NOTE 15 – STOCK-BASED COMPENSATION

Under the Company’s Stock Incentive Plan, as amended and restated as of June 22, 2023 (the “Plan”), the Compensation and Human Capital Committee of the Board of Directors, which consists of three of the Company’s non-employee directors, has the authority to grant participants incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights and stock awards, for up to 12,000,000 shares of common stock.

Stock Options:

Stock options granted to participants under the Plan generally become exercisable after three years and remain exercisable until the tenth anniversary of the date of grant. All stock options granted under the Plan have an exercise price equal to or greater than the fair market value of the Company’s common stock on the grant date. There were no stock options granted during the three months ended April 30, 2026 and April 30, 2025.

The fair value of the stock options, less expected forfeitures, is amortized on a straight-line basis over the vesting term. Total compensation expense for stock option grants recognized during the three months ended April 30, 2026 and 2025 was $0 and $0.1 million, respectively. As of April 30, 2026, there was no unrecognized compensation cost related to unvested stock options. The fair value of stock options exercised during the first three months of fiscal 2027 was $0.9 million. Total cash consideration received for stock option exercises during the three months ended April 30, 2026, was $1.1 million. There were 18,520 shares of common stock of the Company tendered by the employee for the payment of the employee's withholding tax obligation totaling $0.5 million for the three months ended April 30, 2026. In addition, during the three months ended April 30, 2026, $1.7 million of shares were tendered to the Company by the holder of the stock options for the payment of the exercise price of these options. There were no stock option exercises during the three months ended April 30, 2025.

Stock Awards:

Under the Plan, the Company can also grant stock awards to employees and directors. For the three months ended April 30, 2026 and 2025, compensation expense for stock awards was $1.1 million for both periods. As of April 30, 2026, there was approximately $9.9 million of unrecognized compensation cost related to unvested stock awards. These costs are expected to be recognized over a weighted-average period of 2.3 years.

Stock awards granted by the Company can be classified as either time-based stock awards or performance-based stock awards. Time-based stock awards vest over time in the number of shares established at grant date, subject to continued employment. Performance-based stock awards vest over time subject both to continued employment and to the achievement of corporate financial performance goals. Upon the vesting of a stock award, shares are issued from the pool of authorized shares. The number of shares to be issued related to the outstanding performance-based stock awards can vary from 0% to 200% of the target number of underlying stock award units, established at grant date, depending on the particular stock awards and the extent of the achievement of the predetermined financial goals. There were 35,827 and 27,084 shares of common stock of the Company tendered by the employee for the payment of the employee's withholding tax obligation totaling $0.9 million and $0.5 million for the three months ended April 30, 2026 and 2025, respectively. The total fair value of stock award units that vested during the first three months of fiscal 2027 was $4.0 million.