7.   Equity Incentive Plan

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On December 4, 2025, the Company’s stockholders approved a second amendment and restatement of the 2016 Equity Incentive Award Plan (the “amended and restated 2016 Plan”). The amended and restated 2016 Plan reflects an additional increase in the number of shares of common stock available for issuance by 740,000 shares and an extension of the term of the amended and restated 2016 Plan to October 17, 2035.

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The amended and restated 2016 Plan is designed to attract, retain and motivate employees who make important contributions to the Company by providing such individuals with equity ownership opportunities. Awards granted under the amended and restated 2016 Plan may include stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. Under the amended and restated 2016 Plan, unissued shares related to forfeited or canceled awards granted under the amended and restated 2016 Plan or awards granted under the Company’s 2007 Equity Incentive Award Plan (the “Prior Plan”) (to the extent such awards granted under the Prior Plan were outstanding as of December 15, 2016 and were forfeited or canceled prior to September 19, 2022), will again be available for issuance under the amended and restated 2016 Plan. Notwithstanding the foregoing, shares tendered to pay the exercise price or tax withholding with respect to a stock option, or shares that are not issued in connection with the settlement of a stock appreciation right on exercise thereof, or shares purchased on the open market with the cash proceeds from the exercise of options will not again be available for issuance under the amended and restated 2016 Plan.

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At September 30, 2026, the remaining aggregate number of shares of the Company’s common stock authorized for future issuance under the amended and restated 2016 Plan was 2,158,430. At September 30, 2026, there were 1,016,435 shares of the Company’s common stock that remain outstanding or nonvested under the amended and restated 2016 Plan and Prior Plan.

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Compensation expense for all equity-based compensation awards is based on the grant-date fair value. The Company recognizes these compensation costs on a straight-line basis over the requisite service period, which is generally the vesting period of the award. The vesting of performance-based awards is contingent on the achievement of certain performance metrics. Compensation expense is recognized retroactively, through a cumulative catch-up adjustment, when the performance conditions are satisfied or when the Company determines that it is probable that the performance conditions will be satisfied. The amount of compensation expense recognized for a performance-based award is affected by the level of achievement attained. Management has established three levels of attainment: threshold, target, and outperform. Stock-based compensation expense is recorded within selling, general, and administrative expenses on the condensed consolidated statements of operations.

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Restricted Stock Awards

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The Company has approved grants of restricted stock awards (“RSA”) pursuant to the amended and restated 2016 Plan and Prior Plan. Under the amended and restated 2016 Plan and Prior Plan, employees, outside directors and independent contractors are able to participate in the Company’s future performance through the awards of restricted stock. Each RSA vests pursuant to the vesting schedule set forth in the restricted stock agreement granting such RSAs, generally over three years.

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Restricted stock award activity during the three months ended September 30, 2026 was as follows:

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Summary of All Restricted Stock Awards

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As of September 30, 2026, there was $47.3 million of total unrecognized compensation expense related to nonvested restricted stock awards. The cost is expected to be recognized over a weighted average period of 2.2 years. The fair value of restricted stock awards granted for the three months ended September 30, 2026 and 2025 was $32.5 million and $26.3 million, respectively. During each of the three months ended September 30, 2026 and 2025, the Company recognized $5.2 million of stock-based compensation expense related to restricted stock awards.

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Performance Share Units

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The Company has approved grants of performance share units (“PSUs”) pursuant to the amended and restated 2016 Plan. Each PSU is earned through the achievement of a performance-based metric, combined with the continuation of employee service over a defined period. The level of performance determines the number of PSUs earned, and is generally measured against threshold, target and outperform achievement levels of the award. Each PSU represents the right to receive one share of the Company’s common stock, or at the option of the Company, an equivalent amount of cash, and is classified as an equity or liability award. When the grant is a fixed monetary amount, and the number of shares is not determined until achievement and the value of the Company’s stock on that day, the PSU is a liability-classified award. Each PSU vests pursuant to the vesting schedule found in the respective PSU agreement.

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In addition to the performance conditions of the PSUs, there is a service vesting condition which is dependent upon continuing service by the grantee as an employee of the Company, unless the grantee is eligible for earlier vesting upon a change in control and qualifying termination, as defined by the PSU agreement. PSUs are generally subject to graduated vesting schedules and stock-based compensation expense is computed by tranche and recognized on a straight-line basis over the tranches’ applicable vesting period based on the expected achievement level.

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Performance share unit activity during the three months ended September 30, 2026 was as follows:

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The Company has granted PSUs under a Long-Term Incentive Plan (“LTIP”) which are tied to operating income targets (“Tranche #1”) and compounded annual stock price growth (“Tranche #2”) over a three-year performance period. Additionally, in fiscal year 2027, the Company granted PSUs under the LTIP which are tied to certain strategic initiatives over a three-year performance period. The level of performance will determine the number of PSUs earned as measured against threshold (50%), target (100%) and outperform (200%) achievement levels. The Company begins to amortize the fair value of Tranche #1 over the vesting period when it assesses that achievement is probable at the threshold level. The fair value of Tranche #2 is determined using a Monte Carlo simulation model and is amortized over the vesting period. Tranche #2 is a market-based award and therefore is not subject to any probability assessment by the Company. The following table is a summary of the PSUs outstanding:

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Fiscal Year 2024 LTIP

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In July 2026, achievement was certified at 200% of target for Tranche #1, which resulted in the vesting of 142,740 shares. In September 2026, achievement was certified at 137.5% of target for Tranche #2, which resulted in the vesting of 32,658 shares.

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Summary of All Performance Share Units

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As of September 30, 2026, there was $7.9 million of total unrecognized compensation expense related to nonvested PSUs that are expected to vest based on the Company’s probability assumptions discussed above. The cost is expected to be recognized over a weighted average period of 2.3 years. During the three months ended September 30, 2026 and 2025, the Company recognized negative stock-based compensation expense of $12.9 million and stock-based compensation expense of $5.1 million, respectively, related to PSUs.  The negative stock-based compensation was driven by the forfeiture of certain awards.

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Deferred Stock Units (“DSUs”)

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The DSUs vest on the grant-date anniversary and are settled in the form of shares of common stock issued to the holder upon separation from the Company. DSUs are specific only to board members.

Deferred stock unit activity during the three months ended September 30, 2026 was as follows:

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Summary of All Deferred Stock Units

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As of September 30, 2026, there was $0.1 million of total unrecognized compensation expense related to nonvested DSUs. The cost is expected to be recognized over a weighted average period of 0.2 years. During each of the three months ended September 30, 2026 and 2025, the Company recognized $0.2 million of stock-based compensation expense related to DSUs.