As of March 31, 2021, the Company has outstanding awards under the CBL & Associates Properties, Inc. 2012 Stock Incentive Plan (the “2012 Plan"), which was approved by the Company's shareholders in May 2012. The 2012 Plan permits the Company to issue stock options and common stock to selected officers, employees and non-employee directors of the Company up to a total of 10,400,000 shares. As the primary operating subsidiary of the Company, the Operating Partnership participates in and bears the compensation expense associated with the Company's share-based compensation plan. The Compensation Committee of the Board of Directors (the “Committee”) administers the 2021 Plan.

Share-based compensation expense related to the restricted stock awards was $297 and $1,144 for the three months ended March 31, 2021 and 2020, respectively. Share-based compensation cost capitalized as part of real estate assets was $4 and $7 for the three months ended March 31, 2021 and 2020, respectively.

A summary of the status of the Company’s nonvested restricted stock awards as of March 31, 2021, and changes during the three months ended March 31, 2021, is presented below:

	Shares			Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2021		1,519,606		$	2.15
Vested		(480,463	)	$	3.11
Forfeited		(1,518	)	$	4.41
Nonvested at March 31, 2021		1,037,625		$	1.71

As of March 31, 2021, there was $1,634 of total unrecognized compensation cost related to nonvested stock awards granted under the plans, which is expected to be recognized over a weighted-average period of 2.0 years.

A summary of the Company’s long-term incentive program (“LTIP”) is disclosed in Note 18 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020.

Under the LTIP, annual restricted stock awards consist of shares of time-vested restricted stock awarded based on a qualitative evaluation of the performance of the Company and the named executive officer during the fiscal year. Annual restricted stock awards under the LTIP, which are included in the totals reflected in the preceding table, vest 20% on the date of grant with the remainder vesting in four equal annual installments. Outstanding restricted stock, and related grant/vesting/forfeiture activity during 2021 for awards made to named executive officers under the LTIP, is included in the information presented in the table above.

There were no PSUs granted in the first quarter of 2021. The outstanding PSUs at March 31, 2021 was 1,103,537, which solely relates to the PSUs granted in the first quarter of 2019. Of that amount, 566,862 shares are classified as a liability due to the potential cash component, which is described in the summary of the Company’s LTIP program set forth in Note 18 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020. None of the PSUs outstanding at March 31, 2021 were vested.

Shares earned pursuant to the PSU awards vest 60% at the conclusion of the performance period while the remaining 40% of the PSU award vests 20% on each of the first two anniversaries thereafter.

Compensation cost is recognized on a tranche-by-tranche basis using the accelerated attribution method. The resulting expense, for awards classified as equity, is recorded regardless of whether any PSU awards are earned as long as the required service period is met.

Share-based compensation expense related to the PSUs was $94 and $478 for the three months ended March 31, 2021 and 2020. Unrecognized compensation costs related to the PSUs was $453 as of March 31, 2021, which is expected to be recognized over a weighted-average period of 1.6 years.

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

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

(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).

(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 for the 2019 PSUs 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.