TOMPKINS FINANCIAL CORPTMP
TOMPKINS FINANCIAL CORP Stock Compensation Disclosure
Stock Plans and Stock-Based Compensation
In 2019, the 2009 Tompkins Financial Corporation Equity Plan ("2009 Equity Plan") expired and was replaced by the new Tompkins Financial Corporation 2019 Equity Plan ("2019 Equity Plan"). Under the 2019 Equity Plan, the Company may grant stock options, stock appreciation rights ("SARs"), shares of restricted stock, restricted units and performance share awards covering up to 2,275,000 shares of the Company's common stock to certain officers and employees. Restricted stock awards and restricted units and performance share awards will reduce the shares available for grant under the 2019 Equity Plan by 4.25 shares for each share subject to an award, resulting in a total number of full-value share awards that may be issued under the 2019 Equity Plan of 535,294.
Stock options and SARs are granted at an exercise price equal to the stock’s fair value at the date of grant, may not have a term in excess of ten years, and have vesting periods of and seven years from the grant date. Options and SARs with an expiration date in 2026 have a five-year vesting schedule with zero percent vesting in year one and 25% vesting in years two through five. All other options and SARs have a seven-year vesting schedule with zero percent vesting in year one, 17% vesting in years two through six and 15% vesting in year seven. Restricted stock awards and restricted stock units that were granted in the periods covering 2019 through 2025 have a five-year vesting schedule with zero percent vesting in year one and 25% vesting in years two through five. For performance share awards, there is a 3-year performance period in the fiscal years immediately following the grant date, at which time the performance goal is measured. If the goal is achieved, the value of the award either vests and is immediately payable, or is subject to additional time-based vesting, depending on the terms of the particular executive’s award agreement.
The Company granted 87,584 equity awards to its employees in 2025, consisting of 61,575 shares of restricted stock, 22,380 performance stock units and 3,629 restricted stock units. The Company granted 84,019 equity awards to its employees in 2024, consisting of 57,060 shares of restricted stock, 19,929 performance share units and 7,030 restricted stock units.
The following table presents the activity related to stock options and SARs under the Company's 2009 Equity Plan and 2019 Equity Plan for the year ended December 31, 2025:
| Number of Shares/Rights | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||
| Outstanding at January 1, 2025 | 20,021 | $ | 66.51 | |||||||||||
| Granted | 0 | 0.00 | ||||||||||||
| Exercised | (10,189) | 56.29 | ||||||||||||
| Forfeited | (1,604) | 76.90 | ||||||||||||
| Outstanding at December 31, 2025 | 8,228 | $ | 77.15 | 0.83 | $ | 0 | ||||||||
| Exercisable at December 31, 2025 | 8,228 | $ | 77.15 | 0.83 | $ | 0 | ||||||||
Total stock-based compensation expense for stock options and SARs was $0 in 2025, 2024, and 2023. As of December 31, 2025, unrecognized compensation cost related to unvested stock options and SARs totaled $0. As of 12/31/2025, all outstanding SARs were "out of the money" based on that day's ending share price of $72.52. Net cash proceeds, tax benefits and intrinsic value related to total stock options, SARs, and restricted stock exercised is as follows:
| (In thousands) | 2025 | 2024 | 2023 | ||||||||
| Proceeds from stock option exercises | $ | (33) | $ | (115) | $ | (124) | |||||
| Tax benefits related to stock option exercises | (69) | (134) | (229) | ||||||||
| Intrinsic value of stock option exercises | 81 | 132 | 270 | ||||||||
The Company uses the Black-Scholes option-valuation model to determine the fair value of incentive stock options and SARs at the date of grant. The valuation model estimates fair value based on the assumptions for the risk-free rate, expected dividend yield, volatility and expected life. The risk-free rate is the interest rate available on zero-coupon U.S. Treasury instruments with a remaining term equal to the expected term of the share option at the time of grant. The expected dividend yield is based on the dividend trends and the market price of the Company’s stock price at grant. Volatility is largely based on historical volatility of the Company’s stock price. The expected term is based upon historical experience of employee exercises and terminations as the vesting term of the grants. The fair values of the grants are expensed over the vesting periods. There were no incentive stock options or SARs granted in 2025, 2024 or 2023.
| December 31, 2025 | |||||||||||||||||
| Options and SARs Outstanding | Options and SARs Exercisable | ||||||||||||||||
| Range of Exercise Prices | Number Outstanding | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number Exercisable | Weighted Average Exercise Price | ||||||||||||
$50.01-76.90 | 8,006 | 0.83 | $ | 76.90 | 8,006 | $ | 76.90 | ||||||||||
$76.91-86.18 | 222 | 0.83 | 86.18 | 222 | 86.18 | ||||||||||||
| 8,228 | 0.83 | $ | 77.15 | 8,228 | $ | 77.15 | |||||||||||
The following table presents activity related to restricted stock awards and restricted stock units for the year ended December 31, 2025:
| Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Restricted Stock & Performance Awards | ||||||||
| Unvested at January 1, 2025 | 251,220 | $ | 60.32 | |||||
| Granted | 83,955 | 67.79 | ||||||
| Vested | (42,329) | 60.10 | ||||||
| Forfeited | (51,401) | 59.43 | ||||||
| Unvested at December 31, 2025 | 241,445 | $ | 60.80 | |||||
| Restricted Stock Units | ||||||||
| Unvested at January 1, 2025 | 30,377 | $ | 67.83 | |||||
| Granted | 3,629 | 67.59 | ||||||
| Vested | (7,227) | 66.68 | ||||||
| Forfeited | (6,571) | 67.42 | ||||||
| Unvested at December 31, 2025 | 20,208 | $ | 72.52 | |||||
The Company granted 61,575 restricted stock awards, 3,629 restricted stock units, and 22,380 performance units in 2025, each at an average grant date fair value of $67.79 and an additional 144 restricted share units at $62.80. The Company granted 57,060 restricted stock awards, 7,030 restricted stock units, and 19,929 performance units in 2024, each at an average grant date fair value of $72.29. The Company granted 79,140 restricted stock awards, 12,630 restricted stock units, 28,346 performance units and 0 performance share awards in 2023 at an average grant date fair value of $51.02. The grant date fair values were the closing prices of the Company’s common stock on the grant dates. Restricted stock awards and performance units are settled in stock, and restricted stock units are settled in cash. The Company recognized stock-based compensation related to restricted stock awards, restricted stock units, and performance share awards of $3.5 million in 2025, $4.6 million in 2024, and $4.4 million in 2023. Unrecognized compensation costs related to restricted stock and performance awards totaled $9.0 million, and restricted stock units totaled $0.9 million at December 31, 2025 and will be recognized over 3.5 years on a weighted average basis.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
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.