1.2 years.

Restricted Stock Awards

Pursuant to the Director Compensation plan approved on October 11, 2021, each of the five independent directors is entitled to compensation for an annual equity retainer in the amount of $40,000 per director, to be automatically granted on the date of the Company’s annual meeting of shareholders.

The following table summarizes restricted stock awards for the years ended December 31, 2025 and 2024:

 Schedule of Restricted Stock Awards

The fair value of the restricted stock awards is recorded as stock-based compensation expense over the 1 one-year vesting period and totaled $0.2 million for both years ending December 31, 2025 and 2024, respectively.