During the second quarter of 2022, we amended the 2019 Equity Incentive Plan (the "Equity Incentive Plan"), which authorizes the issuance of common stock options, restricted stock, restricted stock units, deferred stock units, stock appreciation rights, performance units, and awards of interests in our Operating Partnership. Our Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors ("Board"), and we have reserved 28.9 million shares of common stock for awards, of which 8.8 million shares remain available for future stock awards as of December 31, 2023. The Equity Incentive Plan contains a limit of 5 million shares as the maximum number of shares of common stock that may be awarded to an individual in any fiscal year. Awards under the Equity Incentive Plan are subject to forfeiture due to termination of employment prior to vesting and/or from not achieving the respective performance/market conditions. In the event of a change in control, outstanding and unvested options will immediately vest, unless otherwise provided in the participant’s award or employment agreement, and restricted stock, restricted stock units, deferred stock units, and other stock-based awards will vest if so provided in the participant’s award agreement. The term of the awards is set by the Compensation Committee, though Incentive Stock Options may not have terms of more than ten years. Forfeited awards (along with shares withheld for payroll tax withholding purposes) are returned to the Equity Incentive Plan and are then available to be re-issued as future awards. For each share of common stock issued by Medical Properties Trust, Inc. pursuant to its Equity Incentive Plan, the Operating Partnership issues a corresponding number of Operating Partnership units.

For the past three years, we have only granted restricted stock and restricted stock units pursuant to our Equity Incentive Plan. These stock-based awards have been granted in the form of service-based awards, performance awards based on company-specific performance hurdles, and market-based awards. See below for further details on each of these stock-based awards:

In 2023, 2022, and 2021, the Compensation Committee granted service-based awards to employees and non-employee directors. Service-based awards vest as the employee/director provides the required service (typically over three years). Dividends are generally paid on these awards prior to vesting.

In 2023, 2022, and 2021, the Compensation Committee granted performance-based awards to employees. Generally, dividends are not paid on performance awards until the award is earned. See below for details of such performance-based award grants.

In 2023, 2022, and 2021, a target number of stock awards were granted to employees that could be earned based on the achievement of specific performance thresholds as set by our Compensation Committee. The performance thresholds were based on a three-year period with the opportunity to earn a portion of the award earlier. More or less shares than the target number of shares are available to be earned based on our performance compared to the set thresholds. At the end of each of the performance periods, any earned shares during such period will vest on January 1 of the following calendar year. The performance thresholds for 2023 are based

on strategic transactions (including individual property disposals and larger asset disposals through joint venture transactions) and EBITDA, while 2022 and 2021 awards were based on funds from operations growth, EBITDA, and acquisitions.

Certain performance awards granted were subject to a modifier which increases or decreases the actual shares earned in each performance period. The modifier for the 2023, 2022, and 2021 awards was based on two components: 1) how our total shareholder return (“TSR”) compared to the Dow Jones U.S. Real Estate Health Care Index for 2023 and 2022 and the SNL U.S. REIT Healthcare Index for 2021 and 2) how our TSR compared to a threshold set by the Compensation Committee.

In 2023, the Compensation Committee granted market-based awards to employees, other than the Chief Executive Officer and Chief Financial Officer. Generally, dividends are not paid on market-based awards until the award is earned. See details below of such market-based award grant.

On December 8, 2023, the Compensation Committee approved market-based restricted stock awards of 2,500,000 shares of common stock at the target level of achievement. These shares will be earned at the target level only if the Company's share price increases to $7.00 per share, with the opportunity to earn more shares (up to three times target), based on higher stock price hurdles. The actual number of shares to be earned pursuant to these awards will be determined based on a trailing 20-trading day average closing price of the Company's common stock during the four-year period following the grant date of December 8, 2023. Earned shares will vest in equal quarterly installments over two years following the date that the Compensation Committee makes a determination of achievement of the performance metrics, subject to the grantee’s continued employment through such date, provided that all unvested earned shares will vest in full following the end of the four-year performance period.

The following summarizes stock-based award activity in 2023 and 2022 (which includes awards granted in 2023, 2022, and any applicable prior years), respectively:

For the Year Ended December 31, 2023:


	Vesting Based on Service					Vesting Based on Market/Performance Conditions
	Shares			Weighted-Average Value at Award Date		Shares			Weighted-Average Value at Award Date
Nonvested awards at beginning of the year		810,483		$	21.02		4,349,081		$	18.26
Awarded		1,210,448		$	10.36		10,270,260		$	8.47
Vested		(864,482	)	$	16.60		(1,591,846	)	$	19.65
Forfeited		(11,653	)	$	12.27		(450,703	)	$	12.44
Nonvested awards at end of year		1,144,796		$	13.01		12,576,792		$	10.20

For the Year Ended December 31, 2022:


	Vesting Based on Service					Vesting Based on Market/Performance Conditions
	Shares			Weighted-Average Value at Award Date		Shares			Weighted-Average Value at Award Date
Nonvested awards at beginning of the year		922,954		$	20.26		5,477,536		$	15.86
Awarded		659,393		$	21.18		1,828,971		$	18.45
Vested		(750,854	)	$	20.25		(2,924,722	)	$	13.87
Forfeited		(21,010	)	$	20.06		(32,704	)	$	19.17
Nonvested awards at end of year		810,483		$	21.02		4,349,081		$	18.26

The value of stock-based awards is charged to compensation expense over the service periods. For the years ended December 31, 2023, 2022, and 2021, we recorded $33.3 million, $49.4 million, and $52.1 million, respectively, of non-cash compensation expense. The decrease in share-based compensation in 2023 is a result of a $13.2 million cumulative catch-up in 2023 from lowering the payout probability of certain performance awards, partially offset by an incremental $3.5 million of expense from the acceleration of stock awards for a retiring executive officer.

The remaining unrecognized cost from stock-based awards at December 31, 2023, is $52.0 million, which will be recognized over a weighted-average period of 1.9 years. Stock-based awards that vested in 2023, 2022, and 2021, had a value of $22.5 million, $82.6 million, and $49.9 million, respectively.