Stock Compensation and Other Benefit Plans for ROIC

12 Months Ended

Dec. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation and Other Benefit Plans for ROIC

ROIC follows the FASB guidance related to stock compensation which establishes financial accounting and reporting standards for stock-based employee compensation plans, including all arrangements by which employees receive shares of stock or other equity instruments of the employer, or the employer incurs liabilities to employees in amounts based on the price of the employer’s stock. The guidance also defines a fair value-based method of accounting for an employee stock option or similar equity instrument.

In 2009, the Company adopted the 2009 Equity Incentive Plan. The 2009 Equity Incentive Plan provided for grants of restricted common stock and stock option awards up to an aggregate of 7.5% of the issued and outstanding shares of ROIC’s

common stock at the time of the award, subject to a ceiling of 4,000,000 shares. The Company’s Annual Meeting of Stockholders was held on April 25, 2018 at which time the stockholders of the Company approved the Company’s Amended and Restated 2009 Equity Incentive Plan (the “Equity Incentive Plan”). The types of awards that may be granted under the Equity Incentive Plan include stock options, restricted shares, share appreciation rights, phantom shares, dividend equivalent rights and other equity-based awards. The Equity Incentive Plan has a fungible unit system that counts the number of shares of the Company’s common stock used in the issuance of full-value awards, such as restricted shares, differently than the number of shares of common stock used in the issuance of stock options. A total of 22,500,000 Fungible Units (as defined in the Equity Incentive Plan) are reserved for grant under the Equity Incentive Plan and the Fungible Unit-to-full-value award conversion ratio is 6.25 to 1.0. The Equity Incentive Plan will expire on April 25, 2028. Any available shares that had not been granted under the 2009 Equity Incentive Plan were incorporated into and made available for issuance under the Equity Incentive Plan.

The Company has made certain awards in the form of a separate series of units of limited partnership interests in its Operating Partnership called LTIP Units, which can be granted either as free-standing awards or in tandem with other awards under the Equity Incentive Plan. The LTIP Units are subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, achievement of pre-established operational performance goals and market-indexed performance criteria. Upon the occurrence of specified events and subject to the satisfaction of applicable vesting conditions, LTIP Units (after conversion into OP Units, in accordance with the Partnership Agreement) are ultimately redeemable for cash or for unregistered shares of ROIC common stock, at the option of ROIC, on a one-for-one basis.

Restricted Stock

During the year ended December 31, 2019, ROIC awarded 354,161 shares of time-based restricted common stock under the Equity Incentive Plan.

A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2019, and changes during the year ended December 31, 2019 are presented below:


	Shares	Weighted Average Grant Date Fair Value
Non-vested as of December 31, 2018	1,002,835	$	16.88
Granted	354,161	$	17.20
Vested	(364,913)	$	19.06
Forfeited	(37,286)	$	12.97
Non-vested as of December 31, 2019	954,797	$	16.55

As of December 31, 2019, there remained a total of approximately $6.1 million of unrecognized restricted stock compensation related to outstanding non-vested restricted stock grants awarded under the Equity Incentive Plan. Restricted stock compensation is expected to be expensed over a remaining weighted average period of 1.6 years (irrespective of achievement of the performance conditions). The total fair value of restricted stock that vested during the years ended December 31, 2019, 2018 and 2017 was $5.8 million, $5.5 million and $6.3 million, respectively.

LTIP Units

During the year ended December 31, 2019, ROIC awarded 187,279 LTIP Units under the Equity Incentive Plan. The LTIP Units vest based on both pre-defined operational and market-indexed performance criteria with a vesting date on January 1, 2022. The LTIP Units were issued at a weighted average grant date fair value of $16.27.

As of December 31, 2019, there remained a total of approximately $2.4 million of unrecognized compensation expense related to outstanding non-vested LTIPs awarded under the Equity Incentive Plan. LTIP compensation expense is expected to be expensed over a remaining weighted average period of 2.0 years.

Stock Options

During the year ended December 31, 2019, a total of 186,000 options were exercised at a weighted average exercise price of $10.44. The total intrinsic value of stock options exercised during the year ended December 31, 2019 was approximately $1.4 million.

Stock Based Compensation Expense

For the years ended December 31, 2019, 2018 and 2017, the amounts charged to expense for all stock based compensation totaled approximately $8.6 million, $7.4 million and $6.2 million, respectively.

Profit Sharing and Savings Plan

During 2011, the Company established a profit sharing and savings plan (the “401K Plan”), which permits eligible employees to defer a portion of their compensation in accordance with the Code. Under the 401K Plan, the Company made matching contributions on behalf of eligible employees. The Company made contributions to the 401K Plan of approximately $87,000, $86,000 and $70,000 for the years ended December 31, 2019, 2018 and 2017, respectively.