In August 2023, NNN filed a registration statement on Form S-8 with the Commission which amended NNN's 2017 Performance Incentive Plan to increase the maximum aggregate share issuance from 1,800,000 to 4,800,000 shares of common stock and certain other limits under the plan (the plan as amended, the "2017 Plan"). The 2017 Plan allows NNN to award or grant to key associates, directors and persons performing consulting or advisory services for NNN or its affiliates, stock options, phantom stock awards, Stock Awards, Restricted Stock Awards, Stock Appreciation Rights and Performance Shares, each as defined in the 2017 Plan.

Pursuant to the 2017 Plan, NNN has granted and issued shares of restricted stock to certain officers and key associates of NNN. The following summarizes the restricted stock activity for the year ended December 31, 2025:


	Number of Shares			Weighted Average Share Price
Non-vested restricted shares, January 1		1,083,580		$	42.86
Restricted shares granted		520,516			40.82
Restricted shares vested		(393,852	)		43.16
Restricted shares forfeited		(124,142	)		41.47
Non-vested restricted shares, December 31		1,086,102			41.93

Compensation expense for the restricted stock which is not contingent upon NNN's performance goals is determined based upon the fair value at the date of grant and is recognized as the greater of the amount amortized over a straight-lined basis or the amount vested over the vesting periods. Vesting periods for officers and key associates of NNN range from three to five years and generally vest annually. NNN recognizes compensation expense on a straight-line basis for awards with only service conditions.

During the year ended December 31, 2025, NNN granted 290,005 Performance Shares subject to its total stockholder return after a three-year period relative to its peers. In accordance with FASB ASC Topic 718, Compensation - Stock Compensation ("ASC 718"), the fair value of these market-based Performance Shares was determined using a Monte Carlo simulation model at the grant date (for a weighted average fair value share price of $27.95). The Performance Shares were granted to certain executive officers and had a weighted average grant price of $39.37 per share. Once the respective performance criteria are met and the number of shares earned is determined, the shares vest immediately. Compensation expense is recognized over the requisite service period.

The following summarizes other grants made during the year ended December 31, 2025, pursuant to the 2017 Plan.


	Number of Shares		Weighted Average Share Price
Other share grants under the 2017 Plan:
Directors’ fees		7,076	$	40.98
Deferred directors’ fees		28,164		40.99
		35,240		40.98
Shares available under the 2017 Plan for grant, end of period		4,142,910

The total compensation expense for share-based payments for the years ended December 31, 2025, 2024 and 2023 totaled $14,202,000, $11,816,000 and $12,228,000, respectively. At December 31, 2025, NNN had $13,849,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements under the 2017 Plan. This cost is expected to be recognized over a weighted average period of 1.94 years.