BARRETT BUSINESS SERVICES INC Stock Compensation Disclosure

Note 9 - Stock Incentive Plans

The Company's 2020 Stock Incentive Plan (the "2020 Plan"), which provides for share-based awards to Company employees, non-employee directors and outside consultants or advisors, was approved by stockholders on May 27, 2020, and amended with stockholder approval on June 5, 2023, to increase the number of shares available for issuance under the 2020 Plan from 1,500,000 to 2,900,000. The number of shares available for grants of awards at December 31, 2025 was 592,654.

Share-based compensation expense included in selling, general and administrative expenses during the years ended December 31, 2025, 2024 and 2023, was $10.4 million, $8.8 million and $8.5 million, respectively. Related income tax benefits for the years ended December 31, 2025, 2024 and 2023, were $2.6 million, $2.2 million and $1.6 million, respectively.

Stock Options

Outstanding stock options generally vest over four or eight years and expire up to ten years after the date of grant.

No stock options were granted during the years ended December 31, 2025 or 2023. The weighted average fair value of stock options granted for the year ended December 31, 2024 was $12.16. There were no stock options granted with an exercise price below market price during 2024.

The intrinsic value of stock options exercised for the years ended December 31, 2025, 2024 and 2023 was $4.0 million, $0.6 million, and $0.1 million, respectively. The fair value of stock options vested for the years ended December 31, 2024 was $728,000. No stock options vested during the years ended December 31, 2025 or 2023. As of December 31, 2025, unrecognized compensation expense related to stock options was $0.5 million with a weighted average remaining amortization period of 1.9 years.

Restricted Stock Units

Restricted stock units generally vest in four equal annual installments beginning one year following the date of grant, other than restricted stock units granted to nonemployee directors, which vest one year following the date of grant.

The total fair value of restricted stock units vested during the years ended December 31, 2025, 2024 and 2023 was $6.6 million, $6.3 million and $5.1 million, respectively. As of December 31, 2025, unrecognized compensation expense related to restricted stock units was $14.9 million with a weighted average remaining amortization period of 2.7 years.

Performance Share Units

Performance share units (“PSUs”) are granted to key employees of the Company and are conditioned on attaining financial performance metrics specified in each award. Each award is subject to upward or downward adjustment depending on whether achievement of the financial metrics is above or below the target level, with a maximum payout of up to 200% of the target number of shares covered by the award.

PSUs vest on the date that the Compensation Committee determines the level of attainment of the specified financial metrics, generally measured over a three-year period.

The total grant date fair value of PSUs vested during the years ended December 31, 2025, 2024 and 2023 was $1.8 million, $1.7 million, and $1.6 million, respectively.

Employee Stock Purchase Plan

The Company offers employees the right to purchase shares at a discount from the market price under the Company’s 2019 Employee Stock Purchase Plan. Subject to the annual statutory limit, employees are eligible to participate through payroll deductions of up to 15% of their compensation. At the end of each six-month offering period, shares are purchased by the participants at 85% of the fair market value at the end of the offering period. As of December 31, 2025, approximately 993,278 shares were reserved for future issuance under the 2019 Employee Stock Purchase Plan.