Net Lease Office PropertiesNLOP

Net Lease Office Properties Stock Compensation Disclosure

10-KFiled Feb 25, 20262 min read
Stock-Based and Other Compensation
Stock-Based Compensation

At December 31, 2025, we maintained the stock-based compensation plan described below. There were no unvested shares outstanding at December 31, 2025 and 2024. The total compensation expense for awards issued under this plan was $0.3 million for the year ended December 31, 2024.

2023 Incentive Award Plan

The 2023 Incentive Award Plan provides that the maximum aggregate number of our common shares that may be issued under the Incentive Award Plan will be 750,000 common shares. The maximum number of common shares that may be issued in connection with awards of incentive stock options (“ISOs”) under the 2023 Incentive Award Plan is 1,500,000 common shares. The 2023 Incentive Award Plan provides for the grant of various stock- and cash-based awards, including RSUs, stock options (including ISOs and nonqualified stock options), restricted stock, dividend equivalents, stock payments, other incentive awards, long-term incentive plan units, and stock appreciation rights. At December 31, 2025, 720,939 shares remained available for issuance under the 2023 Incentive Award Plan. Through the date of this Report, we have only issued RSUs under the 2023 Incentive Award Plan to members of our Board (we have no employees).

Nonvested RSUs at December 31, 2025 and changes during the period from November 1, 2023 to December 31, 2023 and the year ended December 31, 2024 were as follows (there was no activity during the year ended December 31, 2025):
RSU Awards
SharesWeighted-Average Grant Date Fair Value
Balance at November 1, 2023— $— 
Granted (a)
28,653 10.47 
Nonvested at December 31, 2023
28,653 10.47 
Vested (b)
(28,653)10.47 
Nonvested at December 31, 2024
— $— 
__________
(a)The grant date fair value of RSUs reflect our share price on the date of grant on a one-for-one basis.
(b)The grant date fair value of shares vested during the year ended December 31, 2024 was $0.3 million.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 27, 2025
2023Mar 6, 2024

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

Other Available Disclosures

Income TaxesRevenueFair ValueGoodwill & IntangiblesSegmentsDebtCommitmentsNew Standards