INNODATA INC Stock Compensation Disclosure

11.        Stock Based Compensation

The Innodata Inc. 2013 Stock Plan (as amended, the “2013 Plan”) expired in accordance with its terms on June 3, 2023. Pursuant to the terms of the 2013 Plan, no further awards may be granted under the 2013 Plan following its expiration. As of December 31, 2025, there were 2,639,893 shares of our common stock underlying outstanding options or rights under the 2013 Plan. Outstanding awards made under the 2013 Plan prior to the 2013 Plan’s expiration will remain in effect until such awards have been satisfied or terminated in accordance with the terms of the 2013 Plan and such awards.

On June 9, 2023, stockholders of the Company approved amendments to the Innodata Inc. 2021 Equity Compensation Plan (as amended, the “2021 Plan”). The number of shares of common stock of Innodata Inc. that may be delivered, purchased or used for reference purposes (with respect to stock appreciation rights or stock units) for awards granted under the 2021 Plan is 4,000,000 (the “Share Reserve”). Shares subject to an option or stock appreciation right granted under the 2021 Plan count against the Share Reserve as one share for every share granted, and shares subject to any other type of award granted under the 2021 Plan count against the Share Reserve as two shares for every share granted for awards granted prior to April 11, 2023, and one and a half shares for every share granted for awards granted on or after April 11, 2023. Any shares withheld, tendered or exchanged by a participant in the 2021 Plan as full or partial payment to Innodata of the exercise price under an option under the 2021 Plan, or in satisfaction of a participant’s tax withholding obligations with respect to any award under the 2021 Plan, will not be added back to the Share Reserve.

The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted, and weighted-average assumptions were as follows:

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There were no stock options granted in 2025.

The Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant. The expected term of options granted is based on a combination of vesting schedules, term of the options and historical experience. Expected volatility is based on the historical volatility of the Company’s common stock. The Company uses an expected dividend yield of zero since it has never declared or paid any dividends on its capital stock.

Stock Options

2013 Plan

A summary of option activity under the 2013 Plan and changes during the year ended December 31, 2025 are presented below.

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2021 Plan

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A summary of option activity under the 2021 Plan and changes during the year ended December 31, 2025 are presented below.

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During the year ended December 31, 2025, a total of 755,552 options were exercised at an average exercise price of $4.41.

The compensation cost related to non-vested stock options not yet recognized as of December 31, 2025 totaled approximately $5.6 million. The weighted-average period over which these costs will be recognized is 24 months.

Restricted Stock Units

Restricted Stock Unit (“RSU”) activity under the Equity Plans during the year ended December 31, 2025 are presented below:

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On December 31, 2025, the Company granted time-based RSUs and Performance RSUs. A portion of the RSUs vest based solely on continued service, while the remaining portion vest based on the achievement of specified performance objectives and continued service.

There were a total of 15,175 restricted stock units granted to non-employee directors during the year ended December 31, 2025.

The compensation cost related to non-vested RSUs and PRSUs, not yet recognized as of December 31, 2025 totaled approximately $55.7 million. The weighted-average period over which these costs will be recognized is 32 months.