In May 2017, NNN filed a registration statement on Form S-8 with the Commission which permits the issuance of up to 1,800,000 shares of common stock pursuant to NNN’s 2017 Performance Incentive Plan (the “2017 Plan”). The 2017 Plan allows NNN to award or grant to key employees, directors and persons performing consulting or advisory services for NNN or its affiliates, stock options, stock awards, stock appreciation rights, Phantom Stock Awards, Performance Awards and Leveraged Stock Purchase Awards, 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, 2022:


	Number of Shares			Weighted Average Share Price
Non-vested restricted shares, January 1		978,455		$	49.54
Restricted shares granted		410,403			42.93
Restricted shares vested		(219,805	)		49.56
Restricted shares forfeited		(177,852	)		53.64
Non-vested restricted shares, December 31		991,201			46.06

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, 2022, NNN granted 289,434 performance-based 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 shares was determined using a Monte Carlo simulation model at the grant date (for a weighted average fair value share price of $29.76). The performance-based shares were granted to certain executive officers and had a weighted average grant price of $42.85 per share. Once the respective performance criteria are met and the actual 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, 2022, pursuant to the 2017 Plan.


	Number of Shares		Weighted Average Share Price
Other share grants under the 2017 Plan:
Directors’ fees		12,903	$	44.46
Deferred directors’ fees		20,100		44.46
		33,003		44.46
Shares available under the 2017 Plan for grant, end of period		346,420

The total compensation expense for share-based payments for the years ended December 31, 2022, 2021 and 2020 totaled $15,449,000, $14,296,000 and $14,213,000, respectively. At December 31, 2022, NNN had $11,266,000 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 2.4 years.

In April 2022, the former President and Chief Executive Officer retired from employment, as contemplated under the Company's long-term executive succession planning process and as previously announced in January 2022. At the date of announcement, and as a result of the retirement and transition agreement, the terms of the performance awards were modified to shorten the requisite service period to the April 2022 retirement date. In accordance with ASC 718, a valuation of the modified performance awards resulted in incremental executive retirement costs of $1,379,000 for the year ended December 31, 2022.