Our 2025 Omnibus Incentive Plan (the “2025 Omnibus Incentive Plan”), which became effective on May 7, 2025, provides for the granting of equity-based awards, as described in our Annual Report on Form 10-K for the year ended December 31, 2025. At June 30, 2026, 3.9 million shares of common stock were available for issuance pursuant to future grants under the plan.

Service-Based Stock Option Awards

We grant stock options to directors and select executives with vesting based on specified service periods. Vesting terms vary with each grant and option awards are generally five to ten years following the date of grant. We recognize compensation expense on a straight-line basis over the service period specified in the award. We granted 17,638 and 11,021 service-based stock option awards during the six-month periods ended June 30, 2026, and 2025, respectively.

The fair value of service-based stock options granted in 2026 was estimated using a Black-Scholes valuation model with the following weighted average assumptions:

The risk-free interest rate assumptions were based on the U.S. Treasury yield curve in effect at the time of the grant. The expected volatility was based on historical monthly price changes of our stock based on the expected life of the options at the date of grant. The expected life of options is the average number of years we estimate that options will be outstanding. We consider groups of associates that have similar historical exercise behavior separately for valuation purposes.

The following table summarizes service-based stock option activity for the six-month period ended June 30, 2026:

Performance-Based Stock Option Awards

We also grant stock options to selected executives with vesting contingent upon meeting certain Company-wide performance goals. The performance goals for options issued in 2024 are based on reaching a total recurring contract value target, measured at the end of the performance period, December 31, 2026. Vesting is also dependent upon remaining in our employment through the performance period. The performance awards issued in 2024 have a six-year contractual term. We recognize compensation expense prospectively from the date it is deemed probable that the performance goal will be met through the end of the performance period. We did not recognize compensation expense related to performance-based awards in 2026 or 2025 since achieving the performance goals was not deemed probable. There was no activity related to performance‑based stock option awards during the six- month period ended June 30, 2026.

As of June 30, 2026, the total unrecognized compensation cost related to non-vested performance-based and service-based stock option awards was approximately $1.3 million which was expected to be recognized over a weighted average period of 2.0 years.

There was $139,000 and $132,000 of cash received from stock options exercised during the six-month periods ended June 30, 2026, and 2025, respectively. We recognized $70,000 and ($87,000) of non-cash compensation expense (benefit) for the three-month periods ended June 30, 2026, and 2025, respectively, and $315,000 and $84,000 of non-cash compensation expense for the six-month periods ended June 30, 2026, and 2025, respectively, related to options, which is included in selling, general, and administrative expenses.

Non-vested Stock Awards

We granted 700,000 shares of non-vested restricted stock awards (RSAs) during the six-month period ended June 30, 2025. No non-vested RSAs were granted in 2026. We recognized non-cash compensation expense of $6.8 million and $394,000 for the three-month periods ended June 30, 2026, and 2025, respectively, and $7.8 million and $394,000 for the six-month periods ended June 30, 2026, and 2025, respectively, related to non-vested RSAs, which is included in selling, general, and administrative expenses. As of June 30, 2026, the total unrecognized compensation expense related to non-vested RSAs was approximately $929,000 which is expected to be recognized over a weighted average period of 1.6 years. The following table summarizes non-vested RSAs activity for the six-month period ended June 30, 2026:

On April 27, 2026, the Compensation and Talent Committee of the Board of Directors approved amendments to certain equity awards granted to three executives in 2025. The amendments eliminated the Company's right to repurchase shares underlying the awards if the executives' employment terminated under certain circumstances prior to the third anniversary of the respective grant dates.

As a result of these amendments, the Company recognized approximately $6.5 million of accelerated stock-based compensation expense during the three and six months ended June 30, 2026, substantially all of which would otherwise have been recognized ratably through the second quarter of 2028.

Restricted Stock Units

We granted 198,485 restricted stock units (RSUs) during the six-month period ended June 30, 2026. No RSUs were granted in 2025. RSUs do not carry dividend or voting rights prior to vesting. At June 30, 2026, 198,485 RSUs were outstanding, with total remaining unrecognized compensation expense of $2.7 million expected to be recognized over a weighted‑average period of 1.5 years. We recognized non‑cash compensation expense of $506,000 and $837,000 for the three and six-month periods ended June 30, 2026, respectively, related to RSUs, which is included in selling, general, and administrative expenses. No expense was recognized in 2025. The following table summarizes RSU activity for the six-month period ended June 30, 2026: