Quarterly report pursuant to Section 13 or 15(d)

Share-based Compensation of the Company (Notes)

 v2.3.0.11
Share-based Compensation of the Company (Notes) (Tanger Factory Outlet Centers, Inc)
 6 Months Ended
Jun. 30, 2011
Tanger Factory Outlet Centers, Inc
  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Share-Based Compensation of the Company
We have a shareholder approved share-based compensation plan, the Amended and Restated Incentive Award Plan of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership (the "Plan"), which covers our independent directors, officers and our employees. During the first six months of 2011, the Company's Board of Directors approved grants of 324,000 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 $25.245 to $26.85 per share and was determined based upon the closing market price of our common shares on the day prior to the grant date in accordance with the terms of the Plan. 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. Compensation expense related to the amortization of the deferred compensation amount is being recognized in accordance with the vesting schedule of the restricted shares.
In February 2011, the Company's Board of Directors approved the grant of 191,500 stock options to non-executive employees of the Company. The exercise price of the options granted during the first quarter of 2011 is $26.06 which equaled the market price of the Company's common shares as of the close on the day prior to the grant date. The options expire ten years from the date of grant and 20% of the options become exercisable in each of the first five years commencing one year from the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for the 2011 grant: expected dividend yield 3.0%; expected life of 7 years; expected volatility of 32.8%; a risk-free rate of 2.9%; and forfeiture rates of 3.0% to 20.0% dependent upon the employee's position within the Company.
We recorded share-based compensation expense in our statements of operations for the three and six months ended June 30, 2011 and 2010 as follows (in thousands):
 
 
Three Months Ended
 June 30,
 
Six Months Ended
 June 30,
 
 
2011
 
2010
 
2011
 
2010
Restricted shares
 
$
1,266

 
$
1,006

 
$
2,533

 
$
1,965

Notional unit performance awards
 
507

 
450

 
1,013

 
717

Options
 
47

 
—

 
72

 
—

Total share-based compensation
 
$
1,820

 
$
1,456

 
$
3,618

 
$
2,682



Options outstanding at June 30, 2011 had the following weighted average exercise prices and weighted average remaining contractual lives:

 
 
Options Outstanding
 
 
 
Options Exercisable
Range of exercise prices
 
Options
 
Weighted-average exercise price
 
Weighted-average remaining contractual life in years
 
Options
 
Weighted-average exercise price
$9.6900
 
10,000

 
$
9.69

 
2.83

 
10,000

 
$
9.69

$9.7075
 
93,700

 
9.71

 
2.83

 
93,700

 
9.71

$11.8125
 
12,000

 
11.81

 
3.34

 
12,000

 
11.81

$26.0600
 
185,000

 
26.06

 
9.66

 
—

 
—

 
 
300,700

 
$
19.85

 
7.05

 
115,700

 
$
9.92



A summary of option activity under our Amended and Restated Incentive Award Plan as of June 30, 2011 and changes during the year then ended is presented below (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, 2010
 
120,200

 
$
9.92

 
 
 
 
Granted
 
191,500

 
26.06

 
 
 
 
Exercised
 
(4,500
)
 
9.71

 
 
 
 
Forfeited
 
(6,500
)
 
26.06

 
 
 
 
Outstanding as of June 30, 2011
 
300,700

 
$
19.85

 
7.05

 
$
1,945

 
 
 
 
 
 
 
 
 
Vested and Expected to Vest as of
 
 
 
 
 
 
 
 
June 30, 2011
 
259,905

 
$
18.88

 
6.64

 
$
1,934

 
 
 
 
 
 
 
 
 
Exercisable as of June 30, 2011
 
115,700

 
$
9.92

 
2.88

 
$
1,897


The total intrinsic value of options exercised during the three months and six months ended June 30, 2011 was $78,000.

The following table summarizes information related to unvested restricted shares outstanding as of June 30, 2011:
Unvested Restricted Shares
 
Number of shares
 
Weighted-average grant date fair value
Unvested at December 31, 2010
 
717,760

 
$
17.95

Granted
 
324,000

 
25.44

Vested
 
(207,600
)
 
17.87

Forfeited
 
(11,600
)
 
17.78

Unvested at June 30, 2011
 
822,560

 
$
20.92


The total value of restricted shares vested during the six months ended June 30, 2011 was $5.5 million.
As of June 30, 2011, there was $23.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Plan. That cost is expect to be recognized over a weighted-average period of 3.6 years.