SHARE-BASED COMPENSATION
In June 2018, the Company adopted the 2018 Team, Inc, Equity Incentive Plan (as amended and restated in May 2021 and May 2024, the “2018 Plan”) pursuant to which our Board of Directors may grant stock options, restricted stock, stock units, stock appreciation rights, common stock or performance awards to officers, directors and key employees.
As of December 31, 2025, the 2018 Plan had 490,465 shares available for issuance of which 338,403 performance award shares were granted in 2023 and 2025 which become issuable if 100% of performance target is achieved, and can be settled in shares, cash or a combination thereof when vested. These performance awards are discussed in further detail below.
Compensation expense related to share-based compensation totaled $0.8 million and $2.3 million for the years ended December 31, 2025 and 2024, respectively. Share-based compensation expense reflects an estimate of expected forfeitures. As of December 31, 2025, $0.9 million of unrecognized compensation expense related to share-based compensation is expected to
be recognized over a remaining weighted-average period of 0.9 years. There was no income tax benefit recognized for the years ended December 31, 2025 or 2024.
Restricted Stock Units (RSUs)
Restricted stock units are settled with common stock upon vesting unless it is not legally feasible to issue shares, in which case the value of the award is settled in cash. We determine the fair value of each stock unit based on the market price on the date of grant. Stock units generally vest in annual installments over three years and the expense associated with the units is recognized ratably over the same vesting period. Compensation expense related to RSUs totaled $0.5 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively.
Transactions involving our restricted stock unit grants for the twelve months ended December 31, 2025 are summarized below:
Twelve Months Ended
December 31, 2025
 No. of Stock
Units
Weighted 
Average
Fair Value at Date of Grant
 (in thousands) 
Stock and stock units, beginning of year145 $8.21 
Changes during the year:
Granted14.48 
Vested and settled(64)8.21 
Cancelled(34)8.22 
Stock and stock units, end of year52 $8.88 
The intrinsic value of stock units vested during the years ended December 31, 2025 and 2024 was $1.1 million and $2.0 million, respectively.
Performance Stock Units (PSUs)
During the year ended December 31, 2025, the Company granted 11,097 long-term performance stock units to certain executives, in addition to 327,306 units granted in 2023 that remain outstanding as of December 31, 2025. The vesting of these awards is contingent upon the achievement of a non-market condition milestone, specifically related to our adjusted EBITDA performance. For these awards, we recognize compensation expense over the vesting term on a straight-line basis based upon the performance target that is probable of being met, subject to adjustment for changes in the expected or actual performance outcome. For performance awards, we recorded an expense of $0.3 million and $1.3 million for the years ended December 31, 2025 and 2024, respectively.

Transactions involving our performance awards during the twelve months ended December 31, 2025 are summarized below:
 Twelve Months Ended
December 31, 2025
 
No. of Stock
Units1
Weighted
Average
Fair Value at Date of Grant
 (in thousands) 
Performance stock units, beginning of year445 $8.22 
Changes during the period:
Granted11 14.48 
Cancelled and forfeited(118)8.22 
Performance stock units, end of year338 $8.43 
__________________________
1    Performance units with variable payouts are shown at target level of performance.

    There were no performance stock units vested during the years ended December 31, 2025 and 2024.

Historical Timeline

Fiscal YearFiled
2025Mar 12, 2026Showing above
2024Mar 19, 2025
2023Mar 7, 2024
2022Mar 14, 2023
2021Mar 16, 2022
2020Mar 12, 2021
2019Mar 16, 2020
2018Mar 19, 2019
2017Mar 15, 2018
2016Mar 16, 2017

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.