INNOVATE Corp

14. Share-based Compensation

Total share-based compensation expense recognized by the Company and its subsidiaries under all equity compensation arrangements was $0.3 million and $0.8 million for the three months ended September 30, 2024 and 2023, respectively, and was $1.1 million and $2.0 million for the nine months ended September 30, 2024 and 2023, respectively.

All grants are time based and vest either immediately or over a period established at grant, typically with a requisite service period ofone tothree years for a member of the Board of Directors or an employee to vest in the stock-based award, subject to discretion by Compensation Committee. There are no other substantive conditions for vesting. The Company recognizes compensation expense for equity awards, reduced by actual forfeitures as they are incurred, using the straight-line basis.

Restricted Stock

A summary of INNOVATE’s restricted stock activity (as adjusted for the Reverse Stock Split) is as follows:

The aggregate vesting date fair value of the restricted stock awards which vested during the nine months ended September 30, 2024 and 2023 was $0.3 million and $1.7 million, respectively. As of September 30, 2024, the total unrecognized stock-based compensation expense related to unvested restricted stock awards was $1.0 million and is expected to be recognized over the remaining weighted-average period of 1.4 years.

Stock Options

A summary of INNOVATE’s stock option activity (as adjusted for the Reverse Stock Split) is as follows:

As of September 30, 2024, the intrinsic value and weighted-average remaining life of the Company's outstanding and exercisable stock options were zero and approximately 3.8 years, respectively. The maximum contractual term of the Company's exercisable stock options is approximatelyten years. As of September 30, 2024, there wereno unvested stock options andno unrecognized stock-based compensation expense related to unvested stock options.

Amendment to Second and Restated 2014 Omnibus Equity Award Plan and Interim CEO Equity Awards

As of September 30, 2024, prior to adoption by the Board of Directors (the "Board"), there were a total of 101,943 shares of common stock available for future award under the Company's Second Amended and Restated 2014 Omnibus Equity Award Plan ("Second A&R 2014 Plan"). On September 30, 2024, the Board adopted, subject to stockholder approval, an amendment to the Second A&R 2014 Plan to increase the number of shares of the Company's common stock, par value $0.001 per share, available for issuance thereunder to 1,300,000 (the “Plan Amendment”). The Plan Amendment was approved by holders of a majority in voting power on October 4, 2024, by written consent in lieu of a special meeting, to be effective as of October 29, 2024.

Subsequent to quarter end, on October 29, 2024, when the Plan Amendment became effective, the following awards which were previously awarded to the Company's Interim CEO subject to stockholder approval of the Plan Amendment to increase the number of shares of common stock available thereunder to satisfy the settlement of the grant ("Share Approval Condition") became effective: (i)95,322 of restricted stock unit awards ("RSU's"), which were awarded on October 11, 2023; (ii)100,000 option awards with a strike price of $25.00 (as retroactively adjusted for the Reverse Stock Split in 2024) and an expiration date of September 15, 2033, which were awarded on September 15, 2023; (iii)142,857 of RSUs, which were awarded on August 19, 2024; and (iv)100,000 option awards with a strike price of $4.22 and an expiration date of September 15, 2034, which were awarded on September 15, 2024.