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SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2019

A summary of the status of the Company’s nonvested restricted stock awards as of December 31, 2019, and changes during the year ended December 31, 2019, is presented below:

	Shares			Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2019		875,497		$	7.99
Granted		889,811		$	2.20
Vested		( 780,888	)	$	4.95
Forfeited		( 12,574	)	$	5.87
Nonvested at December 31, 2019		971,846		$	5.16

Schedule of PSU Activity

The Company granted the following PSUs in the first quarter of the respective years. A summary of PSU activity as of December 31, 2019, and changes during the year ended December 31, 2019, is presented below:

	PSUs			Weighted-Average Grant Date Fair Value
2017 PSUs granted		277,376		$	6.86
2018 PSUs granted		741,977		$	2.63
Forfeited		( 108,442	)	$	4.02
Outstanding at January 1, 2019		910,911		$	4.67
2019 PSUs granted ⁽¹⁾		1,103,537		$	2.40
2017 PSUs cancelled ⁽²⁾		( 247,868	)	$	6.76
Outstanding at December 31, 2019 ⁽³⁾		1,766,580		$	2.96

(1)	Includes 566,862 shares classified as a liability due to the potential cash component described above.

(2)	Based on the Company’s TSR relative to the NAREIT Retail Index for the three-year performance period ended December 31, 2019, none of the 2017 PSU were earned as of December 31, 2019.

( 3 )

None of the PSUs outstanding at December 31, 2019 were vested.

Schedule of Assumptions used in the Monte Carlo Simulation Pricing Models

The following table summarizes the assumptions used in the Monte Carlo simulation pricing model related to the PSUs:

	2019 PSUs			2018 PSUs
Grant date	February 11, 2019			February 12, 2018
Fair value per share on valuation date ⁽¹⁾	$	4.74		$	4.76
Risk-free interest rate ⁽²⁾		2.54	%		2.36	%
Expected share price volatility ⁽³⁾		60.99	%		42.02	%

(1)

The value of the PSU awards is estimated on the date of grant using a Monte Carlo Simulation model. The valuation consists of computing the fair value using CBL's simulated stock price as well as TSR over a three-year performance period. The award is modeled as a contingent claim in that the expected return on the underlying shares is risk-free and the rate of discounting the payoff of the award is also risk-free. The weighted-average fair value per share related to the 2019 PSUs classified as equity consists of 357,800 shares at a fair value of $ 2.45 per share (which relate to relative TSR) and 178,875 shares at a fair value of $ 2.29 per share (which relate to absolute TSR). The weighted-average fair value per share related to the 2018 PSUs classified as equity consists of 240,164 shares at a fair value of $ 3.13 per share (which relate to relative TSR) and 120,064 shares at a fair value of $ 1.63 per share (which relate to absolute TSR) .

(2)

The risk-free interest rate was based on the yield curve on zero-coupon U.S. Treasury securities in effect as of the valuation date, which is the respective grant date listed above.

(3)

The computation of expected volatility was based on a blend of the historical volatility of CBL's shares of common stock based on annualized daily total continuous returns over a three-year period and implied volatility data based on the trailing month average of daily implied volatilities implied by stock call option contracts that were both closest to the terms shown and closest to the money.