12. STOCK-BASED COMPENSATION

Immersion

Stock Options and Awards

Our equity incentive program is a long-term retention program that is intended to attract, retain, and provide incentives for employees, consultants, officers, and directors and to align stockholder and employee interests. We may grant time-based options, market condition-based options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, market condition-based performance restricted stock units (“PSUs”), and other stock-based equity awards to employees, officers, directors, and consultants.

On January 18, 2022, our stockholders approved the 2021 Equity Incentive Plan (as amended, the “2021 Plan”), which provides for a total number of shares reserved and available for grant and issuance equal to 3,525,119 shares plus up to an additional 855,351 shares that are subject to stock options or other awards previously granted under the 2011 Equity Incentive Plan. On March 30, 2023, our stockholders approved an amendment to the 2021 Plan which increased the total number of shares reserved and available for grant and issuance equal to 8,146,607 shares plus up to an additional 855,351 shares that are subject to stock options or other awards previously granted under the 2011 Equity Incentive Plan.

Under our equity incentive plans, stock options may be granted at prices not less than the fair market value on the date of the grant for stock options. Stock options generally vest over four years and expire seven years from the grant date. Market condition-based stock awards are subject to a market condition whereby the closing price of our common stock must exceed a certain level for a number of trading days within a specified time frame or the awards will be canceled before expiration. RSAs generally vests over one year. RSUs generally vest over three years. Awards granted other than a stock option or a stock appreciation right shall reduce the common stock shares available for grant by 1.75 shares for every share issued.

Restricted Stock Units

During the fiscal year ended April 30, 2026, the fair value of RSU awards that vested was $6.3 million.

Restricted Stock Awards

Stock-based Compensation Expense

Valuation and amortization methods Stock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. Estimated forfeitures are based on historical experience at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

As of April 30, 2026, there was $2.6 million of unrecognized compensation cost adjusted for estimated forfeitures related to non-vested stock options, RSUs, RSAs, and PSUs granted to our employees and directors. This unrecognized compensation cost will be recognized over an estimated weighted-average period of approximately 1.19 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.

Barnes & Noble Education

Barnes & Noble Education has reserved 2,179,093 shares of its common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock (“RS”), restricted stock units (“RSU”), performance shares (“PS”), performance share units (“PSU”), and phantom share units (or “Phantom Shares”).

Barnes & Noble Education recognizes compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years. Barnes & Noble Education recognizes compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. Barnes & Noble Education calculates the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, Barnes & Noble Education has determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied.

Restricted Stock Awards

An RS award is an award of common stock that is subject to certain restrictions during a specified period. RS awards are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares have vested) and are considered to be currently issued and outstanding. RS awards will have a minimum vesting period of one year.

An RSU is a grant valued in terms of Barnes & Noble Education’s common stock, but no stock is issued at the time of grant. Each RSU may be redeemed for one share of Barnes & Noble Education common stock once vested. RSUs are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares associated with unvested RSUs have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the units have vested). RSUs generally vest over a period of three years, but will have a minimum vesting period of one year.

Stock Options

For stock options granted with an “at market” exercise price, Barnes & Noble Education determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, Barnes & Noble Education determined the grant date fair value using the Monte Carlo simulation model. The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options. The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. The expected stock option term represents the weighted average period of time that stock options granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options. Volatility is based on the historical volatility of Barnes & Noble Education’s common stock over a period of time corresponding to the expected stock option term. The stock options are exercised in four equal annual installments commencing one year after the date of grant and have a ten-year term. Holders are not entitled to receive dividends (if any) prior to vesting and exercising of the options.

Long-Term Incentive Compensation Activity

On June 11, 2024, Barnes & Noble Education completed the reverse stock split, which was approved by stockholders at a special meeting held on June 5, 2024. In connection with the reverse stock split, every 100 shares of the common stock issued and outstanding were converted into one share of BNED Common Stock. The following table presents a summary of awards activity related to our current Equity Incentive Plan and reflects the reverse stock split for all periods presented:

During the fiscal year ended April 30, 2026, Barnes & Noble Education granted the following awards under their Barnes & Noble Education Equity Incentive Plan:

The aggregate grant date fair value of stock options that vested for the fiscal years ended April 30, 2026 and 2025, was $0.2 million and $0.6 million, respectively, and the total fair value of vested share awards for the fiscal years ended April 30, 2026 and 2025 were $4.0 million and $2.3 million, respectively.

Long-Term Incentive Compensation Expense

Total unrecognized compensation cost related to unvested awards as of April 30, 2026, was $5.6 million and is expected to be recognized over a weighted-average period of 1.55 years.