Stock Compensation for ROIC

9 Months Ended

Sep. 30, 2022

Share-based Payment Arrangement [Abstract]

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.

On April 25, 2022, the Company adopted the Company’s Second 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 and LTIP Units (defined below), differently than the number of shares of common stock used in the issuance of stock options. A total of 10,954,694 Fungible Units (as defined in the Equity Incentive Plan) are reserved for grant under the Equity Incentive Plan. The 10,954,694 Fungible Units represent a maximum of 5,002,143 shares of the Company’s common stock that could be granted pursuant to the Equity Incentive Plan as full-value awards, such as restricted shares, based on the 2.19 to 1.0 Fungible Unit-to-full-value award conversion ratio. A maximum of 10,954,694 shares of the Company’s common stock may be issued pursuant to the Equity Incentive Plan if all grants made under the Equity Incentive Plan are granted as stock options, based on a 1.0 to 1.0 Fungible Unit-to-stock option award conversion ratio. The Equity Incentive Plan will expire on April 25, 2032.

Restricted Stock

During the nine months ended September 30, 2022, ROIC awarded 574,070 shares of restricted common stock under the Equity Incentive Plan, of which 192,464 shares are performance-based grants and the remainder of the shares are time-based grants. The performance-based grants vest based on both pre-defined operational and market-indexed performance criteria with a vesting date on January 1, 2025.

A summary of the status of ROIC’s non-vested restricted stock awards as of September 30, 2022, and changes during the nine months ended September 30, 2022 are presented below:


	Shares	Weighted Average Grant Date Fair Value
Non-vested as of December 31, 2021	1,153,471	$	16.77
Granted	574,070	$	18.98
Vested	(400,420)	$	16.41
Forfeited	(12,149)	$	17.04
Non-vested as of September 30, 2022	1,314,972	$	17.84

LTIP Units

During the nine months ended September 30, 2022, 201,860 units of limited partnership interests in the Operating Partnership called LTIP Units (“LTIP Units”) vested under the Equity Incentive Plan, issued at a weighted average grant date fair value of $16.35. Vesting of the LTIP Units was based on the Company’s achievement of certain performance criteria during the performance period from January 1, 2019 to December 31, 2021. Vested LTIP Units, after achieving parity with OP Units (as described in the Operating Partnership’s Second Amended and Restated Agreement of Limited Partnership, as amended (the “Partnership Agreement”)), are eligible to be converted into OP Units on a one-for-one basis upon the satisfaction of conditions set forth in the Partnership Agreement. On January 18, 2022, 201,860 LTIP Units were converted by the Company into 201,860 OP Units upon satisfying such conditions. Upon conversion of LTIP Units into OP Units, holders are able to redeem their OP Units for cash or, at ROIC’s option, for shares of ROIC common stock on a one-for-one basis.

Stock Based Compensation Expense

For the three months ended September 30, 2022 and 2021, the amounts charged to expenses for all stock-based compensation arrangements totaled approximately $3.2 million and $2.6 million, respectively. For the nine months ended September 30, 2022 and 2021, the amounts charged to expense for all stock-based compensation arrangements totaled approximately $8.8 million and $7.9 million, respectively.