On November 10, 2021, the board of directors of the Company adopted the CBL & Associates Properties, Inc. 2021 Equity Incentive Plan (the “EIP”). The EIP authorizes the grant of equity awards to eligible participants based on the new common stock, in the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other equity awards. Awards under the EIP may be granted to officers, employees, directors, consultants and independent contractors of the reorganized company. Initially, 3,222,222 shares of new common stock were available under the EIP. The initial amount of new common stock authorized for awards under the EIP is subject to an annual increase of a number of shares equal to 3% of the number of shares of new common stock issued and outstanding at the end of the relevant calendar year (beginning January 2023), or such lesser amount as the board of directors may determine. Pursuant to this provision, the board of directors approved an increase of 953,403 shares in January 2023 and determined that no additional shares would be added in January 2024 and January 2025. As of December 31, 2024, there were 2,829,138 shares available under the EIP. The Plan is administered by the compensation committee of the board of directors, which determines the participants who will be granted awards under the EIP and the terms and conditions of EIP awards.

In accordance with the provisions of ASU 2016-09, which are designed to simplify the accounting for share-based payments transactions, the Company accounts for forfeitures of share-based payments as they occur rather than estimating them in advance.

Restricted stock awards granted to the Company’s executive officers vest annually over a three-year or four-year period as defined in the award. Restricted stock awards granted to the Company’s non-executive officers vest annually over a three-year period. Restricted stock awards granted to the Company’s non-employee directors vest over a one-year period, with restrictions expiring each January. The grantee generally has all the rights of a stockholder during the vesting/restricted period, including the right to receive dividends on the same basis and at the same rate as all other outstanding shares of common stock and the right to vote such shares on any matter on which holders of the Company’s common stock are entitled to vote. The shares generally are not transferable during the restricted period, except for any transfers which may be required by law.

A summary of the status of the Company’s nonvested restricted stock awards as of December 31, 2024, and changes during the year ended December 31, 2024, is presented below:


	Shares			Weighted- Average Grant-Date Fair Value Per Share
Unvested at January 1, 2024		590,953		$	27.02
Granted		169,454		$	24.48
Vested		(269,543	)	$	27.13
Unvested at December 31, 2024		490,864		$	26.08

Compensation expense is recognized on a straight-line basis over the requisite service period. The share-based compensation cost related to restricted stock awards was $8,305, $7,343 and $7,400 for the years ended December 31, 2024, 2023 and 2022, respectively. Share-based compensation cost capitalized as part of real estate assets was $133 for the year ended December 31, 2024. Share-based compensation cost resulting from share-based awards is recorded at the Management Company, which is a taxable entity.

The total grant-date fair value of restricted stock awards granted during the years ended December 31, 2024, 2023 and 2022 was $4,148, $10,086 and $3,095, respectively. The total fair value of restricted stock awards that vested during the years ended December 31, 2024, 2023 and 2022 was $7,720, $11,090 and $5,306, respectively.

As of December 31, 2024, there was $9,287 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the EIP, which is expected to be recognized over a weighted-average period of 1.3 years.

In February 2022, the compensation committee approved the terms of new awards of PSUs. The PSUs are earned over a four-year performance period aligned with fiscal years 2022 (includes the period from November 1, 2021 through December 31, 2021) through 2025, with one-quarter of the PSUs assigned to each fiscal year within the four-year performance period. The number of PSUs earned for each fiscal year within the four-year performance period will be determined based on the achievement of both (i) a quantitative total market return goal and (ii) a Company-specific stated goal, for such fiscal year.

In February 2023, the compensation committee established a long-term incentive program (“LTIP”) under the EIP. The 2023 LTIP awards approved by the compensation committee consist of both a PSU component (55% - 60% of the LTIP award) and a restricted stock award component (40% - 45% of the LTIP award). The amount of common stock that may be issued for the PSU component upon the conclusion of the applicable three-year performance period will be determined by two measures: (i) a portion (40%) of the number of shares issued will be determined based on the Company’s achievement of specified levels of long-term relative total stockholder return (“TSR”) performance (stock price appreciation plus aggregate dividends) versus the Retail Sector Component (excluding companies comprising the Free-Standing Subsector) of the FTSE NAREIT All Equity REIT Index, provided that at least a “Threshold” level must be attained for any shares to be received, and (ii) a portion (60%) of such number of shares issued will be determined based on the Company’s absolute TSR performance over such period, provided again that at least a “Threshold” level must be attained for any shares to be received. The restricted stock award component consists of time-vesting restricted stock, of which a third of the award vests annually over the three-year performance period. The 2024 LTIP awards approved by the compensation committee consist of both a PSU component (60% - 70% of the LTIP award) and a restricted stock award component (30% - 40% of the LTIP award). The amount of common stock that may be issued for the PSU component upon the conclusion of the applicable three-year performance period will be determined by two measures: (i) a portion (30%) of the number of shares issued will be determined based on the Company’s achievement of specified levels of long-term relative TSR performance (stock price appreciation plus aggregate dividends) versus the Retail Sector Component (excluding companies comprising the Free-Standing Subsector) of the FTSE NAREIT All Equity REIT Index, provided that at least a “Threshold” level must be attained for any shares to be received, and (ii) a portion (70%) of such number of shares issued will be determined based on the

Company’s absolute TSR performance over such period, provided again that at least a “Threshold” level must be attained for any shares to be received. The restricted stock award component consists of time-vesting restricted stock, of which a third of the award vests annually over the three-year performance period.

Compensation cost for the PSUs granted in February 2023 and February 2024 is recognized on a straight-line basis over the service period since it is longer than the performance period. The resulting expense is recorded regardless of whether any PSU awards are earned as long as the required service period is met. For the PSUs granted in February 2022, each quarter, management assesses the probability that the measures associated with the Company's outstanding PSU awards will be attained. The Company begins recognizing compensation expense on a straight-line basis over the remaining service period once the PSU award measures are deemed probable of achievement. Share-based compensation expense related to the 2022, 2023 and 2024 PSUs granted under the EIP was $6,490, $5,639 and 4,485 for the years ended December 31, 2024, 2023 and 2022, respectively. The unrecognized compensation expense related to the 2022, 2023 and 2024 PSUs was $10,434 as of December 31, 2024, which is expected to be recognized over a weighted-average period of 1.9 years.

A summary of the status of the Company’s outstanding PSU awards as of December 31, 2024, and changes during the year ended December 31, 2024, are presented below:


	PSUs			Weighted- Average Grant-Date Fair Value Per Share
Outstanding at January 1, 2024		563,581		$	28.65
2024 PSUs granted		169,420		$	24.30
Incremental PSUs granted (1)		49,248		$	24.58
Vested		(210,962	)	$	24.67
Outstanding at December 31, 2024		571,287		$	28.48

(1)

PSUs granted shall be adjusted as if the shares of common stock represented by such PSUs had received any applicable stock or cash dividends declared. As for stock dividends, a number of PSUs shall be added to the target amount corresponding to the number of shares of common stock that would have been payable per such stock dividend on the then outstanding number of PSUs under the agreement as if common stock had been issued for such PSUs. As to cash dividends, a number of PSUs shall be added to the target amount corresponding to the number of shares of common stock that could have been acquired by the cash dividend payable on the then outstanding number of PSUs under the agreement as if common stock had been issued for such PSUs, and the calculation of the number of shares of common stock that could have been acquired shall be based on the closing price of the common stock on the record date for the cash dividend at issue.

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


	2024 PSUs			2023 PSUs			2022 PSUs
Grant date	February 7, 2024			February 17, 2023			February 16, 2022
Fair value per share on valuation date (1)	$	24.30		$	38.79		$	24.67
Risk-free interest rate (2)		4.19	%		4.37	%		1.85	%
Expected share price volatility (3)		40.00	%		62.50	%		65.00	%

(1)

The value of the PSU awards are estimated on the date of grant using a Monte Carlo simulation model. For the 2023 and 2024 PSUs, 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 2024 PSUs consists of 50,825 PSUs at a fair value of $29.38 per share (which relates to the relative TSR) and 118,595 PSUs at a fair value of $22.12 per share (which relates to absolute TSR). The weighted-average fair value per share related to the 2023 PSUs consists of 63,114 shares at a fair value of $40.64 per share (which relates to the relative TSR) and 94,675 shares at a fair value of $37.55 per share (which relates to absolute TSR). For the 2022 PSUs, the valuation consists of computing the fair value using CBL's simulated stock price as well as TMR for each 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.

(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 grant date listed above.

(3)

For the 2024 PSUs, the computation of expected volatility was based on the historical volatility of CBL's shares of common stock for a trading period equal to the time from the grant date to the end of the performance period. Since the performance period exceeds CBL's trading history, volatility indications of comparable public companies were also considered. For the 2023 PSUs, the computation of expected volatility was based on 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. For the 2022 PSUs, the computation of expected volatility was based on the historical volatility of the share prices of comparable, publicly traded companies and given the Company's risk profile and leverage relative to the comparable, publicly traded companies. The Company's historical volatility was not relied upon given the Company's limited trading history since its emergence from bankruptcy on November 1, 2021.