Tanger Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Equity Based Compensation of the Company

Equity Based Compensation of the Company

6 Months Ended

Jun. 30, 2015

Tanger Factory Outlet Centers, Inc [Member]

Equity Based Compensation of the Company

We have a shareholder approved equity-based compensation plan, the Incentive Award Plan of Tanger Factory Outlet Centers and Tanger Properties Limited Partnership (Amended and Restated as of April 4, 2014) (the "Plan"), which covers our independent directors, officers, employees and consultants. For each common share issued by the Company, the Operating Partnership issues one corresponding unit of partnership interest to the Company's wholly owned subsidiaries. Therefore, when the Company grants an equity based award, the Operating Partnership treats each award as having been granted by the Operating Partnership. In the discussion below, the term "we" refers to the Company and the Operating Partnership together and the term "shares" is meant to also include corresponding units of the Operating Partnership.

During February 2015, the Company issued 357,844 restricted common shares to the Company's independent directors and the Company's senior executive officers. The grant date fair value of the awards ranged from $32.77 to $38.55 per share. The independent directors' restricted common shares vest ratably over a three year period and the senior executive officers' restricted shares vest ratably over a five year period. For the restricted shares issued to our chief executive officer, the restricted share agreement requires him to hold the shares for a minimum of three years following each vesting date. Compensation expense related to the amortization of the deferred compensation is being recognized in accordance with the vesting schedule of the restricted shares.

In February 2015, the Compensation Committee of the Company approved the general terms of the Tanger Factory Outlet Centers, Inc. 2015 Outperformance Plan (the “2015 OPP"). The 2015 OPP is a long-term performance based incentive compensation plan pursuant to which award recipients may earn up to an aggregate of 306,600 restricted common shares based on the Company’s absolute share price appreciation (or total shareholder return) and its share price appreciation relative to its peer group, over a three year measurement period from January 1, 2015 through December 31, 2017.

We recorded share-based compensation expense in general and administrative expenses in our consolidated statements of operations as follows (in thousands):



	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Restricted common shares	$	2,837	$	2,528	$	5,496	$	4,833
Notional unit performance awards	1,001		1,113		1,841		2,059
Options	115		114		229		228
Total share-based compensation	$	3,953	$	3,755	$	7,566	$	7,120

Share-based compensation expense capitalized as a part of rental property and deferred lease costs were as follows (in thousands):



	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Share-based compensation expense capitalized	$	215	$	182	$	403	$	341

We withheld shares with value equivalent to the employees' minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total number of shares withheld was 30,578 for the six months ended June 30, 2015, and was based on the value of the restricted common shares on the vesting date as determined by our closing share price on the day prior to the vesting date. No shares were withheld for the three months ended June 30, 2015 or for the three and six months ended June 30, 2014. Total amounts paid for the employees' tax obligation to taxing authorities was $1.1 million for the six months ended June 30, 2015 and is reflected as a financing activity within the consolidated statements of cash flows.