Compensation expense is recognized on a straight-line basis over the requisite service period. The share-based compensation expense related to restricted stock awards granted under the CBL & Associates Properties, Inc. 2021 Equity Incentive Plan ("EIP") was $2,276 and $4,402 for the three and six months ended June 30, 2025, respectively. The share-based compensation expense related to restricted stock awards was $2,089 and $4,077 for the three and six months ended June 30, 2024, respectively. Share-based compensation cost capitalized as part of real estate assets was $32 and $62 for the three and six months ended June 30, 2025, respectively. Share-based compensation cost capitalized as part of real estate assets was $35 and $59 for the three and six months ended June 30, 2024, respectively. As of June 30, 2025, there was $8,909 of total unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over a weighted-average period of 1.6 years. Share-based compensation cost resulting from share-based awards is recorded at the Management Company, which is a taxable entity.

A summary of the status of the Company’s unvested restricted stock awards as of June 30, 2025, and changes during the six months ended June 30, 2025, are presented below:


	Shares			Weighted- Average Grant-Date Fair Value Per Share
Unvested at January 1, 2025		490,864		$	26.08
Granted		132,466		$	30.85
Vested		(143,680	)	$	25.00
Unvested at June 30, 2025		479,650		$	27.72

The total grant-date fair value of restricted stock awards granted during the six months ended June 30, 2025 was $4,087. The total fair value of restricted stock awards that vested during the six months ended June 30, 2025 was $4,495.

Compensation cost for the PSUs granted in February 2023, February 2024 and February 2025 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 PSUs granted under the EIP was $1,981 and $3,815 for the three and six months ended June 30, 2025, respectively; and $1,441 and $3,108 for the three and six months ended June 30, 2024, respectively. The unrecognized compensation expense related to the PSUs was $11,254 as of June 30, 2025, which is expected to be recognized over a weighted-average period of 2.3 years.

A summary of the status of the Company’s outstanding PSU awards as of June 30, 2025, and changes during the six months ended June 30, 2025, are presented below:


	PSUs		Weighted- Average Grant-Date Fair Value Per Share
Outstanding at January 1, 2025		571,287	$	28.48
2025 PSUs granted		130,312	$	35.57
Incremental PSUs granted (1)		43,776	$	25.93
Outstanding at June 30, 2025		745,375	$	29.57

(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. 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. For 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 total grant-date fair value of PSU awards granted during the six months ended June 30, 2025 was $4,635.

The following table summarizes the assumptions used in the Monte Carlo simulation pricing model related to the PSUs granted in 2025:


	2025 PSUs
Grant date	February 12, 2025
Fair value per share on valuation date (1)	$	35.57
Risk-free interest rate (2)		4.40	%
Expected share price volatility (3)		32.00	%

(1)

The value of the 2025 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 pay off of the award is also risk-free. The weighted-average fair value per share related to the 2025 PSUs consists of 39,094 PSUs at a fair value of $42.50 per share (which relates to the relative TSR) and 91,218 PSUs at a fair value of $32.60 per share (which relates 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 grant date listed above.

(3)

The computation of expected volatility for the 2025 PSUs 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.