11. STOCK-BASED COMPENSATION

2015 Equity Incentive Plan. The 2015 Equity Incentive Plan (“2015 Plan”), as approved by stockholders and further amended in May 2021, allows for the issuance of up to 4,500,000 shares of common stock. The 2015 Plan allows for stock-based awards to be granted to directors, employees and consultants and allows for a variety of forms of awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and performance-based compensation. Stock option awards have maximum 10-year terms, and no awards issued under the 2015 Plan vest on an accelerated basis if there is a change in control of the Company, unless the awards are not assumed by the successor, as defined.

As of December 31, 2024, the Company had 133,962 stock-based awards authorized by stockholders and available for grant from the 2015 Plan.

Performance-Based Shares. The Company issued a total of 176,377 performance-based shares to its executives in 2024. The vesting for these performance-based shares is based on the compounded annual growth rate of the Company’s Adjusted EBITDA and Free Cash Flow Per Share, as defined and adjudicated by the Company’s compensation committee, for the three-year periods ending December 31, 2024, December 31, 2025, and December 31, 2026.

Restricted Stock Awards. On May 9, 2024, the Company issued to non-executive members of its Board of Directors, as compensation for their annual service, a total of 84,906 restricted shares under the 2015 Plan, with a one-year vesting period. Also in May 2024, the Company issued to employees a total of 207,125 restricted shares under the 2015 Plan, with a three-year vesting period. An additional 28,135 restricted shares were issued to newly-hired employees in November 2024 as “inducement grants” outside of the 2015 Plan, with a three-year vesting period.

Stock Options. The following table summarizes information related to the Company’s common stock options:

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Compensation Cost. Compensation expense is as follows:

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At December 31, 2024, there was approximately $1.1 million of unrecognized compensation cost related to unvested stock options granted by the Company, which is expected to be recognized over a weighted-average period of 1.3 years. At such date, there was also $2.2 million of unrecognized compensation cost related to unvested restricted and performance shares, which is expected to be recognized over a weighted-average period of 1.7 years.

The Company estimates the fair value of each stock option award on the grant date using the Black-Scholes valuation model. Option valuation models require the input of highly subjective assumptions, and changes in assumptions used can materially affect the fair value estimate. Option valuation weighted-average assumptions were as follows:

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Expected volatility is based on the historical volatility of our stock price. Dividend yield is based on the estimate of annual dividends expected to be paid at the time of the grant. The expected term considers the contractual term of the option as well as historical exercise and forfeiture behavior. The risk-free interest rate is based on the rates in effect on the grant date for U.S. Treasury instruments with maturities matching the relevant expected term of the award.

Therefore, the weighted-average grant date fair value per share of options granted is as follows:

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