On July 20, 2021, the stockholders of the Company approved the Tile Shop Holdings, Inc. 2021 Omnibus Equity Compensation Plan (the “2021 Plan”). The 2021 Plan replaced the 2012 Omnibus Award Plan (the “Prior Plan”). Awards granted under the Prior Plan that were outstanding on the date of stockholder approval remained outstanding in accordance with their terms. The maximum number of shares that may be delivered with respect to awards under the 2021 Plan is 3,500,000 shares, subject to adjustment in certain circumstances. Shares tendered or withheld to pay the exercise price of a stock option or to cover tax withholding will not be added back to the number of shares available under the 2021 Plan. To the extent that any award under the 2021 Plan, or any award granted under the Prior Plan prior to stockholder approval of the 2021 Plan, is forfeited, canceled, surrendered or otherwise terminated without the issuance of shares or an award is settled only in cash, the shares subject to such awards granted but not delivered will be added to the number of shares available for awards under the 2021 Plan.

During the years ended December 31, 2025, 2024 and 2023, the Company did not grant any stock options to its employees or record material stock compensation expense related to stock options. As of December 31, 2025, all options outstanding were fully vested and all compensation cost has been recognized. Prior to 2020, the Company granted stock options to its employees that included service condition requirements. The options provide for certain acceleration of vesting and cancellation of options under different circumstances, such as a change in control, death, disability and termination of service. The Company recognizes compensation expense on a straight-line basis over the requisite service period, net of actual forfeitures.

The following table summarizes stock option activity during the years ended December 31, 2025, 2024 and 2023:



	Shares	Weighted ‎Average ‎Exercise ‎Price		Weighted Avg. Grant Date Fair Value		Weighted Avg. ‎Remaining ‎Contractual ‎Term (Years)	Aggregate ‎Intrinsic ‎Value ‎(in thousands)
Balance, January 1, 2023	558,067	$	11.22	$	4.82	4.2	$	-
Granted	-	$	-	$	-
Exercised	(50,000)	$	6.26	$	2.57
Cancelled/Forfeited	(197,350)	$	18.33	$	8.58
Balance, December 31, 2023	310,717	$	7.51	$	3.17	3.8	$	236
Granted	-	$	-	$	-
Exercised	-	$	-	$	-
Cancelled/Forfeited	(15,350)	$	15.97	$	6.52
Balance, December 31, 2024	295,367	$	7.07	$	3.00	3.6	$	159
Granted	-	$	-	$	-
Exercised	-	$	-	$	-
Cancelled/Forfeited	-	$	-	$	-
Balance, December 31, 2025	295,367	$	7.07	$	3.00	2.6	$	-
Exercisable at December 31, 2025	295,367	$	7.07	$	3.00		$	-
Vested and expected to vest, December 31, 2025	295,367	$	7.07	$	3.00		$	-

The aggregate intrinsic value is the difference between the exercise price and the closing price of the Company’s stock on December 31.

The Company awards restricted common shares to selected employees and non-employee directors. Recipients are not required to provide any consideration upon vesting of the award. Restricted stock awards are subject to certain restrictions on transfer, and all or part of the shares awarded may be subject to forfeiture upon the occurrence of certain events, including employment termination. Certain awards are also subject to forfeiture if the Company fails to attain its Adjusted EBITDA or Pretax Return on Capital Employed performance targets. The restricted common stock is valued at its grant date fair value and expensed over the requisite service period or the vesting term of the awards. The Company adjusts the cumulative expense recognized on awards with performance conditions based on the probability of achieving the performance condition.

The following table summarizes restricted stock activity during the years ended December 31, 2025, 2024 and 2023:



	Shares	Weighted Avg. ‎Grant Date ‎Fair Value
Nonvested, January 1, 2023	1,176,902	$	4.46
Granted	611,154	$	4.98
Vested	(448,506)	$	3.47
Forfeited	(372,645)	$	5.28
Nonvested, December 31, 2023	966,905	$	4.93
Granted	497,893	$	6.69
Vested	(334,014)	$	4.07
Forfeited	(275,689)	$	5.81
Nonvested, December 31, 2024	855,095	$	6.01
Granted	427,131	$	7.14
Vested	(204,450)	$	6.31
Forfeited	(346,720)	$	6.05
Nonvested, December 31, 2025	731,056	$	6.57

The total expense associated with restricted stock for the years ended December 31, 2025, 2024, and 2023 was $1.3 million, $1.3 million, and $1.4 million, respectively.

Each fiscal year, the Company grants restricted share awards subject to forfeiture on the date the Company files its annual report on Form 10-K for each of the three fiscal years starting with the fiscal year of grant, if the Company fails to attain certain performance targets in each year. In 2025, the Company granted restricted share awards subject to forfeiture on the date the Company files its annual report on Form 10-K for each of the 2025, 2026 and 2027 fiscal years if the Company fails to attain certain Pretax Return on Capital Employed performance targets in 2025, 2026 and 2027. The Company did not attain any of the Pretax Return on Capital Employed performance measures in 2025, and accordingly, did not record any expense in connection with the performance share awards in 2025.

As of December 31, 2025, there was $2.6 million of total unrecognized expense related to unvested restricted stock awards, which are expected to vest, and will be expensed over a weighted average period of 1.4 years. The fair value of restricted stock granted in fiscal years 2025 and 2024 was $3.1 million and $3.3 million, respectively. The total fair value of restricted stock that vested in fiscal years 2025 and 2024 was $1.3 million and $2.2 million, respectively. Using the closing stock price of $3.52 on December 31, 2025, the 731,056 restricted shares outstanding and expected to vest as of December 31, 2025 had an intrinsic value of $2.6 million.