Equity Incentive Plans |
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| Equity Incentive Plans | Equity Incentive Plans The Company grants equity-based awards to employees and non-employee directors for the purpose of attracting and retaining the services of its executive officers, key employees, and members of the Board. The Company's Board of Directors approved the further amendment and restatement of the Hercules Capital, Inc. Amended and Restated 2018 Equity Incentive Plan on April 2, 2026 and renamed it the Hercules Capital, Inc. Amended and Restated 2026 Equity Incentive Plan (the “2026 Plan”). The Company’s stockholders approved the 2026 Plan on June 18, 2026 at the Company’s 2026 Annual Meeting of Stockholders (the “2026 Annual Meeting”), with the 2026 Plan becoming effective on June 18, 2026. The 2026 Plan, among other things, increases the number of shares available for issuance to eligible participants by 14,000,000 shares. Unless sooner terminated by the Board, the 2026 Plan will terminate on the day before the tenth anniversary of its adoption by the Board on April 2, 2026.
The Company's Board of Directors also approved the amendment and restatement of the 2018 Non-Employee Director Plan on April 2, 2026 and renamed it the Hercules Capital, Inc. Amended and Restated 2026 Non-Employee Director Plan (the “Director Plan”). The Company’s stockholders approved the Director Plan at the 2026 Annual Meeting, with the plan becoming effective June 18, 2026. Unless sooner terminated by the Board, the Director Plan will terminate on the day before the tenth anniversary of its adoption by the Board on April 2, 2026.
The Company’s equity-based awards are granted under the 2026 Plan for employees and the Director Plan for non-employee directors. Subject to certain adjustments and permitted reversions of shares, the maximum aggregate number of shares authorized for issuance under the 2026 Plan and Director Plan is 16,303,840 shares and 300,000 shares, respectively. For additional information regarding the 2026 Plan and the Director Plan, please refer to the Company’s definitive proxy statement filed with the SEC on April 23, 2026.
The Company has received exemptive relief from the SEC that permits it to issue restricted stock to non-employee directors under the Director Plan and restricted stock and restricted stock units to certain of its employees, officers, and directors (excluding non-employee directors) under the 2026 Plan. The exemptive order also allows participants in the Director Plan and the 2026 Plan to (i) elect to have the Company withhold shares of its common stock to pay for the exercise price and applicable taxes with respect to an option exercise (“net issuance exercise”) and/or (ii) permit the holders of restricted stock to elect to have the Company withhold shares of its stock to pay the applicable taxes due on restricted stock at the time of vesting. Each individual employee would be able to make a cash payment to satisfy applicable tax withholding at the time of option exercise or vesting on restricted stock.
All of the Company’s equity-based awards require future service, and are expensed over the relevant service period. The Company does not estimate forfeitures, and reverses all unvested costs associated with equity-awards in the period they are forfeited. For the three months ended June 30, 2026 and 2025, the Company recognized $3.9 million and $3.7 million of stock-based compensation expense in the Consolidated Statements of Operations, respectively. For the six months ended June 30, 2026 and 2025, the Company recognized $8.1 million and $7.3 million of stock-based compensation expense in the Consolidated Statements of Operations, respectively. As of June 30, 2026 and June 30, 2025, approximately $29.7 million and $26.5 million of total unrecognized compensation costs are expected to be recognized over the next 2.6 and 2.5 years, respectively.
Service Vesting Awards
The Company grants equity-based awards which have service conditions, which generally begin to vest one-third after one year after the date of grant and ratably over the succeeding two years in accordance with the individual award terms. Certain awards have service conditions of longer duration and may begin to vest up to seven years after the date of grant. These equity-based awards which vest upon achievement of service conditions are collectively referred to as the “Service Vesting Awards”. The grant date fair value of Service Vesting Awards granted during the six months ended June 30, 2026 and 2025, were approximately $18.8 million, and $15.9 million, respectively.
The Company has granted restricted stock equity awards in the form of restricted stock awards and restricted stock units. The Company determines the grant date fair values of restricted stock equity awards using the grant date stock close price. The activities for the Company's unvested restricted stock equity awards for each of the six months ended June 30, 2026 and 2025, are summarized below:
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