Tanger Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Equity-Based Compensation (Tables)

Equity-Based Compensation (Tables) - Tanger Factory Outlet Centers, Inc. [Member]

12 Months Ended

Dec. 31, 2019

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, 2019, 2018 and 2017, respectively, as follows (in thousands):



	2019		2018		2017
Restricted common shares	$	12,036	$	9,870	$	9,395
Notional unit performance awards	5,918		4,356		3,913
Options	166		443		277
Total equity-based compensation	$	18,120	$	14,669	$	13,585

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



	2019		2018		2017
Equity-based compensation expense capitalized	$	384	$	1,131	$	1,044

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, 2019, 2018, and 2017:



Unvested Restricted Common Shares and Restricted Share Units	Number of shares and units		Weighted average grant date fair value
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
Granted ⁽²⁾	308,623		21.05
Vested	(469,178	)	27.73
Forfeited	—		—
Outstanding at December 31, 2019	681,525		$	23.92


(1)	Includes 44,452 restricted share units.

(2)

Includes 51,217 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:



	2019 OPP⁽¹⁾					2018 OPP⁽¹⁾					2017 OPP⁽²⁾					2016 OPP^(2),(3)					2015 OPP^(2),(4)
Performance targets
Absolute portion of award:
Percent of total award	33%					33%					50%					50%					60%
Absolute total shareholder return range	19		%	-	30%	19		%	-	30%	18		%	-	35%	18		%	-	35%	25		%	-	35%
Percentage of units to be earned	20		%	-	100%	20		%	-	100%	20		%	-	100%	20		%	-	100%	33		%	-	100%

Relative portion of award:
Percent of total award	67%					67%					50%					50%					40%
Percentile rank of peer group range	30		th	-	80th	30		th	-	80th	40		th	-	70th	40		th	-	70th	50		th	-	70th
Percentage of units to be earned	20		%	-	100%	20		%	-	100%	20		%	-	100%	20		%	-	100%	33		%	-	100%

Maximum number of restricted common shares that may be earned	531,827					409,972					296,400					321,900					306,600
Grant date fair value per share	$	12.09				$	12.42				$	16.60				$	15.10				$	15.85


(1)	The number of restricted common shares received under the 2019 and 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 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 February 15, 2019, the measurement period for the 2016 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 2016 OPP performance awards were automatically forfeited.


(4)	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.

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The fair values of the OPP awards granted during the years ended December 31, 2019, 2018, and 2017 were determined at the grant dates using a Monte Carlo simulation pricing model and the following assumptions:



	2019		2018		2017
Risk free interest rate ⁽¹⁾	2.55	%	2.40	%	1.52	%
Expected dividend yield ⁽²⁾	5.3	%	4.8	%	3.4	%
Expected volatility ⁽³⁾	24	%	27	%	19	%


(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, 2019, 2018, and 2017:



Unvested OPP Awards	Number of units		Weighted average grant date fair value
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
Awarded	531,827		12.09
Earned	—		—
Forfeited	(421,306	)	14.36
Outstanding as of December 31, 2019	1,123,904		$	13.36


(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, 2019 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	298,500	$	21.94	8.21	59,700	$	21.94
$	26.06	61,700	26.06		1.15	61,700	26.06
$	32.02	163,100	32.02		4.01	163,100	32.02
		523,300	$	25.57	6.06	284,500	$	28.61

Schedule of Share-based Compensation, Stock Options, Activity

A summary of option activity under the Plan for the years ended December 31, 2019, 2018, and 2017 (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, 2016	242,200		$	30.46
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	$	—
Granted	—		—
Exercised	—		—
Forfeited	(11,200	)	25.27
Outstanding as of December 31, 2019	523,300		$	25.57	6.06	$	—

Vested and Expected to Vest as of
December 31, 2019	498,008		$	25.75	5.97	$	—

Exercisable as of December 31, 2019	284,500		$	28.61	4.27	$	—