(a)

Incremental shares from the assumed exercise of INDUS stock options are not included in periods where the inclusion of such shares would be anti-dilutive. The incremental shares from the assumed exercise of stock options for the 2021 first quarter, 2020 first quarter and month ended December 31, 2019 would have been 95,000, 52,000, and 51,000, respectively. For the 2021 first quarter, there was a Warrant for the purchase of 515,747 shares of Common Stock, as adjusted for the stock dividend in the 2021 first quarter, that was anti-dilutive.

Equity Compensation Plans

Stock Options

Through March 3, 2020, stock options were granted by the Company under the INDUS Realty Trust, Inc. 2009 Stock Option Plan (as amended, the “2009 Stock Option Plan”). Options granted under the 2009 Stock Option Plan were either incentive stock options or non-qualified stock options issued at an exercise price not less than fair market value on the date approved by INDUS’s Compensation Committee. Vesting of all of the Company's stock options is solely based upon service requirements and does not contain market or performance conditions.

Stock options issued expire ten years from the grant date. In accordance with the 2009 Stock Option Plan, stock options issued to non-employee directors upon their initial election to the board of directors were fully exercisable immediately upon the date of the option grant. Stock options granted to non-employee directors upon their re-election to the board of directors vest on the second anniversary from the date of grant. Stock options granted to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at March 31, 2021 may be exercised as stock appreciation rights.

On March 3, 2020, INDUS’s Board of Directors adopted and approved the INDUS Realty Trust, Inc. and INDUS Realty, LLC 2020 Incentive Award Plan (the “2020 Incentive Award Plan”). The 2020 Incentive Award Plan was effective as of the date it was adopted by the Board, subject to stockholder approval, which was received at INDUS’s 2020 Annual Meeting of Stockholders on May 7, 2020. The 2020 Incentive Award Plan replaced the 2009 Stock Option Plan and authorizes for grant a total of 300,000 shares (plus any shares subject to awards under the 2009 Stock Option Plan, as of the date of stockholder approval of the 2020 Incentive Award Plan, that are forfeited, expire, are converted to shares of another person or are settled for cash), subject to certain adjustments in the 2020 Incentive Award Plan. In addition to granting stock options, the 2020 Incentive Award Plan also enables INDUS to grant stock appreciation rights, restricted stock awards, restricted stock unit awards, partnership interests, other equity or cash based awards and dividend equivalents. No new awards will be granted under the 2009 Stock Option Plan; however, all outstanding awards under the 2009 Stock Option Plan remain outstanding in accordance with their terms.

There were no options granted in the 2021 first quarter. The following options were granted by INDUS in the 2020 first quarter under the 2020 Incentive Award Plan and the 2009 Stock Option Plan:


	For the Three Months Ended
	Mar. 31, 2020
		Fair Value per
	Number of	Option at
	Shares	Grant Date
Non-employee directors	102,906	$	12.29 - 14.17


Number of option holders at March 31, 2021		28

For all periods presented, the forfeiture rate for directors ranged from 0% to 2%, the forfeiture rate for executives was 17.9% and the forfeiture rate for employees was 38.3%. The rates utilized were based on the historical activity of the grantees.

As of March 31, 2021, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:


Balance of Fiscal 2021	$	343
Fiscal 2022	$	374
Fiscal 2023	$	231
Fiscal 2024	$	111
Fiscal 2025	$	15

A summary of INDUS’s stock option activity is as follows:


	For the Three Months Ended
	Mar. 31, 2021			Mar. 31, 2020
	Number of		Weighted Avg.	Number of		Weighted Avg.
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of period	246,150	$	36.06	189,822	$	28.23
Adjustment for stock dividend	5,413	$	34.29	—	$	—
Granted	—	$	—	102,906	$	46.32
Exercised	(233)	$	26.31	—	$	—
Outstanding at end of period	251,330	$	35.28	292,728	$	34.59


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Outstanding Options	March 31, 2021	Exercise Price		(in years)	Value
$23.00 - $28.00	111,313	$	26.25	4.9	$	3,775
$28.00 - $32.00	14,073	$	29.84	4.3		427
$32.00 - $47.00	125,944	$	43.88	8.7		2,050
	251,330	$	35.28	6.8	$	6,252

Vested options	101,941	$	27.88	5.0	$	3,291

Restricted Stock Units

Under the 2020 Incentive Award Plan, in the 2021 first quarter, INDUS granted 17,016 restricted stock units of Common Stock (“RSUs”) to certain employees. The grant date fair value of 8,508 RSUs related to a time-based vesting schedule was $63.15 and the grant date fair value of 8,508 RSUs related to Company performance was $80.03, for a weighted average grant date fair value of $71.59.

The time-based RSUs granted effective February 1, 2021, subject to the recipient’s continued employment, will vest over three years in equal installments on February 1 of each year beginning in 2022. The performance based RSUs granted in fiscal 2021 will vest after a period of three years and be measured over the three-year period on pre-

established goals. The holders of RSUs will receive credit for dividends, but do not have voting rights. The RSUs may not be sold, assigned, transferred, pledged or otherwise disposed of and are subject to a risk of forfeiture prior to the expiration of the applicable vesting period.

As of March 31, 2021, the unrecognized compensation expense related to RSUs that will be recognized during future periods is as follows:


Balance of Fiscal 2021	$	403
Fiscal 2022	$	379
Fiscal 2023	$	285
Fiscal 2024	$	23

Compensation expense and related tax benefits for stock options and restricted stock units were as follows:


	For the Three Months Ended				For the Month Ended
	Mar. 31, 2021		Mar. 31, 2020		Dec. 31, 2020		Dec. 31, 2019
Compensation expense	$	214	$	122	$	41	$	19

Related tax benefit	$	—	$	28	$	—	$	4

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive loss, net of tax, comprised of unrealized gains on cash flow hedges is as follows:


	For the Three Months Ended				For the Month Ended
	Mar. 31, 2021			Mar. 31, 2020	Dec. 31, 2020		Dec. 31, 2019
Balance at beginning of period	$	(7,855)	$	(2,540)	$	(8,051)	$	(3,141)
Other comprehensive gain (loss) before reclassifications		2,991		(4,964)		14		568
Amounts reclassified		488		103		182		33
Net activity for other comprehensive gain (loss)		3,479		(4,861)		196		601
Balance at end of period	$	(4,376)	$	(7,401)	$	(7,855)	$	(2,540)

Changes in accumulated other comprehensive income (loss), net are as follows:


	For the Three Months Ended
	Mar. 31, 2021						Mar. 31, 2020
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassification included in net loss:
Loss on cash flow hedges (interest expense)	$	488	$	—	$	488	$	135	$	(32)	$	103

Change in other comprehensive income (loss):
Increase (decrease) in fair value of cash flow hedges		2,991		—		2,991		(6,602)		1,638		(4,964)

Other comprehensive income (loss)	$	3,479	$	—	$	3,479	$	(6,467)	$	1,606	$	(4,861)


	For the Month Ended
	Dec. 31, 2020						Dec. 31, 2019
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassification included in net income (loss):
Loss on cash flow hedges (interest expense)	$	182	$	—	$	182	$	43	$	(10)	$	33

Change in other comprehensive income (loss):
Increase (decrease) in fair value of cash flow hedges		14		—		14		739		(171)		568

Other comprehensive income (loss)	$	196	$	—	$	196	$	782	$	(181)	$	601

Special Dividend

On January 13, 2021, INDUS declared a dividend to distribute the E&P Distribution, which was based on the Company’s estimated taxable income through December 1, 2020. The E&P Distribution was made on March 8, 2021 in the amount of $11,250 or $1.99 per share to holders of record as of January 22, 2021. The E&P Distribution was a special dividend paid in a combination of cash and shares of the Company’s Common Stock. The cash portion of the E&P Distribution paid to stockholders was $3,404 and 125,212 shares of Common Stock were issued.