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Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

A summary of the status of the Successor Company’s nonvested restricted stock awards as of December 31, 2021, and changes during the period from November 1, 2021 through December 31, 2021, are presented below:

Weighted-

Average

Grant-Date

Fair Value Per Share

Granted

784,999

27.57

Nonvested at December 31, 2021

784,999

27.57

Under the 2012 Plan, common stock could be awarded either alone, in addition to, or in tandem with other granted stock awards. The Committee had the authority to determine eligible persons to whom common stock will be awarded, the number of shares to be awarded and the duration of the vesting period, as defined. Generally, an award of common stock vested either immediately at grant or in equal installments over a period of five years. Stock awarded to independent directors was fully vested upon grant; however, the independent directors could not transfer such shares during their board term. The Committee could also provide for the issuance of common stock under the 2012 Plan on a deferred basis pursuant to deferred compensation arrangements. The fair value of common stock awarded under the 2012 Plan was determined based on the market price of CBL’s common stock on the grant date and the related compensation expense was recognized over the vesting period on a straight-line basis.

As of the Effective Date and pursuant to the Plan, nonvested restricted stock of the Predecessor Company was deemed vested and the Company’s 2012 Stock Incentive Plan, as amended (the “2012 Plan”), pursuant to which such restricted stock had been granted, was terminated. A summary of the Predecessor Company’s restricted stock awards as of October 31, 2021, and changes during the period from January 1, 2021 through October 31, 2021, are presented below:

	Shares			Weighted- Average Grant-Date Fair Value Per Share
Nonvested at January 1, 2021		1,519,774		$	2.15
Vested		(1,490,751	)	$	2.14
Forfeited		(29,023	)	$	2.73
Nonvested at October 31, 2021		—		$	—

Schedule of PSU Activity

The Predecessor Company granted the following PSUs in the first quarter of the respective years. A summary of PSU activity as of October 31, 2021, and changes during the period from January 1, 2021 through October 31, 2021, is presented below:

	PSUs			Weighted-Average Grant Date Fair Value
2019 PSUs granted ⁽¹⁾		1,103,537		$	2.40
2020 PSUs granted ⁽²⁾		3,408,083		$	0.84
2020 PSUs cancelled ⁽³⁾		(3,408,083	)	$	0.84
Outstanding at January 1, 2021		1,103,537		$	2.40
2019 PSUs cancelled ⁽⁴⁾		(1,103,537	)	$	2.40
Outstanding at October 31, 2021		—		$	—

(1)

Includes 566,862 shares classified as a liability due to the potential cash component.

(2)

Includes 1,247,098 shares classified as a liability due to the potential cash component.

(3)

In connection with the restructuring and support agreement, dated as of August 18, 2020, by and between the Predecessor Company and the Consenting Noteholders, the 2020 PSUs were cancelled.

(4)

As of the Effective Date and pursuant to the Plan, all outstanding PSUs of the Predecessor Company were deemed cancelled.

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 Predecessor Company’s PSUs:

	2020 PSUs			2019 PSUs
Grant date	February 10, 2020			February 11, 2019
Fair value per share on valuation date ⁽¹⁾	$	0.84		$	4.74
Risk-free interest rate ⁽²⁾		1.39	%		2.54	%
Expected share price volatility ⁽³⁾		57.98	%		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 2020 PSUs classified as equity consists of 2,131,245 shares at a fair value of $0.88 (which relate to relative TSR) and 1,065,463 shares at fair value of $0.75 per share (which relate to absolute TSR). 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).

(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 five-year period for the 2020 PSUs and 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.