NOVAVAX INCNVAX
NOVAVAX INC Stock Compensation Disclosure
Stock-Based Compensation
Equity Plans
In January 2023, the Company established the 2023 Inducement Plan (the “2023 Inducement Plan”), which provides for the granting of share-based awards to individuals who were not previously employees, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company. The Company reserved 1.0 million shares of common stock for grants under the 2023 Inducement Plan. As of December 31, 2025, there were 0.1 million shares available for issuance under the 2023 Inducement Plan.
The 2015 Stock Incentive Plan, as amended (“2015 Plan”), was approved at the Company’s annual meeting of stockholders in June 2015. Under the 2015 Plan, equity awards may be granted to officers, directors, employees, and consultants of and advisors to the Company and any present or future subsidiary.
The 2015 Plan authorizes the issuance of up to 27.5 million shares of common stock under equity awards granted under the 2015 Plan. All such shares authorized for issuance under the 2015 Plan have been reserved. The 2015 Plan will expire on March 30, 2033. As of December 31, 2025, there were 6.7 million shares available for issuance under the 2015 Plan.
The Amended and Restated 2005 Stock Incentive Plan (“2005 Plan”) expired in February 2015 and no new awards may be made under such plan, although awards will continue to be outstanding in accordance with their terms.
The 2023 Inducement Plan and the 2015 Plan permit, and the 2005 Plan permitted, the grant of stock options (including incentive stock options), restricted stock, stock appreciation rights (“SARs”), and restricted stock units (“RSUs”). In addition, under the 2023 Inducement Plan and the 2015 Plan, unrestricted stock, stock units, and performance awards may be granted. Stock options and SARs generally have a maximum term of ten years and may be or were granted with an exercise price that is no less than 100% of the fair market value of the Company’s common stock at the time of grant. Grants of share-based awards are generally subject to vesting over periods ranging from one to to four years.
The Company recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of sales | $ | 1,361 | $ | 3,431 | $ | 3,417 | |||||||||||
| Research and development | 14,068 | 20,868 | 41,211 | ||||||||||||||
| Selling, general, and administrative | 20,586 | 23,853 | 40,729 | ||||||||||||||
| Total stock-based compensation expense | $ | 36,015 | $ | 48,152 | $ | 85,357 | |||||||||||
During the year ended December 31, 2023, total stock-based compensation capitalized in inventory was $0.5 million. No stock-based compensation was capitalized in inventory during the year ended December 31, 2025 and 2024.
As of December 31, 2025, there was approximately $42 million of total unrecognized compensation expense related to unvested stock options, SARs, RSUs, and the ESPP. This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of approximately 1.1 years and will be allocated between cost of sales, research and development, and general and administrative expenses accordingly. This estimate does not include the impact of other possible stock-based awards that may be made during future periods.
The aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money stock options and SARs) that would have been received by the holders had all stock option and SARs holders exercised their stock options and SARs on December 31, 2025. This amount is subject to change based on changes to the closing price of the Company’s common stock. The aggregate intrinsic value of stock options and SARs exercises and vesting of RSUs for the years ending December 31, 2025, 2024, and 2023 was approximately $20 million, $13 million, and $5 million, respectively.
Stock Options and Stock Appreciation Rights
The following is a summary of stock options and SARs activity under the 2023 Inducement Plan, 2015 Plan and the 2005 Plan for the year ended December 31, 2025:
| 2023 Inducement Plan | 2015 Plan | ||||||||||||||||||||||
| Stock Options | Weighted- Average Exercise Price | Stock Options & SARs | Weighted- Average Exercise Price | ||||||||||||||||||||
| Outstanding at January 1, 2025 | 486,950 | $ | 10.45 | 3,496,052 | $ | 32.75 | |||||||||||||||||
| Granted | — | $ | — | 2,461,163 | $ | 7.74 | |||||||||||||||||
| Exercised | — | $ | — | (45,855) | $ | 6.58 | |||||||||||||||||
| Canceled | — | $ | — | (689,363) | $ | 52.56 | |||||||||||||||||
| Outstanding at December 31, 2025 | 486,950 | $ | 10.45 | 5,221,997 | $ | 18.58 | |||||||||||||||||
| Shares exercisable at December 31, 2025 | 312,134 | $ | 10.67 | 2,256,914 | $ | 32.74 | |||||||||||||||||
The fair value of stock options granted under the 2023 Inducement Plan and the 2015 Plan was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted average Black-Scholes fair value of stock options and SARs granted | $5.60 | $5.94 | $7.00 | ||||||||||||||
| Risk-free interest rate | 3.7%-4.1% | 4.1%-4.3% | 3.5%-4.8% | ||||||||||||||
| Dividend yield | —% | —% | —% | ||||||||||||||
| Volatility | 94.6%-121.7% | 104.4%-121.8% | 120.4%-140.3% | ||||||||||||||
| Expected term (in years) | 3.5-6.5 | 3.8-6.3 | 3.9-6.4 | ||||||||||||||
The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2023 Inducement Plan and 2005 Plan as of December 31, 2025 was less than $1.3 million and 7.5 years, respectively. The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2023 Inducement Plan and 2005 Plan as of December 31, 2025 was less than $0.7 million and 5.8 years, respectively.
Restricted Stock Units
The following is a summary of RSU activity for the year ended December 31, 2025:
| 2023 Inducement Plan | 2015 Plan | ||||||||||||||||||||||
| Number of Shares | Per Share Weighted- Average Fair Value | Number of Shares | Per Share Weighted- Average Fair Value | ||||||||||||||||||||
Outstanding and unvested at January 1, 2025 | 285,429 | $ | 10.42 | 5,558,642 | $ | 8.27 | |||||||||||||||||
| Restricted stock units granted | — | $ | — | 3,705,898 | $ | 7.81 | |||||||||||||||||
| Restricted stock units vested | (135,586) | $ | 10.49 | (2,268,830) | $ | 11.33 | |||||||||||||||||
| Restricted stock units forfeited | — | $ | — | (1,104,121) | $ | 7.49 | |||||||||||||||||
| Outstanding and unvested at December 31, 2025 | 149,843 | $ | 10.35 | 5,891,589 | $ | 6.95 | |||||||||||||||||
Employee Stock Purchase Plan
The ESPP was approved at the Company’s annual meeting of stockholders in June 2013. The ESPP currently authorizes an aggregate of 2.3 million shares of common stock to be purchased, and the aggregate amount of shares will continue to increase 5% on each anniversary of its adoption up to a maximum of 3.5 million shares. The ESPP allows employees to purchase shares of common stock of the Company at each purchase date through payroll deductions of up to a maximum of 15% of their compensation, at 85% of the lesser of the market price of the shares at the time of purchase or the market price on the beginning date of an option period (or, if later, the date during the option period when the employee was first eligible to participate). At December 31, 2025, there were 0.5 million shares available for issuance under the ESPP.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.