In May 2004, the stockholders of the Company approved the EastGroup Properties, Inc. 2004 Equity Incentive Plan (the “2004 Plan”) that authorized the issuance of up to 1,900,000 shares of common stock to employees in the form of options, stock appreciation rights, restricted stock, deferred stock units, performance shares, bonus stock or stock in lieu of cash compensation. The 2004 Plan was further amended by the Board of Directors in September 2005 and December 2006.

In April 2013, the Board of Directors adopted the EastGroup Properties, Inc. 2013 Equity Incentive Plan (the “2013 Equity Plan”) upon the recommendation of the Compensation Committee; the 2013 Equity Plan was approved by the Company’s stockholders and became effective May 29, 2013. The 2013 Equity Plan was further amended by the Board of Directors in March 2017. The 2013 Equity Plan permits the grant of awards to employees and directors with respect to 2,000,000 shares of common stock.

The Company’s restricted stock program is designed to provide incentives for management to achieve goals established by the Compensation Committee of the Company’s Board of Directors (the “Committee”). The awards act as a retention device, as they vest over time, allowing participants to benefit from dividends on shares as well as potential stock appreciation. Equity awards align management’s interests with the long-term interests of shareholders.

The Committee approves long-term and annual equity compensation awards for the Company’s executive officers. The vesting periods of the Company’s restricted stock plans vary, as determined by the Committee. Restricted stock is granted to executive officers subject to both continued service and the satisfaction of certain annual performance goals and multi-year market conditions as determined by the Committee.

The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming three-year period and the employee’s continued service as of the vesting dates. The total shareholder return component is subject to bright-line tests that compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index.

The following table summarizes the assumptions used in the Monte Carlo simulation pricing model used to determine the grant date fair value of the multi-year market conditions component of the long-term compensation awards for 2021, 2020 and 2019:


	2021 Award			2020 Award		2019 Award

Valuation date	2/25/2021			3/6/2020		3/7/2019
Risk-free interest rate	0.39		%	0.62	%	2.52	%
Expected share price volatility for the Company	30.51		%	16.72	%	18.13	%
Expected share price volatility for peer group companies - low end of range	26.87		%	14.40	%	14.27	%
Expected share price volatility for peer group companies - high end of range	54.25		%	49.23	%	35.76	%
Expected dividend yield	2.27		%	2.28	%	2.72	%
Number of simulation paths	1,000,000			1,000,000		1,000,000
Grant date fair value (in thousands)	$	2,941		2,037		2,413

The risk-free interest rate is based on zero coupon risk-free rates matching the three-year time period of the market performance period. The expected share price volatilities are based on a mix of the historical and implied volatilities of the Company and the peer group companies. The expected dividend yield is based on the expected annual cash dividend as of the valuation date divided by the Company’s stock price on the valuation date. These market based awards are expensed on a straight-line basis over the requisite service period (75% vests at the end of the three-year performance period and 25% vests the following year).

2021 Award

2020 Award

2019 Award

2018 Award

Grant date

2/25/2021

3/6/2020

3/7/2019

6/1/2018

Performance period

1/1/21 - 12/31/23

1/1/20 - 12/31/22

1/1/19 - 12/31/21

1/1/18 - 12/31/20

Range of earnable shares - low end of range

—

Range of earnable shares - high end of range

36,400

25,261

33,442

27,086

Shares determined

N/A (1)

27,086

The long term awards subject only to continuing employment are expensed on a straight-line basis over the requisite service period (25% vests in each of the following four years). The following table presents the service only component of the long-term compensation awards for the four years ended December 31, 2021:

The annual equity compensation awards include components based on certain annual Company performance measures and individual annual performance goals over the upcoming year. The certain Company performance measures for 2021 are: (i) funds from operations “FFO” per share, (ii) cash same property net operating income change, (iii) debt-to-EBITDAre ratio, and (iv) fixed charge coverage. The Company begins recognizing expense for its estimate of the shares that could be earned pursuant to these awards on the grant date; the expense is adjusted to estimated performance levels during the performance period and to actual upon the determination of the awards. The shares are expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period (34% vests at the end of the one-year performance period and 33% vests in each of the following two years).



	2021 Award		2020 Award	2019 Award (1) (2)	2019 Award (2)

Grant date	2/25/2021		3/6/2020	8/28/2019	3/7/2019
Performance period	1/1/21 - 12/31/21		1/1/20 - 12/31/20	1/1/19 - 12/31/19	1/1/19 - 12/31/19
Range of earnable shares - low end of range	—		—	—	—
Range of earnable shares - high end of range	19,052		19,282	15,990	9,594
Shares determined	N/A (3)		18,380	15,990	9,162
Grant date share price	$	138.93	131.36	122.61	105.97

Any shares issued pursuant to the individual annual performance goals are determined by the Committee in its discretion following the performance period. The Company begins recognizing the expense for the shares on the grant date and expenses on a straight-line basis over the remaining service period (34% vests at the end of the one-year performance period and 33% vests in each of the following two years).

2021 Award

2020 Award

2019 Award (1)

Grant date

N/A (2)

2/17/2021

2/13/2020

Performance period

1/1/21 - 12/31/21

1/1/20 - 12/31/20

1/1/19 - 12/31/19

Range of earnable shares - low end of range

—

Range of earnable shares - high end of range

4,756

4,812

6,394

Shares determined

N/A (2)

4,156

5,860

Grant date share price

N/A (2)

142.89

141.63

Equity compensation is also awarded to the Company’s non-executive officers, which are subject to service only conditions and expensed on a straight-line basis over the requisite service period (20% vests in each of the following five years). The total compensation expense is based upon the fair market value of the shares on the grant date. The following table presents the compensation awards to non-executive officers for the three years ended December 31, 2021:

The Committee has adopted an Equity Award Retirement Policy (the “retirement policy”) which allows for accelerated vesting of unvested shares for retirement-eligible employees (defined as employees who meet certain age and years of service requirements). In order to qualify for accelerated vesting upon retirement, the eligible employees must provide required notification under the retirement policy and must retire from the Company. The Company has adjusted its stock-based compensation expense to accelerate the recognition of expense for retirement-eligible employees.

Stock-based compensation cost for employees was $9,136,000, $7,605,000 and $8,647,000 for 2021, 2020 and 2019, respectively, of which $2,336,000, $1,923,000 and $2,536,000 were capitalized as part of the Company’s development costs for the respective years. As of December 31, 2021, there was $4,444,000 of unrecognized compensation cost related to unvested restricted stock compensation for employees and directors that is expected to be recognized over a weighted average period of 2.6 years.

During the restricted period for awards no longer subject to contingencies, dividends are accrued based upon the number of shares expected to be awarded. As of December 31, 2021, 2020 and 2019, accrued dividends on unvested restricted stock were $1,585,000, $1,433,000 and $1,618,000, respectively. Of the shares that vested in 2021, 2020 and 2019, 30,252 shares, 36,445 shares and 28,955 shares, respectively, were withheld by the Company to satisfy the tax obligations for those employees who elected this option as permitted under the applicable equity plan.

Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to employees with the related weighted average grant date fair value share prices for 2021, 2020 and 2019. As of the grant dates, the aggregate fair value of shares that were granted during 2021, 2020 and 2019 was $7,682,000, $7,028,000 and $5,672,000, respectively. As of the vesting dates, the aggregate fair value of shares that vested during 2021, 2020 and 2019 was $10,322,000, $11,754,000 and $6,662,000, respectively.


Restricted Stock Activity:	Years Ended December 31,
	2021			2020			2019
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Unvested at beginning of year	113,125	$	100.86	130,884	$	82.78	143,314	$	70.26
Granted (1) (2)	66,623	115.30		69,446	101.19		59,943	94.62
Forfeited	—	—		(440)	112.14		(3,010)	86.19
Vested	(73,692)	91.59		(86,765)	73.80		(69,363)	66.99
Unvested at end of year	106,056	116.37		113,125	100.86		130,884	82.78

(2) Does not include the restricted shares that may be earned if the performance goals established in 2019 and 2020 for long-term performance and in 2021 for annual and long-term performance are achieved. Depending on the actual level of achievement of the goals at the end of the open performance periods, the number of shares earned could range from zero to 118,911.

The Board of Directors has adopted a policy under the 2013 Equity Plan pursuant to which awards will be made to non-employee Directors. The current policy provides that the Company shall automatically award an annual retainer share award to each non-employee Director who has been elected or reelected as a member of the Board of Directors at the Annual Meeting. The number of shares shall be equal to $100,000 divided by the fair market value of a share on the date of such election. If a non-employee Director is elected or appointed to the Board of Directors other than at an Annual Meeting of the Company, the annual retainer share award shall be pro rated. The policy also provides that each new non-employee Director appointed or elected will receive an automatic award of restricted shares of Common Stock on the effective date of election or appointment equal to $25,000 divided by the fair market value of the Company’s Common Stock on such date. These restricted shares will vest 25% per year over a four-year period upon the performance of future service as a Director, subject to certain exceptions. The shares are expensed on a straight-line basis over the service period.

Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to directors with the related weighted average grant date fair value share prices for 2021, 2020 and 2019. As of the vesting dates, the fair value of shares that vested during 2021, 2020 and 2019 was $21,000, $9,000 and $9,000, respectively.


Restricted Stock Activity:	Years Ended December 31,
	2021			2020			2019
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Unvested at beginning of year	278	$	112.45	140	$	88.86	211	$	88.86
Granted	—	—		208	120.39		—	—
Forfeited	—	—		—	—		—	—
Vested	(122)	102.30		(70)	88.86		(71)	88.86
Unvested at end of year	156	120.39		278	112.45		140	88.86