11. STOCK-BASED COMPENSATION

2025 Equity Incentive Plan. On April 1, 2025, the Company’s Board adopted the Full House Resorts, Inc. 2025 Equity Incentive Plan (the “2025 Plan”), which was approved by stockholders at the Company’s 2025 Annual Meeting and made effective as of May 15, 2025. To maintain flexibility in the Company’s compensation program, the 2025 Plan allows for a variety of award types, including stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and performance-based compensation. The 2025 Plan includes 2,300,000 new shares and serves as the successor to the Company’s 2015 Equity Incentive Plan (the “2015 Plan”), which was terminated upon the adoption of the 2025 Plan, except with respect to awards previously granted under the 2015 Plan that remain outstanding. Stock option awards have maximum 10-year terms. Awards issued under the 2025 Plan do not 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, or on the satisfaction of a double-trigger in certain employment agreements.

As of December 31, 2025, the Company had 1,695,063 stock-based awards authorized by stockholders and available for grant from the 2025 Plan.

Performance-Based Shares. The Company issued a total of 235,862 performance-based shares to its executives in 2025. 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, 2025, December 31, 2026, and December 31, 2027.

Restricted Stock Awards. On May 19, 2025, the Company issued to non-executive members of its Board of Directors, as compensation for their annual service, a total of 102,180 restricted shares under the 2025 Plan, with a one-year vesting period. During the year, the Company issued to employees a total of 321,289 restricted shares under the 2025 Plan, with a three-year vesting period. An additional 54,153 restricted shares were issued to newly-hired employees in the first half of 2025 as “inducement grants” outside of the 2015 and 2025 Plans, 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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Restricted Stock. The following table summarizes information related to the Company’s restricted stock:

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Compensation Cost. Compensation expense is as follows:

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At December 31, 2025, there was approximately $0.5 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 1.4 years. At such date, there was also $2.8 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. We estimate the expected term based on the simplified method for employee stock options considered to be “plain vanilla” options, as our historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. 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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