(a)

Incremental shares from the assumed exercise of INDUS stock options and the Warrant and the grant of restricted stock units 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 and the Warrant for 2020 would have been 68,000.

Equity Compensation Plans

Stock Options

On March 3, 2020, INDUS’ 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 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 stock options granted in 2021. The following options were granted by INDUS in 2020 under the 2020 Incentive Award Plan:


		Fair Value per
	Number of	Option at
	Shares	Grant Date
Non-employee directors	111,258	$	11.00 - 14.17

The fair values of all options granted were estimated as of the grant date using the Black-Scholes option-pricing model. Assumptions used in determining the fair value of the stock options granted in 2020 were as follows:


Expected volatility	29.7 - 30.3	%
Risk free interest rates	0.5 - 0.9	%
Expected option term (in years)	8.5
Annual dividend yield	1.3	%

The forfeiture rate used was 2% based on the historical activity of the grantees.


Number of option holders at December 31, 2021		14

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


2022	$	372
2023	$	231
2024	$	111
2025	$	15

The total grant date fair value of options vested during 2021 and 2020 was $428 and $458, respectively. The intrinsic value of options exercised in 2021 and 2020 was $746 and $1,216, respectively. There were no options vested or exercised in the Transition Period.

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


		Weighted Avg.
	Options	Exercise Price
Outstanding at December 31, 2019	189,822	$	28.23
Granted	111,258	$	45.72
Exercised	(54,930)	$	28.58
Outstanding at December 31, 2020	246,150	$	36.06
Adjustment for stock dividend	5,413	$	34.29
Exercised	(29,559)	$	26.34
Forfeited	(1,067)	$	37.49
Outstanding at December 31, 2021	220,937	$	36.47


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Outstanding Options	December 31, 2021	Exercise Price		(in years)	Value
$23.00 - $28.00	81,987	$	26.23	4.2	$	4,496
$28.00 - $32.00	14,073	$	29.84	3.5		721
$32.00 - $47.00	124,877	$	43.93	8.0		4,636
	220,937	$	36.47	6.3	$	9,853

Vested options	111,258	$	28.13	4.4	$	5,889

Restricted Stock Units

Under the 2020 Incentive Award Plan, INDUS granted the following RSUs in 2021:


	Time-Based Vesting			Performance-Based Vesting
		Fair Value per			Fair Value per
	Number of	Unit at		Number of	Unit at
	Units	Grant Date		Shares	Grant Date
Employees	8,508	$	63.15	8,508	$	79.33
Non-employee directors	4,682	$	67.28	-
	13,190			8,508

The time-based vesting RSUs were granted to employees on February 1, 2021 and, 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 vesting RSUs granted in 2021 will vest after a period of three years and be measured over the three-year period on pre-established goals. The time-based vesting RSUs granted to non-employee directors were granted on June 17, 2021 and will vest in one year. 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 risk of forfeiture prior to the expiration of the applicable vesting period.

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


2022	$	503
2023	$	270
2024	$	22

Compensation expense for stock options and RSUs were as follows:


					Month Ended
	Year Ended December 31,				December 31,
	2021		2020		2020
Compensation expense	$	1,110	$	532	$	41

Warrant

As of December 31, 2021, exercise of the Warrant would result in the issuance 515,747 shares of Common Stock at a price of $58.70 per share. The Warrant expires on August 24, 2023. As the Warrant contained a cash surrender provision, it was recorded at its fair value and classified as a liability on the Company’s consolidated balance sheet at the time it was issued, with changes in its fair value included in the Company’s consolidated statement of operations. On August 24, 2021, upon the expiration of the cash settlement provision of the Warrant, the fair value of the Warrant at that time, $12,192, was reclassified from a liability into stockholders’ equity (see Note 3).

Dividends

On January 13, 2021, in conjunction with its conversion to a REIT, INDUS announced a special dividend of $11,250 or $1.99 per share payable on March 8, 2021 in the form of cash or additional shares of the Company’s Common Stock, to holders of record as of January 22, 2021. The cash portion of the special dividend $3,404 and 125,212 shares of Common Stock were issued. The special dividend included the E&P Distribution based on the Company’s estimated taxable income through December 31, 2020.

For the year ended December 31, 2021, the Company’s common dividends are as follows:


Quarter Ended	Record Date	Payment Date	Common dividend per share
June 30, 2021	June 16, 2021	June 30, 2021	$0.15

September 30, 2021	September 16, 2021	September 30, 2021	$0.15

December 31, 2021	December 30, 2021	January 14, 2022	$0.16

INDUS did not declare or pay a cash dividend in 2020.

Treasury Stock

The Company’s 617,816 shares of treasury stock were retired upon the reincorporation into Maryland on December 30, 2020. The treasury stock balance was offset by reductions to common stock and additional paid-in capital. Total stockholders’ equity was not affected by the retirement of treasury stock (see Note 10).

Stock Repurchases

See Supplemental Cash Flow Information in Note 10 for information on Common Stock received in connection with the exercise of stock options.