LINDBLAD EXPEDITIONS HOLDINGS, INC. Stock Compensation Disclosure

NOTE 13 — STOCK-BASED COMPENSATION

The Company’s 2021 Long-Term Incentive Plan, approved by the Company’s compensation committee in 2021 and amended in June 2025, authorizes restricted time and performance awards and stock options to key employees. The Company's stock-based compensation program is a long-term retention program that provides for the grant of options, restricted stock, restricted stock units (“RSUs”), performance-based restricted stock or units (“PSUs”) and/or market stock units (“MSUs”) to attract, retain and provide incentives for directors, officers and employees. The maximum number of shares reserved for the grant of awards under the plan is 9.3 million, with approximately 5.8 million shares available as of December 31, 2025. The Company settles stock-based awards with newly issued shares.

Restricted Stock and Restricted Stock Units

Restricted stock is shares of stock granted to an employee, non-employee director or other service providers for which sale is prohibited for a specified period of time. Restricted stock typically vests ratably over a one or three-year period following the date of grant. RSUs represent a promise to deliver shares to the employee, non-employee director or other service providers at a future date if certain vesting conditions are met. RSUs typically vest ratably over a three-year period following the date of grant. The Company does not deliver the shares associated with the RSUs to the employee, non-employee director or other service providers until the vesting conditions are met. The number of shares or units granted are determined based upon the closing price of the Company's common stock on the date of the award.

Market Stock Units

MSUs represent a promise to deliver shares to the employee, non-employee director or other service providers at a future date if certain performance and vesting conditions are met. The MSUs are market-based equity incentive awards based on a performance-multiplier of change in the stock price of the Company’s common stock between the grant date and a determined closing price. Each MSU represents the right to receive one share of Company stock multiplied by a performance multiplier or, at the option of the Company, an amount of cash. The number of shares that will eventually be earned and vest may be more or less than the number of MSUs that are awarded, depending on the Company’s common stock price. Awards, if earned, will vest after a determined performance period and may be earned at a level ranging from 0%-150% of the number of MSUs granted, depending on performance. The number of units granted were determined based upon the closing price of the Company's common stock on the date of the award.

The Company assessed the applicable metrics related to the MSU grants, estimating the fair value of employee MSU awards and the amount of stock compensation expense using the Monte-Carlo pricing model.

Performance Stock Units

PSUs represent a promise to deliver shares to the employee, non-employee director or other service providers at a future date if certain performance and vesting conditions are met. PSUs generally vest three years following the date of grant based on the attainment of performance- or market-based goals, all of which are subject to a service condition. The Company does not deliver the shares associated with the PSUs to the employee, non-employee director or other service providers until the performance and vesting conditions are met. 

The PSUs granted may be earned based on the Company's performance against metrics relating to annual Adjusted EBITDA and annual revenue. Awards, if earned, will vest after a three-year performance period and may be earned at a level ranging from 0%-200% of the number of PSUs granted, depending on performance. The number of units were determined based upon the closing price of the Company's common stock on the date of the award. The Company assessed the applicable metrics related to the PSU grants, determined the blended probability of achieving the performance metrics and valued the awards based on the fair value at the date of grant with the amount of stock compensation expense determined based on the number of PSU’s expected to vest. 

Long-Term Incentive Compensation

See the following table for a summary of PSU, restricted stock, RSU and MSU activity.

Stock Options

The following table is a summary of stock option activity:

During the year ended December 31, 2025, 618,091 options with an intrinsic value of $3.3 million were exercised, and during the year ended December 31, 2024, 263,000 options with an intrinsic value of $0.3 million were exercised. No options were exercised during the year ended December 31, 2023.

Stock-based Compensation Expense

Stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023 was $13.5 million, $9.8 million and $13.9 million, respectively, and is included in general and administrative expenses. The Company recognized no income tax benefits for stock-based compensation plans for the years ended December 31, 2025, 2024 and 2023. As of December 31, 2025, unrecognized stock-based compensation expense was $13.0 million. This amount is expected to be recognized over a weighted average period of approximately 1.8 years.

Mr. Bressler’s employment agreement, as amended, provides Mr. Bressler with an equity incentive opportunity, established in 2016, to earn an award of options based on the long-term future financial performance of Natural Habitat. During 2025, the award was modified to extend the performance period from December 31, 2025, to December 31, of any given year that Mr. Bressler exercises his put right (see Note 10—Commitments and Contingencies), aligning the percentage of the option award to be granted each year with the percentage of put exercised by Mr. Bressler.

The equity incentive opportunity award, as amended, is based on the future financial performance of Natural Habitat, where if the final year equity value of Natural Habitat, as defined in Mr. Bressler's employment agreement, exceeds $25.0 million, effective as of the preceding  December 31, of any given year that Mr. Bressler exercises his put right, Mr. Bressler will be granted options with a fair value equal to 5.05% of such excess in proportion to the percentage of the put option exercised. The actual number of options granted will be determined by the calculated final year equity value of Natural Habitat divided by the Black-Scholes per share option value, factoring in the Company’s stock price on the date of the issuance of the options, its volatility and an appropriate risk-free rate. The options will be vested as of the issuance date and have a term of ten years.

During the three months ended  March 31, 2024, Mr. Bressler exercised a right to elect to receive 50% of such award early under the previous agreement, which was calculated based on performance through  December 31, 2023. As a result of the early exercise, during the three months ended  March 31, 2024, the Company issued 1.3 million fully vested options to Mr. Bressler. In 2023, the Company determined it was probable the performance condition would be met related to the 2023 portion of the previous award and recorded all expense related to it. The performance condition related to the remaining equity incentive opportunity of the previous award through  December 31, 2025 was also deemed probable in 2023 and the Company has recorded the related expense on a straight-line basis through December 31, 2025. Expense related to the incremental fair value measured on the 2025 modification date of the award will be recognized when Mr. Bressler exercises the put and option award and the performance condition is deemed probable. For the years ended December 31, 2025, 2024 and 2023, stock-based compensation expense related to this award was $4.2 million, $3.2 million and $8.0 million, respectively, reflecting the long-term growth and strong performance of the business. As of December 31, 2025, the unrecognized expense related to this award was $5.1 million.

Additionally, Mr. Bressler’s employment agreement, as amended, provides a one-time equity incentive opportunity, granted in 2022, to earn an award of Company stock based on the financial performance of the Land Experiences segment businesses that Mr. Bressler manages over a defined performance period ending December 31, 2025, as defined in Mr. Bressler’s employment agreement, as amended, under the managed business value creation. The Company determined that it was probable that the performance condition for this award would be met. For the year ended  December 31, 2025, the Company recorded $4.0 million in stock-compensation expense related to this award.