Annual report pursuant to Section 13 and 15(d)

Equity-Based Compensation (Tables)

v3.10.0.1
Equity-Based Compensation (Tables) - Tanger Factory Outlet Centers, Inc. [Member]
12 Months Ended
Dec. 31, 2018
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs
We recorded equity-based compensation expense in general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016, respectively, as follows (in thousands):
 
 
2018
 
2017
 
2016
Restricted common shares
 
$
9,870

 
$
9,395

 
$
10,976

Notional unit performance awards
 
4,356

 
3,913

 
3,967

Options
 
443

 
277

 
376

Total equity-based compensation
 
$
14,669

 
$
13,585

 
$
15,319



Equity-based compensation expense capitalized as a part of rental property and deferred lease costs were as follows (in thousands):
 
 
2018
 
2017
 
2016
Equity-based compensation expense capitalized
 
$
1,131

 
$
1,044

 
$
985

Schedule of Share-based Compensation, Restricted Stock Units Award Activity
The following table summarizes information related to unvested restricted common shares and restricted share units outstanding for the years ended December 31, 2018, 2017, and 2016:
Unvested Restricted Common Shares and Units
 
Number of shares
 
Weighted average grant date fair value
Outstanding at December 31, 2015
 
1,085,995

 
$
31.84

Granted
 
286,524

 
29.64

Vested
 
(388,851
)
 
31.30

Forfeited
 
(104,400
)
 
34.13

Outstanding at December 31, 2016
 
879,268

 
$
31.09

Granted
 
253,431

 
33.07

Vested
 
(368,043
)
 
29.87

Forfeited
 
(14,750
)
 
34.39

Outstanding at December 31, 2017
 
749,906

 
$
32.30

Granted (1)
 
407,156

 
21.13

Vested
 
(314,982
)
 
31.43

Forfeited
 

 

Outstanding at December 31, 2018
 
842,080

 
$
27.56


(1)
Includes 44,452 restricted share units.
Schedule of Nonvested Performance-based Units Activity
The following table sets forth OPP performance targets and other relevant information about each plan:
 
 
2018
OPP(1)
 
2017
OPP(2)
 
2016
OPP(2) 
 
2015
OPP(2),(3) 
 
2014
OPP(2),(4)
Performance targets
 
 
 
 
 
 
 
 
 
 
Absolute portion of award:
 
 
 
 
 
 
 
 
 
 
Percent of total award
 
33%
 
50%
 
50%
 
60%
 
70%
Absolute total shareholder return range
 
19.1% - 29.5%
 
18% - 35%
 
18% - 35%
 
25% - 35%
 
25% - 35%
Percentage of units to be earned
 
20%-100%
 
20%-100%
 
20%-100%
 
33%-100%
 
33%-100%
 
 
 
 
 
 
 
 
 
 
 
Relative portion of award:
 
 
 
 
 
 
 
 
 
 
Percent of total award
 
67%
 
50%
 
50%
 
40%
 
30%
Percentile rank of peer group range
 
30th - 80th
 
40th - 70th
 
40th - 70th
 
50th - 70th
 
50th - 70th
Percentage of units to be earned
 
20%-100%
 
20%-100%
 
20%-100%
 
33%-100%
 
33%-100%
 
 
 
 
 
 
 
 
 
 
 
Maximum number of restricted common shares that may be earned
 
409,972

 
296,400

 
321,900

 
306,600

 
329,700

Grant date fair value per share
 
$
12.42

 
$
16.60

 
$
15.10

 
$
15.85

 
$
14.71

(1)
The number of restricted common shares received under the 2018 OPP will be determined on a pro-rata basis by linear interpolation between total shareholder return thresholds, both for absolute total shareholder return and for relative total shareholder return amongst the Company's peer group. The peer group is based on companies included in the FTSE NAREIT Retail Index.
(2)
The performance shares for the 2017, 2016, 2015 and 2014 OPP will convert on a pro-rata basis by linear interpolation between share price appreciation thresholds, both for absolute total shareholder return and for relative total shareholder return. The share price for the purposes of calculation of share price appreciation will be adjusted on a penny-for-penny basis with respect to any dividend payments made during the measurement period. The peer group is based on companies included in the SNL Equity REIT index.
(3)
On December 31, 2017, the measurement period for the 2015 OPP expired and neither of the Company’s absolute nor relative total shareholder returns were sufficient for employees to earn, and therefore become eligible to vest in, any restricted shares under the plan. Accordingly, all 2015 OPP performance awards were automatically forfeited.
(4)
On December 31, 2016, the measurement period for the 2014 OPP expired. Based on the Company’s absolute total shareholder return over the three-year measurement period, we issued 184,000 restricted common shares in January 2017, with 94,000 vesting immediately and the remaining 90,000 vesting in January one year thereafter, contingent upon continued employment with the Company through the vesting date (unless terminated prior thereto (a) by the Company without cause, (b) by participant for good reason or (c) due to death or disability). Our relative total shareholder return for the 2014 OPP did not meet the minimum share price appreciation and no shares were earned under this component of the 2014 OPP.
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
The fair values of the OPP awards granted during the years ended December 31, 2018, 2017, and 2016 were determined at the grant dates using a Monte Carlo simulation pricing model and the following assumptions:
 
 
2018
 
2017
 
2016
Risk free interest rate (1)
 
2.40
%
 
1.52
%
 
1.05
%
Expected dividend yield (2)
 
4.8
%
 
3.4
%
 
3.1
%
Expected volatility (3)
 
27
%
 
19
%
 
21
%
(1)
Represents the interest rate as of the grant date on U.S. treasury bonds having the same life as the estimated life of the restricted unit grants.
(2)
The dividend yield is calculated utilizing the dividends paid for the previous five-year period.
(3)
Based on a mix of historical and implied volatility for our common shares and the common shares of our peer index companies over the measurement period.

Schedule of Other Share-based Compensation, Activity
The following table sets forth OPP activity for the years ended December 31, 2018, 2017, and 2016:
Unvested OPP Awards 
 
Number of units
 
Weighted average grant date fair value
Outstanding as of December 31, 2015
 
544,300

 
$
15.26

Awarded
 
321,900

 
15.10

Forfeited
 
(107,024
)
 
14.77

Outstanding as of December 31, 2016
 
759,176

 
$
15.36

Awarded
 
296,400

 
16.60

Earned (1)
 
(184,455
)
 
14.71

Forfeited
 
(267,710
)
 
15.84

Outstanding as of December 31, 2017
 
603,411

 
$
15.83

Awarded
 
409,972

 
12.42

Earned
 

 

Forfeited
 

 

Outstanding as of December 31, 2018
 
1,013,383

 
$
14.44

(1)
Represents the units under the 2014 OPP that are no longer outstanding and have been settled in restricted common shares.

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range
Options outstanding at December 31, 2018 had the following weighted average exercise prices and weighted average remaining contractual lives:
 
 
Options Outstanding
 
Options Exercisable
Exercise prices
 
Options
 
Weighted average exercise price
 
Weighted remaining contractual life in years
 
Options
 
Weighted average exercise price
$
21.94

 
306,000

 
$
21.94

 
9.20
 

 
$

$
26.06

 
61,700

 
26.06

 
2.15
 
61,700

 
26.06

$
32.02

 
166,800

 
32.02

 
5.00
 
128,100

 
32.02

 
 
534,500


$
25.56

 
7.08
 
189,800

 
$
30.08



Schedule of Share-based Compensation, Stock Options, Activity
A summary of option activity under the Plan for the years ended December 31, 2018, 2017, and 2016 (aggregate intrinsic value amount in thousands):
Options
 
Shares
 
Weighted-average exercise price
 
Weighted-average remaining contractual life in years
 
Aggregate intrinsic value
Outstanding as of December 31, 2015
 
318,400

 
$
30.32

 
 
 
 
Granted
 

 

 
 
 
 
Exercised
 
(59,700
)
 
29.31

 
 
 
 
Forfeited
 
(16,500
)
 
31.86

 
 
 
 
Outstanding as of December 31, 2016
 
242,200

 
$
30.46

 
6.26
 
$
1,287

Granted
 

 

 
 
 
 
Exercised
 
(1,800
)
 
29.70

 
 
 
 
Forfeited
 
(9,200
)
 
31.83

 
 
 
 
Outstanding as of December 31, 2017
 
231,200

 
$
30.42

 
5.24
 
$
28

Granted
 
331,000

 
21.94

 
 
 
 
Exercised
 

 

 
 
 
 
Forfeited
 
(27,700
)
 
22.62

 
 
 
 
Outstanding as of December 31, 2018
 
534,500

 
$
25.56

 
7.08
 
$

 
 
 
 
 
 
 
 
 
Vested and Expected to Vest as of
 
 
 
 
 
 
 
 
December 31, 2018
 
492,889

 
$
25.87

 
6.90
 
$

 
 
 
 
 
 
 
 
 
Exercisable as of December 31, 2018
 
189,800

 
$
30.08

 
4.08
 
$